Stocks rose Wednesday, snapping a three-day decline in the Dow and the S&P 500, as investors awaited more clarity on the Federal Reserve's fight against inflation.
The Dow Jones Industrial Average gained 59.64 points, or 0.18%, to 32,969.23. The S&P 500 climbed 0.29% to 4,140.77, and the Nasdaq Composite advanced 0.41% to 12,431.53.
Energy, real estate and financials were the best-performing sectors in the S&P 500. Meanwhile, information technology, health care and consumer staples lagged.
Cruise lines were among the best-performing stocks in the broader market index. Norwegian Cruise Line Holdings jumped 8.4%, Royal Caribbean Group advanced 7.6%, and Carnival was 5.3% higher.
In contrast, Advance Auto Parts was the worst performer in the S&P 500, down 9.6%, after missing earnings expectations and lowering its full-year guidance.
Investors are awaiting the three-day Jackson Hole economic symposium that starts Thursday with Federal Reserve Chair Jerome Powell slated to speak Friday morning. Fed watchers expect him to reinforce the central bank's goal of squashing inflation and keeping expectations about future price gains in check.
Key economic reports through the remainder of the week include jobless claims on Thursday and the personal consumption expenditures price index on Friday. The Fed keeps a close eye on the PCE report, one of its favorite measures of inflation.
"We're really in a situation where the markets are betwixt and between," said U.S. Bank Wealth Management's Lisa Erickson.
"It's really waiting for some more significant news at the end of the week with the Jackson Hole speech and the PCE, so what we're really seeing is just investors, I think, modestly floating up and down with the downward bias," Erickson added.
Stocks closed higher Wednesday. The Dow Jones Industrial Average gained 59.64 points, or 0.18%, to 32,969.23. The S&P 500 climbed 0.29% to 4,140.77, and the Nasdaq Composite advanced 0.41% to 12,431.53. The Dow and the S&P 500 were higher after three straight sessions of declines.
— Sarah Min
In a week where rebounding oil prices have muddied the narrative about improving inflation, another commodity is now getting a price hike.
Cleveland-Cliffs announced on Wednesday that it is hiking the price on all of its carbon steel products by a minimum of $75 per ton. The company said the move is effective immediately on new orders in North America.
Shares of Cleveland Cliffs moved higher on the news and were up about 1.9% for the day at roughly $18.20 per share.
The stock surged above $33 per share earlier this year when steel prices were strong, but slumped back toward $15 per share as pricing weakened over the summer.
– Jesse Pound
Growth stocks and the Nasdaq 100 have come under pressure this year as the Federal Reserve fights to curb surging inflation. Amid this backdrop, many technology stocks — from semiconductors to big technology giants – have fallen significantly off their highs.
Some investors looking to play the market have begun adopting a so-called growth at a reasonable price strategy (GARP), which employs aspects of both growth and value investing.
CNBC Pro conducted a screen using FactSet data to find some names within the Nasdaq 100 that ascribe to these strategies. CNBC Pro subscribers can check out which stocks made the cut here.
— Samantha Subin
The Federal Reserve's Jackson Hole symposium kicks off on Thursday, and it could create some more volatility for the stock and bond markets.
Investors will be looking for hints about the Fed's next steps in its rate hiking plan. The central bank raised rates by three-quarters-of-a-percentage point in June and July. Its next policy meeting is in September.
Any clues as to the next hike could ripple through the bank stocks, in particular, and that could be an opportunity for options traders to take advantage, according to Goldman Sachs. Read about the potential options strategies on CNBC Pro.
— Jesse Pound
JPMorgan Chief Global Market Strategist Marko Kolanovic said the market rally has been driven by short covering, not multiple expansion.
"I think the rally was driven by short covering," Kolanovic said Wednesday on CNBC's "Halftime Report."
"We have [traders] covering their shorts ... so they missed the July rally, so it was really short covering, no one was really getting bullish or believing in earnings expansion or growth of earnings," he said.
Kolanovic noted that, while some investors were short the market, "people are not long" except for a very small few. He added that, as more investors become long the market, the market will get more of a boost.
— Sarah Min
The Federal Reserve will maintain an aggressive stance against inflation, according to Lisa Erickson, head of the public markets group at U.S. Bank Wealth Management.
"We really are expecting the Fed to remain vigilant in combating inflation," said Erickson. "We do see Jackson Hole as potentially interesting in that it is going to give a sense of how the Fed is digesting more recent data as it looks at how quickly inflation may come down."
"And because the PCE comes out, shortly before that speech, it will just be interesting to see how chair Powell incorporates that information into his outlook," Erickson added.
The head of the public markets group recommended fixed income and global infrastructure, while remaining cautious on equities.
"In a tougher economic environment, they provide some diversified cash flows that help cushion portfolios," Erickson said.
— Sarah Min
Shares of SoFi popped more than 8% after President Joe Biden announced he will forgive $10,000 in federal student loans for most borrowers. The relief will be limited to individuals earning less than $125,000 per year.
SoFi shares were on pace for their best day since Aug. 3, when they surged 28.4%.
—Fred Imbert
Unlike large retailers such as Walmart, which seem to be somewhat optimistic on the consumer, several smaller consumer-facing names appear to be painting a more troubling picture.
Take a look at some of the companies that have cut or posted disappointing forward guidance this week:
—Robert Hum, Fred Imbert
The Global X Uranium ETF is on pace for its best day this year. The ETF's last biggest move was Oct. 12, 2021, when it gained 11.65%.
Shares of the fund have risen more than 1.9% this month and are on track to finish their second straight positive month. The ETF was last up 10.1%.
Companies including Australia's Paladin Energy and Canada-based Laramide Resources and Cameco are among the fund's holdings. All three stocks are trading up at least 10% on the day.
— Samantha Subin, Gina Francolla
Treasury yields are climbing ahead of the Federal Reserve's annual symposium in Jackson Hole, Wyo. on the idea that the market view has been more dovish than the central bank.
The three-day event starts Thursday, and the market is most focused on a Friday morning speech from Fed Chairman Jerome Powell.
The market has been anticipating a hawkish Fed based on comments ahead of the meeting. For instance, some Fed officials have been pushing back on a market view that the Fed could cut interest rates not long after it finishes raising them next year.
Yields, which move opposite price, have been moving higher on expectations that Powell will emphasize an aggressive policy of battling inflation and holding rates at high levels for longer. The 10-year yield reached 3.11% Wednesday morning, the highest since late June.
"I think what the bond market is looking to try to understand is Powell's view of this policy reversal in 2023," said Jim Caron of Morgan Stanley Investment Management.
— Patti Domm
Intuit was the best-performing stock in the S&P 500, up 5.5%, following strong earnings results and upbeat guidance. CEO Sasan Goodarzi said in a statement that the company is "more confident than ever" in its long-term business strategy.
In its fiscal fourth quarter, the business software company behind TurboTax and QuickBooks reported earnings of $1.10 per share on revenue of $2.4 billion. Analysts surveyed by Refinitv were expecting earnings of 98 cents per share on revenue of $2.34 billion in the quarter ending June 30.
Meanwhile, Advanced Auto Parts was the worst-performing stock, down 9.6%, after missing earnings expectations and lowering its full-year guidance.
The auto parts retailer reported earnings of $3.74 per share on revenue of $2.67 billion. Analysts surveyed by Refinitiv were expecting earnings of $3.76 per share on revenue of $2.75 billion.
— Sarah Min
Bank of America keeps tabs on Wall Street's earnings revisions, and the news so far this summer is good.
BofA's "Earnings Revision Ratio" measures the number of stocks where analysts' consensus EPS estimates have risen versus the number of estimates that have fallen.
"Global earnings expectations have been surprisingly resilient despite tighter monetary policy," BofA quant strategists led by Nigel Tupper wrote Tuesday. August saw fewer earnings downgrades than July, and the bank's Global Earnings Revision Ratio climbed to 0.89 from 0.73, "driven by an improvement in all regions and almost all global sectors."
"[T]he direction of earnings seems likely to drive markets in the next six months," Tupper said. While history suggests earnings expectations typically weaken in the wake of central banks' tighter monetary policy, "expectations have been surprisingly resilient in this cycle so far. "
— Scott Schnipper and Michael Bloom
Stocks opened little changed on Wednesday. The Dow Jones Industrial Average dipped 42 points, or 0.12%, shortly after the bell. The S&P 500 fell 0.09% and the Nasdaq Composite ticked higher 0.01%.
— Sarah Min
Peloton Interactive shares jumped 8% in premarket trading after the exercise equipment maker struck a deal to sell its products on Amazon.
Peloton is looking to broaden its customer base as it deals with a loss of investor confidence. Shares of Peloton are down roughly 70% this year, and about 90% off its 52-week high.
— Sarah Min, Lauren Thomas
Here are some of the biggest stocks making headlines in the premarket:
Nordstrom — Shares dropped 13% after the luxury department store chain cut its full year outlook, despite reporting earnings that beat on profit and revenue expectations.
Bed Bath & Beyond — Shares surged 33% following a Wall Street Journal report, citing people familiar with the matter, said that the beleaguered retailer has found a financing source to shore up its liquidity.
Advance Auto Parts — The stock fell 5.9% after Advanced Auto Parts reported disappointing earnings results and lowered its outlook, citing higher inflation and fuel costs.
Brinker International — Brinker International, the parent company behind restaurant franchises Chili's and Maggiano's, dropped 7.3% after reporting an earnings miss and a weaker-than-expected full-year outlook.
Check out more premarket movers here.
— Sarah Min, Peter Schacknow
Raymond James downgraded shares of Medtronic to market perform on Wednesday. The firm cited deteriorating confidence in the medical device maker's growth potential among the reasons for the outlook shift.
The downgrade comes after the company beat analysts' estimates in the recent quarter but showed revenue decline year over year as it grapples with supply chain issues.
CNBC Pro subscribers can check out the full story here.
— Samantha Subin
Mortgage loan demand decreased again last week, but there were some signs that the sharp drop in the housing market is finding a floor.
Government mortgage applications actually rose 4% last week, according to the Mortgage Bankers Association, showing some strength among first time homebuyers even though mortgage rates ticked higher.
On the corporate front, shares of Toll Brothers dipped 2.6% in premarket trading after third-quarter home sales came in below expectations and the homebuilder lowered full-year guidance. But the company's CEO did say that there have been "signs of increased demand" in August.
Pending home sales data is due out at 10 a.m.
— Jesse Pound
The market will likely find some stability after Fed Chairman Jerome Powell delivers his remarks Friday in Jackson Hole, Wyoming, Wells Fargo's Christopher Harvey said in a note Wednesday.
"Fed fears are expected to crest and one (possibly both) of the recent rate drivers eases. Until then, interest rate trends and liquidity suggest a bit more 'chop,'" he said.
The market rallied after hitting a mid-June low, but has recently struggled on renewed fears that the Fed will have to continue raising rates for longer than expected.
"In our view, the Jackson Hole takeaway will be in the eye of the beholder: Hawks will focus on hawkish statements (and vice-versa for doves)," Harvey said.
—Fred Imbert
Morgan Stanley believes now is the time to buy shares of Frontier.
Analyst Ravi Shanker resumed coverage of the budget airline with an overweight rating, calling the company a "quintessential" ultra-low-cost carrier now that its failed merger with Spirit is behind it.
CNBC Pro subscribers can read the full story here.
— Samantha Subin
BTIG chief market technician Jonathan Krinsky said the market "continues to be in a tug of war between economic data and what the Fed might potentially do."
Recent economic data has been weaker than expected "which is causing a bid to bonds and the perception that Powell might be 'less hawkish' at Jackson Hole," Krinsky noted. "That could be enough to keep equities bid ... but it's not necessarily a 'bullish' scenario medium-term if eco data continues to weaken."
—Fred Imbert