(Reuters) – On Wednesday, the Dow Jones Industrial Average rallied, recovering some of its recent losses, while the S&P 500 and Nasdaq Composite struggled, pressured by declines in major technology stocks. Despite these setbacks in tech, the broader market found support from strong quarterly wages reports from banks, particularly Morgan Stanley.
Morgan Stanley’s shares surged by 6.7% after the bank stated impressive profits, buoyed by a significant uptick in investment banking revenue. Other financial organizations also performed well; First Horizon saw a 3.3% increase in its stock price, while U.S. Bancorp rose by 5% following their respective third-quarter earnings releases. The Financials sector rose 0.7%, with the broader Banks index climbing 1.1%. Additionally, an index focused on regional banks posted a gain of 1.3%.
Despite these gains, the overall development in the benchmark index was somewhat muted due to a decline in the Communication Services sector, which fell by 0.7%, largely impacted by a 1.5% drop in Meta Platforms. Zachary Hill, head of portfolio administration at Horizon Investments, noted a positive trend in the market, stating, “There has been a broadening out in terms of participation… in the small caps versus the large caps. That’s a positive sign, partly due to decreasing interest rates and some relief for highly leveraged smaller-cap companies.”
Many semiconductor corporations saw an uptick, with heavyweight Nvidia gaining 0.5% after experiencing a nearly 5% slump in the previous session. However, not all chipmakers fared well; U.S.-listed shares of ASML Holding dropped 5.3% after the company lowered its financial estimate for 2025. Intel also faced a setback, with its shares declining by 3.3% after the Cybersecurity Association of China recommended a review of its products sold in the country.
On Tuesday, declines in semiconductor and oil stocks pondered on Wall Street as investors processed a mixed bag of earnings reports. Nonetheless, both the S&P 500 and the Dow were trading near record high levels. Hill remarked, “Generally speaking, bank earnings have been pretty well received by the market, which has helped broad indices… You certainly need sectors outside of tech to perform well for this momentum to continue.”
The coming days expected more corporate earnings announcements and key economic data releases, including retail sales and industrial production figures, scheduled for Thursday. These reports are expected to provide visions into consumer health and the growth outlook for the U.S. economy.
Market sentiment is also bigoted by expectations of a potential interest rate cut by the central bank, with bets on a 25-basis-point reduction in November now exceeding 90%, according to CME’s FedWatch tool.
In notable stock movements, United Airlines shares surged by 8% after the company forecasted a better-than-expected profit for the fourth quarter and proclaimed a $1.5 billion share buyback program. J.B. Hunt also performed well, climbing 6.2% after exceeding third-quarter profit estimates.
On the New York Stock Exchange, advancing issues outstripped decliners by a ratio of 3.37 to 1, while on the Nasdaq, the ratio stood at 2.14 to 1. The S&P 500 recorded 25 new 52-week highs with no new lows, while the Nasdaq Composite saw 55 new highs and 20 new lows, shimmering a mixed but generally optimistic market sentiment.