American stock market: The S&P 500 and Nasdaq closed higher on Wednesday after data showing a further slowdown in U.S. service sector growth in March, but advance was limited after Federal Reserve Chairman Jerome Powell , indicated that an interest reduction was still not in sight.
Most major S&P 500 sectors advanced, led by gains in energy (.SPNY), materials (.SPLRCM) and communications services (.SPLRCL). Powell reiterated in a speech Wednesday that the Fed would stick to its wait-and-see approach in determining when to start cutting rates, given the continued strength of the U.S. economy and recent higher-than-expected inflation data.
Earlier on Wednesday, data from the Institute for Supply Management showed that the non-manufacturing PMI declined for the second straight month to 51.4 in March, from 52.6 in February, and weaker than what the analysts expected, according to a Reuters poll.
A number above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy, and the data still indicates that the U.S. economy continues to grow, albeit at a moderate pace.
« This is all because of the Fed and market expectations about delaying a rate cut. I think that’s really what’s weighing on the market here and has been for at least a few days, » said Tim Ghriskey, senior portfolio strategist. at Ingalls & Snyder in New York.
The Dow Jones Industrial Average (.DJI) fell 43.1 points, or 0.11 percent, to 39,127.14, the S&P 500 (.SPX) gained 5.68 points, or 0.11 percent , at 5,211.49 and the Nasdaq Composite (.IXIC) added 37.01 points. , or 0.23 percent, to 16,277.46.
The U.S. central bank was expected to begin cutting rates as early as June, but with recent strong economic data, many market participants are questioning the timeline. In separate comments to CNBC on Wednesday, Atlanta Fed President Raphael Bostic said rates were unlikely to be cut until the fourth quarter of this year.
“There’s this kind of yin and yang data scenario where you have hard data that makes good news seem like bad news,” said James St. Aubin, chief investment officer at Sierra Investment Management in California.
Among the decliners, Ulta Beauty (ULTA.O) fell 15.3 percent after the beauty retailer gave a downbeat forecast at an industry conference. Shares of elf Beauty (ELF.N) and Coty (COTY.N) also fell. Additionally, shares of Intel (INTC.O) fell 8.2% after the chipmaker revealed $7 billion in operating losses for its foundry business in 2023, more than the 5 .2 billion dollars reported the previous year.
Volume on U.S. exchanges totaled 11.03 billion shares, compared to an average of 11.76 billion for the entire session over the past 20 trading days. Advancing issues outnumbered declining ones on the NYSE by a ratio of 1.66 to 1; on the Nasdaq, a ratio of 1.25 to 1 favored progressives. The S&P 500 posted 33 new 52-week highs and 5 new lows; The Nasdaq Composite recorded 90 new highs and 124 new lows.
