Stock market today: Nasdaq closes above 23,000 for first time as tech rebounds
Investing.com - Canada’s commodity-heavy main stock exchange was higher on Wednesday, as traders monitored a spike in gold prices.
By 4.01 ET, the S&P/TSX 60 index standard futures contract had risen by 2.5 point.
The S&P/TSX composite index gained 150 points or 0.50% at 30,501.99.
finished the prior session in the red, ending what had been a run of seven straight days of gains.
Investors were assessing the state of the equity market prior to the upcoming earnings season and trade talks between Canada and the United States, analysts quoted by Reuters said.
U.S. stocks rise
U.S. stocks were higher on Wednesday, as investors gauged the spike in gold prices and attempted to parse out the path ahead for U.S. interest rates despite a lack of fresh economic data during an ongoing federal government shutdown.
At 4:00 p.m. ET (20:00 GMT), the benchmark S&P 500 rose 0.6% to hit a record close of 6,754.83. The tech-heavy Nasdaq Composite 1.1% to end above 23,000 for the first time ever, while the blue-chip Dow Jones Industrial Average 0.01%.
Equities on Wall Street retreated from record highs on Tuesday, with the benchmark S&P 500 falling by 0.4% and the tech-heavy Nasdaq Composite declining by 0.7%. The blue-chip Dow Jones Industrial Average also dipped by 0.2%.
Partly fueling these drops was a slump in shares of cloud software group Oracle, which had surged just last month on hopes that it would be a major beneficiary of a boom in enthusiasm around artificial intelligence.
Analysts flagged a news report from The Information that suggested the margin profile of Oracle’s AI cloud infrastructure business, which has been pressurized by heavy expenditures on the nascent technology, was worse than previously thought.
Still, the narrative around AI, perhaps the biggest supporter of a recent torrid run higher for stocks, remained intact. Shares in Advanced Micro Devices, which announced a deal with ChatGPT-maker OpenAI earlier this week, extended a rise into a second day, while IBM advanced on a partnership with AI-name Anthropic and AI server firm Dell rallied on a raised long-term guidance.
With the prolonged shutdown leading to the delay of several key economic indicators from the government, traders have had to turn to alternative data sources to check in on the health of the American economy. These measures dented sentiment in the previous session, especially a New York Federal Reserve survey displaying a deterioration in future expectations and rising projections for inflation.
Beyond the U.S., political and economic uncertainty remained. A central bank decision in New Zealand was surprisingly dovish, although another in Thailand was unexpectedly hawkish.
France’s political turmoil also rumbled on, but domestic stocks rose as the odds of a snap election in Europe’s second-largest economy faded. At the same time, industrial production for August in regional powerhouse Germany missed expectations.
Gold rises above $4,000 an ounce
Against such an unclear backdrop, gold prices have soared above $4,000 per ounce for the first time, as market participants like private investors and central banks seek the relative safety of the yellow metal.
Bullion has surged by over 50% so far this year, posting a series of fresh all-time peaks along the way. It is now on track to jump to its best year since 1979.
Analysts have noted that the U.S. government shutdown, combined with a weakening of other perceived havens such as the dollar and U.S. government bonds due to anticipated Federal Reserve interest rate cuts and concerns over America’s fiscal profile, have burnished gold.
The Japanese yen, another traditional haven, took a knock as well following the election of a new dovish leader of the ruling Liberal Democratic Party.
Meanwhile, many exchange-traded funds have been expanding their holdings of gold as anticipation of Fed rate reductions intensifies, analysts at ING said in a note. Some central banks are buying the precious metal as well, with the People’s Bank of China in particular extending its gold buying streak in September for an eleventh straight month despite record high prices.
FOMC minutes in focus
Attention is now set to turn to the publication of minutes on Wednesday from the Fed’s latest policy meeting in September.
At the gathering, Fed members voted to slash rates by a quarter of a percentage point, restarting a cycle of policy easing that had been put on hold since December. Officials broadly predicted that further rate cuts may be coming at the central bank’s final two meetings of the year, one later this month from October 28-29 and another in December.
Underpinning these projections was a perceived desire to prioritize bolstering a recently slowing U.S. labor market over stubborn inflation. In theory, rate reductions can promote hiring and investment, albeit at the risk of driving up prices.
A few Fed officials are scheduled to speak, although the lack of new economic data means that their comments are not likely to fundamentally alter rate path bets, analysts at Vital Knowledge said.
Oil climbs
Oil prices advanced, buoyed by a smaller-than-anticipated output hike from the OPEC+ producer group in November.
Crude was mostly flat on Tuesday, with traders weighing the production increase from the Organization of the Petroleum Exporting Countries and its allies -- known as OPEC+ -- against persistent worries over a supply glut.
Brent crude futures rose by 1.0% to $66.11 per barrel, while U.S. West Texas Intermediate crude moved up by 1.1% to $62.40 a barrel by 06:53 ET.