The S&P 500 was relatively unchanged on Wednesday as oil prices rose and traders awaited the latest monetary policy decision from the Federal Reserve.
The broad market index climbed 0.1%, while the Nasdaq Composite gained 0.5%. The Dow Jones Industrial Average traded up 37 points, or 0.1%.
Oil prices traded slightly higher after President Donald Trump said Wednesday a deal with Iran was not yet final, noting the U.S. will “go right back to dropping bombs” if he doesn’t like the agreement. U.S. West Texas Intermediate futures were up 1% at around $77 per barrel, while international Brent crude futures rose 1% to roughly $80 a barrel.
Energy prices had fallen earlier this week following an announcement from Trump that the U.S. and Iran had reached a potential deal to end the war. Pakistani Prime Minister Shehbaz Sharif said that both sides have terminated their military operations, while an official signing ceremony will take place in Switzerland this Friday.
SpaceX traded higher by more than 4%. The stock has been on fire since the rocket company’s initial public offering last week, which was priced at $135. In that short time, shares are up around 50%, bolting the company’s valuation above that of Amazon’s.
Shares of Intel rose 2% as part of a broader comeback among chip stocks. This comes on the heels of the company starting production of its most-advanced chip node known as 18A-P, a step that moves the company closer to securing a potential agreement to produce chips for Apple devices.
Alongside Intel, ASML advanced 5%, while the Invesco PHLX Semiconductor ETF (SOXQ) was up by more than 2%.
Asia markets closed mostly higher Wednesday, with Japan’s Nikkei 225 scaling a new peak, and rising 0.72%. South Korea’s Kospi advanced 1.58%. Hong Kong Hang Seng Index was down 0.7%, while mainland China’s CSI 300 gained nearly 1%. In Europe, the Stoxx 600 rose 0.3%.
Investors are looking ahead to the Fed delivering its latest policy decision at 2 p.m. It will be the first under new Chairman Kevin Warsh, who will also hold a news conference at 2:30 p.m.
Investors are largely expecting that the Fed will keep interest rates unchanged at a target range of 3.5% to 3.75%. However, most Wall Street Fed watchers anticipate that Warsh won’t submit a “dot” to the FOMC’s quarterly update of where individual officers expect rates to head from here.
“While the drop in oil prices helps to ease inflation, it can also spur more economic activity, which could warrant higher interest rates in the future,” said James Demmert, Main Street Research’s chief investment officer. “We would not be surprised to see Warsh mention accelerating economic growth and the potential for higher rates going forward, even with the political pressure he is facing to cut rates.”
Stocks are coming off a mixed session, with the Dow topping 52,000 for the first time, while the S&P 500 and Nasdaq fell.
S&P 500 opens little changed
The S&P 500 began Wednesday’s session little changed.
The broad-based index climbed 0.1% just after the opening bell, while the Nasdaq Composite gained 0.5%. The Dow Jones Industrial Average traded up 37 points, or 0.1%.
— Sean Conlon
SpaceX rises again after surpassing Amazon in market cap
SpaceX shares rose more than 3% in premarket trading on Wednesday, building on its strong gains since its blockbuster IPO last week.
SpaceX’s jump this week sent its market cap above Amazon on Tuesday, when it also briefly surpassed Microsoft to become the fourth-largest company in the U.S. by valuation at that time.
— Kai Nicol-Schwarz and Sean Conlon
Micron’s rally can continue from here, Deutsche Bank says
Micron Technology has considerable room left to run as the company positions itself to benefit from a memory shortage amid the artificial intelligence boom, according to Deutsche Bank.
The bank has a buy on the semiconductor name. It hiked its price target to $1,500 from $1,000, implying 47% upside from Tuesday’s close.
“We see strong upward bias to our estimates given management’s intra-quarter commentary around its financial outlook strengthening, continuous strength in memory pricing, and the company’s historical tendency to beat Street revenue estimates,” analyst Melissa Weathers said Tuesday in a note to clients.
Shares of Micron have surged 258% in the year to date, fueled by a memory supply crunch worsened by widening AI adoption. It’s a trend that should continue for the next few years, boosting the semiconductor firm’s stock, according to Deutsche Bank.
CNBC Pro subscribers can read more here.
— Liz Napolitano
U.K. government bonds rally on cooler-than-expected inflation print
U.K. government bonds — known as Gilts — rallied on Wednesday after a cooler-than-expected inflation print.
Yields on 10-year Gilts, the main benchmark for British government borrowing, were last seen more than 4 basis points lower at 4.7467% shortly after 1:00 p.m. in London (8:00 a.m. E.T.).
The shorter-dated 2-year Gilt yield also fell more than 4 basis points to 4.1411%. The 30-year Gilt yield was last seen almost 3 basis points lower at 5.4663%.
U.K. inflation remained unchanged at 2.8% in May, official figures showed on Wednesday, coming in lower than the 3% forecast by economists in a Reuters poll.
The numbers come ahead of the Bank of England’s latest monetary policy decision on Thursday, which is expected to see interest rates held at their current level of 3.75%.
— Hugh Leask
Carmax, AST SpaceMobile and La-Z-Boy are among the stocks making moves before the bell
Check out the companies making the biggest moves premarket:
- Carmax — Shares rose more than 3.5% after the company delivered an earnings and revenue beat in its first-quarter financial report. CarMax reported earnings of $1.31 per share, well above analysts polled by LSEG’s expectations for earnings of 95 cents per share.
- AST SpaceMobile — The stock jumped 6% following the company’s announcement that it successfully launched into orbit three new satellites on Wednesday that will continue to build its cellular broadband network in space. SpaceX’s Falcon 9 rocket was used for the launch, and its shares were rising almost 3%.
- La-Z-Boy — The stock surged 16% after it reported retail sales rose 11% in its fiscal fourth quarter compared to the year prior. La-Z-Boy also delivered an earnings beat and revenue about in-line with FactSet consensus estimates.
Read the full list here.
— Davis Giangiulio
Trump says Iran deal ‘not final’, U.S. will ‘go right back to dropping bombs’ if he doesn’t like Iran deal
Trump said Wednesday a deal was not yet final, noting the U.S. will “go right back to dropping bombs” if he doesn’t like the agreement.
“It’s not final, it’s a memorandum of understanding, and if I don’t like it, we’ll go back to shooting at them, dropping bombs on their heads. I don’t like it if they don’t behave. We’ll go right back to dropping bombs right smack in the middle of their head,” Trump said at the G7 conference.
Crude priced bounced to trade slightly higher following that comment. WTI and Brent futures were up 0.4% and 0.3%, respectively.
— Fred Imbert
Chip stocks rise
— Fred Imbert
Japan’s Nikkei 225 closes at record high amid broad gains in Asia markets
Asia markets closed mostly higher Wednesday, with Japan’s Nikkei 225 reaching a record high.
Nikkei 225 closed 0.72% higher to end the trading day at 69,902.25. South Korea’s Kospi advanced 1.58% to 8,864.24.
Hong Kong Hang Seng Index slipped 0.78% as of its last hour of trade, while mainland China’s CSI 300 was up 0.97% to 4,931.39. Australia’s benchmark S&P/ASX 200 gained 0.54% to 8,966.3.
— Justina Lee
European stocks mixed; Autos sink as BMW shares plunge 7% on profit warning
European markets were in mixed territory shortly after the market open on Wednesday, with losses led by the auto sector after a profit warning issued by Germany’s BMW.
The pan-European Stoxx 600 was hovering just after 8:10 a.m. in London (3:10 a.m. E.T.).
Regional sectors and major bourses were mixed. The Italian FTSE MIB advanced 0.2% in early trade, while the U.K.’s FTSE 100 was almost 0.1% higher. In Paris, the CAC 40 was about 0.1% lower. Germany’s DAX dropped 0.38%.
Shares in BMW tumbled 7.5% in early dealmaking after the German auto manufacturer issued a profit warning on the back of a downturn in Chinese demand and the ongoing impact of the Middle East war. European autos and parts stocks fell 2.8%.
— Hugh Leask
HSBC shares gain nearly 2% as lender announces multi-year partnership with Google Cloud
HSBC‘s shares in Hong Kong gained nearly 2% Wednesday after the lender reportedly announced a multi-year partnership with Google Cloud to build its artificial intelligence capabilities.
The British lender announced the appointment of its first chief AI officer earlier this year. “AI is going to play an ever-increasing role in HSBC’s future plans,” said David Rice, HSBC’s chief AI officer in a statement following his appointment.
Financial institutions are ramping up efforts in AI capabilities as they seek to boost efficiency and profits, as AI use becomes more ubiquitous in the banking industry.
The market share that global AI will have in the banking sector is expected to reach $143.56 billion by 2030 from $19.87 billion in 2023, according to a report by Grand View Research.
— Justina Lee
Japan exports in May grow at fastest pace in over three years, exceeding estimates
Japan’s exports in May grew at their fastest pace since November 2022, rising 17% year on year, beating expectations, driven by robust demand for cars and semiconductors.
Growth was higher than the 16.2% expected by economists polled by Reuters, and up from the 14.8% in April.
The country’s exports of semiconductors surged 61.2% in May from a year earlier in terms of value, powered by booming demand for artificial intelligence technology, while shipments of cars jumped 16.4%, according to the official data.
The economic data comes after the Bank of Japan raised its policy rate on Tuesday by 25 basis points to the highest in over 30 years at 1%, as the country sees rising inflation and the yen stays weak.
— Lim Hui Jie and Anniek Bao
South Korea’s Kospi drops 1%, leading losses in Asia markets
Asia-Pacific markets opened broadly lower early Wednesday, with South Korea’s Kospi leading losses.
The Kospi dropped 1.02% at the open, while the small-cap Kosdaq was marginally lower. Japan’s Nikkei 225 slipped 0.20%, while the Topix rose 0.46%.
Australia’s benchmark S&P/ASX 200 was 0.17% lower.
Hong Kong Hang Seng index futures were last at 24,510, higher than the index’s prior close of 24,493.95.
— Justina Lee
Asia-Pacific markets set to open mixed with focus on Fed rate decision
Asia-Pacific markets were set to open mixed on Wednesday amid easing tensions in the Middle East, while traders await the U.S. central bank’s interest rate decision.
Japan’s Nikkei 225 was poised to decline after hitting a record intra-day high Tuesday, with the Chicago futures contract at 69,160 and its Osaka counterpart last traded at 69,110, compared with the index’s previous close of 69,404.50.
Hong Kong Hang Seng index futures were last at 24,510, higher than the index’s last close of 24,493.95.
Futures for Australia’s S&P/ASX 200′s traded at 8,894, while the index closed at 8,917.70.
U.S. President Donald Trump said Tuesday that he will be open to sharing details of a new U.S.-Iran peace deal with Congress, after some key Congress members called for an opportunity to review the deal before it is finalized.
The preliminary deal between the U.S. and Iran will extend the ceasefire between the two for 60 days and create a framework for future negotiations over Iran’s nuclear program and other issues.
— Justina Lee
Seven of the 11 GICS sectors end Tuesday’s session higher
On Tuesday, seven of the 11 GICS sectors ended the session higher.
The financials sector was the day’s outperformer, rising 1.49%. It was followed by utilities and industrials stocks, which respectively climbed 0.69% and 0.67%.
On the other hand, information technology stocks were the session’s laggard, with the sector dropping 2.32%. Energy and consumer discretionary stocks respectively lost 0.25% and 0.11%, while the health care sector ending marginally lower, slipping 0.02%.
— Lisa Kailai Han
This week’s earnings calendar
These are some of the companies reporting earnings for the rest of the week:
— Lisa Kailai Han
Stock futures open little changed
Stock futures opened near flat on Tuesday night.
Shortly after 6 p.m. ET, futures tied to all three major indexes were trading little changed.
— Lisa Kailai Han
