US stocks up as mega-caps lead ahead of inflation data

NEW YORK — US stocks closed higher on Wednesday as megacaps rallied, but gains were limited ahead of inflation reports and major bank earnings later in the week.

Microsoft, Meta Platforms, and Nvidia were the biggest boosts to the S&P 500 index, as the benchmark 10-year Treasury note yield held near 4%and a $37 billion auction of the notes drew above-average demand.

Communication services was the best performing of the 11 major S&P sectors, lifted by a 3.65% rise in Meta Platforms’ stock, which hit its highest intraday level since September 2021, after Mizuho raised its price target to $470 from $400.

Nvidia hit a record high and closed up 2.28% after fellow chipmaker TSMC beat fourth-quarter revenue expectations.

After ending 2023 with a strong rally, stocks have struggled to find upward momentum, with the S&P 500 barely positive on the year, as mixed economic data and comments from US Federal Reserve officials have led investors to dial back expectations for the timing and size of any rate cuts from the central bank this year. But Wednesday’s gains left the index just 0.27% away from its record close of 4,796.56 set on Jan. 3, 2022.

The Dow Jones Industrial Average rose 170.57 points or 0.45% to 37,695.73. The S&P 500 gained 26.95 points or 0.57% at 4,783.45, and the Nasdaq Composite advanced 111.94 points or 0.75% to 14,969.65.

The focus will turn to the December consumer and producer inflation reports, due on Thursday and Friday, respectively, which could help determine the monetary policy path for the central bank.

Federal Reserve Bank of New York President John Williams said on Wednesday it is still too soon to call for rate cuts as the central bank still has some distance to go on getting inflation back to its 2% target.

Market participants have scaled back expectations to a 67.6% chance for at least a 25-basis-point rate cut in March, according to CME’s FedWatch tool.

On Friday, banking giants JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo are expected to report lower fourthquarter profits.

Crypto stocks were mostly lower, with Coinbase, down 0.46% and Riot Platforms off 1.21%, after the US securities regulator said a hacked social media message was posted on its account regarding the eagerly awaited approval of exchange traded funds (ETFs).

The stocks barely reacted to a Chicago Board Options Exchange notice that several spot bitcoin ETFs from multiple asset managers were approved.

Boeing rose 0.92% following a 9.3% tumble in the prior two sessions, after CEO Dave Calhoun acknowledged errors by the US planemaker as more than 170 jets remained grounded for a fourth day.

DocGo plunged 37.58% after Fuzzy Panda Research revealed a short position on the health services company’s stock.

Advancing issues outnumbered decliners by a 1.4-to-1 ratio on the NYSE while advancers equaled decliners on a 1-to-1 ratio on the Nasdaq. The S&P index recorded 31 new 52-week highs and one new low, while the Nasdaq recorded 108 new highs and 97 new lows.

Volume on US exchanges was 9.81 billion shares, compared with the 12.22 billion average for the full session over the last 20 trading days. —