Stocks ended slightly lower on Wall Street as a gangbuster two-day rally ran out of gas. The S&P 500 fell 7.65 points, or 0.2%, to 3,783.28 Wednesday after briefly heading into the green late in the day. Its early rally this week was the biggest since the spring of 2020, spurred in part by hopes a softening economy may convince central banks to take it easier on interest rate hikes. Analysts have said such hopes may be premature. The Dow Jones Industrial Average fell 42.45 points, or 0.1%, to 30,273.87. The Nasdaq fell 27.77 points, or 0.2%, to 11,148.64. Oil prices rose after the OPEC+ cartel ordered production cuts.
The broader market is still bruised from its stumble in September, but investors have been hoping that signs of a softening economy may convince central banks to temper their aggressive interest rate hikes, the AP reports. Wall Street is also preparing for the next round of corporate earnings reports to get a better sense of how hard the hottest inflation in four decades is squeezing businesses and consumers. Technology and health care stocks helped lift the market. Oracle rose 1.5%, Exxon Mobil gained 4.1% and AbbVie rose 1.3%. Losses in banks, utilities, and other sectors kept the market's gains in check.
Investors are looking for signs that the economy is slowing enough to allow central banks a reason to ease up on rate hikes. Some signs this week included a tamer rate hike by Australia's central bank and a US report showing that the number of available jobs plummeted in August. Stocks are "in the midst of a tug of war between reality and expectations," says Terry Sandven, chief equity strategist at US Bank Wealth Management. The reality is that inflation remains hot while markets expect it has peaked and that the Fed will ease up on rate increases, he says. Trading will likely remain volatile because of that dynamic and other uncertainties hanging over the market.
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