U.S. stocks traded mixed on Wednesday after markets hit their latest record highs, as investors awaited upcoming data for clues about the health of the economy and the chances of another massive rate cut.
The Dow Jones Industrial Average (^DJI) reversed earlier gains and fell about 0.4%, while the S&P 500 (^GSPC) maintained its positive momentum and rose about 0.1% following record closes for both major indexes. The tech-heavy Nasdaq Composite (^IXIC) rose about 0.4% after initially opening in the red.
The question now is whether or not the U.S. economy could find itself in recession, with concerns fueled by a surprisingly weak reading on consumer confidence. The debate centers on whether the Federal Reserve cut rates by a larger than usual 0.5% in response to a slowing economy, and what further unrest means for another expected deep cut.
Read more: What the Fed’s rate cut means for bank accounts, CDs, loans and credit cards
In terms of data, new home sales declined in August after a sharp rise the previous month as ultra-high mortgage rates and high prices kept buyers mostly on the sidelines.
Mortgage applications, however, rose to the highest level since 2022, according to MBA data released before the start of the session. The growth was driven by homeowners looking to refinance loans as rates fall.
But the focus remains firmly on Thursday’s second-quarter GDP data and Friday’s crucial reading of the PCE index, the Fed’s preferred gauge of inflation.
The parade of Fed speakers continues with Governor Adriana Kugler, whose remarks will also be scrutinized for insight into the size and pace of upcoming rate cuts when she appears later Wednesday.
Meanwhile, the boost to markets from China’s massive stimulus effort has faded amid growing skepticism over whether the measures will succeed in turning around its economy.
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