Wall Street surges to new heights amid strong earnings and policy analysis

Wall Street surged on Wednesday, led by the S&P 500 reaching a fresh peak. The new reach came through as investors scrutinized robust corporate earnings and analyzed policymakers’ statements for insights into potential interest rate adjustments.

At 11:34 a.m. ET, the Dow Jones Industrial Average surged by 160.16 points (0.42 percent) to 38,681.52, the S&P 500 climbed 31.87 points (0.64 percent) to 4,986.10 and the Nasdaq Composite rose by 106.21 points (0.68 percent) to 15,715.21.

Eight out of eleven S&P 500 sectors advanced, particularly the tech sector, which gained 0.9 percent.

Ford’s stock surged 3.5 percent following the Michigan-based automobile manufacturer’s announcement of a boosted first-quarter dividend. Furthermore, Ford also recently announced a decision to reduce investments in new capacity for unprofitable electric vehicles.

Conversely, Snap’s stock plummeted 35.1 percent to a two-month low after failing to meet quarterly revenue estimates. This drop highlights Snap’s struggle to compete for advertising dollars. The Californian company is particularly facing challenges in attracting advertising spending, resulting in weaker revenue performance.

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New York Community Bancorp’s shares plummeted by 13 percent despite the bank’s commitment to reducing exposure in troubled commercial real estate.

Uber projected quarterly core profit and gross bookings above estimates, although its shares dipped by 1.8 percent due to delayed announcements related to capital allocation plans.

Fortinet surged by 2.4 percent, beating fourth-quarter profit expectations, while U.S.-listed shares of Alibaba Group declined by 6.1 percent following disappointing quarterly revenue.

VF Corp saw a 12.7 percent decrease after falling short of third-quarter expectations and announcing the exit of CFO Matt Puckett. Meanwhile, Enphase Energy soared by 17 percent as the solar inverter maker foresees inventory normalization and increased product demand by the end of the second quarter.

Advancing issues slightly outnumbered decliners with a ratio of 1.05-to-1 on the NYSE and 1.51-to-1 on the Nasdaq. The S&P index observed 67 new 52-week highs and two new lows, while the Nasdaq recorded 79 new highs and 86 new lows.

Earnings optimism and fed watch

On Tuesday, London Stock Exchange Group (LSEG) data revealed that 81.2 percent of S&P 500 companies exceeded profit expectations, with more than half having reported quarterly results.

“The optimism around, for the most part, better earnings results, continues to carry the day and continues to keep the market in a positive bias,” Michael James, managing director of equity trading at Wedbush Securities in Los Angeles, said, as quoted by Reuters.

Meanwhile, Larry Tentarelli, chief technical strategist for Blue Chip Daily Trend Report, identified inflation surprises and a shift in the Fed’s bias from easing to tightening as the primary factors that could trigger a selloff.

"The two biggest things that could cause a selloff are if inflation surprises on the upside, or the Fed says that we have changed from an easing bias to a tightening bias," Tentarelli said, as quoted by The Economic Times.

With Fed Chair Jerome Powell eliminating the possibility of a March interest rate reduction, traders eagerly anticipate further guidance from central bankers regarding the timing of policy easing.

“We just want some more confidence before we take that very important step of beginning to cut interest rates,” Powell said. “We want to see more evidence that inflation is moving sustainably down to two percent.”

Additionally, Minneapolis Fed President Neel Kashkari anticipates two to three rate cuts this year, while Fed Governor Adriana Kugler emphasizes the need for greater assurance before considering rate adjustments.