Wall Street’s main indexes were slightly higher in volatile trading on Wednesday as investors searched for clues on the outlook for interest rates, while caution lingered following reports of funding hurdles for Oracle’s data center plans.
Oracle fell 2.8% after a report said the cloud company’s largest data center partner Blue Owl Capital said it will not back a $10 billion deal for its next facility.
Worries about the broader technology sector turning to debt in trying to achieve its artificial intelligence goals have plagued risk-taking multiple times this quarter. AI bellwether Nvidia lost 1.8% on Wednesday.
At 9:34 a.m. ET, the Dow Jones Industrial Average rose 169.09 points, or 0.35%, to 48,283.35, the S&P 500 gained 7.72 points, or 0.11%, to 6,807.98 and the Nasdaq Composite gained 18.17 points, or 0.08%, to 23,129.63.
Eight of the 11 major S&P subsectors were trading higher, with energy up 0.9%, bouncing back after a near 3% drop in the last session. Crude oil prices jumped on Wednesday as Trump ordered a “blockade” of all sanctioned oil tankers entering and leaving Venezuela.
Among Big Tech, Amazon.com gained 0.8% after reports that the company was in talks to invest about $10 billion in ChatGPT maker OpenAI.
In the latest on who could take control of Warner Bros Discovery, the media company’s board rejected Paramount Skydance’s $108.4 billion hostile bid, favoring Netflix’s binding offer.
Netflix’s shares rose 2.4%, while Paramount and Warner Bros were down 4.8% and 1.1%, respectively.
Electronic component maker Jabil climbed 6.2% after forecasting annual revenue and profit above estimates, while Lennar shed 3.6% as the homebuilder missed fourth quarter profit estimates.
WHAT THE FED THINKS
Offering some relief for investors was Federal Reserve Governor Christopher Waller, often viewed as a dove on monetary policy. He said that the central bank still had room to cut interest rates against a softening jobs market.
The S&P 500 hit a three-week low on Tuesday after a key jobs report failed to offer enough clarity on the health of the labor market and analysts pointed to the likelihood of data distortion due to the recent government shutdown.
Mike O’Rourke, chief market strategist at JonesTrading, said “in this environment, the Fed is not in position to ease unless the economy deteriorates. Economic deterioration from nearly stalled levels in the job market would be decidedly negative.”
The next significant report will be Thursday’s consumer inflation data by the Commerce Department.
With two weeks left in the year, Wall Street is set to log its third straight set of annual gains, buoyed by rate cut expectations and enthusiasm over artificial intelligence.
However, concerns over tech valuations have sparked a rotation into small caps and other areas of the market including healthcare and banks.
Advancing issues outnumbered decliners by a 1.33-to-1 ratio on the NYSE and by a 1.69-to-1 ratio on the Nasdaq.
The S&P 500 posted three new 52-week highs and no new lows, while the Nasdaq Composite recorded 23 new highs and 32 new lows.
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