The US stock market experienced a positive day on Wednesday, driven by a renewed sense of optimism surrounding the potential for a rate cut at the upcoming Federal Reserve meeting. The Federal Open Market Committee (FOMC) minutes, released on Wednesday, reinforced investors’ expectations for a rate reduction in September, as policymakers acknowledged ongoing progress in curbing inflation. This positive outlook led to a rise in stock prices.
However, the CNN Money Fear and Greed index, a gauge of overall market sentiment, remained in the “Neutral” zone, even though it showed a slight improvement from the previous day. This index measures investor emotions, with higher fear leading to downward pressure on stock prices and higher greed having the opposite effect.
While the overall market trend was positive, some sectors bucked the trend. Financials and energy stocks closed lower, while consumer discretionary, materials, and utilities stocks recorded the biggest gains.
On the economic data front, the week ending August 16 saw a 10.1% decline in mortgage applications. This suggests a cooling housing market. Furthermore, Macy’s, Inc. experienced a significant 13% drop in share prices after reporting disappointing quarterly sales. Conversely, Target Corporation reported better-than-expected second-quarter financial results and raised its full-year earnings outlook.
The major indices closed higher, with the Dow Jones gaining around 55 points to 40,890.49, the S&P 500 rising 0.42% to 5,620.85, and the Nasdaq Composite increasing 0.57% to 17,918.99. Investors are eagerly awaiting earnings results from several companies, including BJ’s Wholesale Club Holdings, Inc., Williams-Sonoma, Inc., and Intuit Inc., later today.
The Fear and Greed Index currently stands at 50.5, indicating a balanced sentiment in the market. The index, which ranges from 0 to 100, is calculated using seven equally weighted indicators. A score of 0 represents extreme fear, while a score of 100 signifies maximum greed.
Overall, the US stock market closed higher on Wednesday, driven by positive sentiment surrounding potential rate cuts. However, the market sentiment remains neutral, with investors closely monitoring economic data and upcoming earnings reports.
