NEW YORK — On Wednesday, Wall Street experienced a modest rise as most stocks posted gains that counteracted declines from major companies like Alphabet following their recent earnings announcements.
The S&P 500 climbed by 0.4% amid mixed trading patterns observed in European and Asian markets. The Dow Jones Industrial Average increased by 317 points, translating to a 0.7% gain, while the Nasdaq composite recorded a gain of 0.2%.
Toy manufacturer Mattel saw a surge of 15.3% after reporting profits that significantly exceeded analysts’ expectations for the latest quarter. The popularity of its Hot Wheels brand helped offset some declining sales for Barbie and several other doll lines. Furthermore, Mattel provided an optimistic profit forecast for the upcoming year, surpassing market expectations.
Amgen also had a strong performance, jumping 6.5%, contributing notably to the S&P 500’s upswing. The pharmaceutical giant reported better-than-anticipated profits for the last quarter, largely due to the success of its Repatha drug, which is designed to lower bad cholesterol and mitigate heart attack risk.
In contrast, Alphabet’s shares dropped by 7.3%, despite the parent company of Google exceeding profit expectations for the quarter. Investors were more concerned with a slowdown in growth within its cloud computing segment, which didn’t meet revenue forecasts. Additionally, Alphabet’s significant budget of $75 billion for investments this year—about $15 billion more than analysts estimated—also drew scrutiny, as the company focuses on advancing artificial intelligence technology.
Advanced Micro Devices experienced a decline of 6.3%. Although the chipmaker slightly surpassed profit predictions for its recent quarter, analysts expressed concerns over the lack of clarity from CEO Lisa Su regarding expectations for the performance of its AI-related products.
Investor sentiment has been cautious, as there is heightened demand for companies to report robust profits compared to previous quarters. This pressure is compounded by rising concerns about stock prices increasing faster than corporate profits, prompting some critics to label these shares as overvalued. Additionally, uncertainties surrounding the global economy persist, particularly in light of tariffs imposed by President Trump.
Market apprehension about a potential global trade dispute eased somewhat after Trump granted 30-day delays in tariffs on Mexico and Canada. This action led to increased optimism among traders that the tariffs may serve primarily as negotiation tools instead of long-term strategies.
Goldman Sachs economist David Mericle indicated that further extensions of tariff negotiations could occur. However, he believes the risks associated with tariffs between the U.S. and these two nations will likely remain until a review of the existing trade agreements concludes, possibly around mid-next year.
Although Trump has moved forward with Chinese tariffs, Mericle anticipates additional tariffs on auto imports from the European Union and other actions that could potentially lead to a temporary inflation spike. This might result in a rise in the widely tracked measure of core inflation trends to 2.6% by December, exceeding the Federal Reserve’s 2% target.
As Wall Street remains wary, one major concern is that elevated inflation could hinder the Fed from implementing interest rate cuts this year, following its decision to lower rates in September to alleviate economic pressures and support the labor market.
Bond market yields fell on Wednesday after a report indicated that growth in U.S. service sectors such as finance and mining was weaker than anticipated in the previous month. The Institute for Supply Management’s survey highlighted that many businesses cited unfavorable weather factors as impacting performance.
Businesses did mention potential concerns regarding U.S. tariff actions, although they did not report significant current impacts, according to Steve Miller, chair of the ISM’s Services Business Survey Committee.
The yield on the 10-year Treasury dropped to 4.42% from 4.52% late on Tuesday.
In corporate news, the Walt Disney Company fluctuated from an initial gain to a decline of 2.4% despite reporting better-than-expected profits for the most recent quarter, driven by the success of its “Moana 2” film.
Overall, the S&P 500 increased by 23.60 points, reaching 6,061.48. The Dow Jones Industrial Average rose by 317.24 points to land at 44,873.28, while the Nasdaq composite climbed by 38.31 points, closing at 19,692.33.
MicroStrategy, a company focused on acquiring Bitcoin, experienced a drop of 2.2% in anticipation of its earnings announcement after the day’s trading ended. It also revealed a name change to “Strategy” as part of its branding overhaul to emphasize its position as a “Bitcoin Treasury Company.”
Internationally, European markets displayed mixed results amid modest fluctuations, with Asia’s markets reflecting varied performance; Hong Kong’s Hang Seng index fell by 0.9%, whereas South Korea’s Kospi index climbed by 1.1%.
The Nikkei 225 in Japan saw a slight increase of 0.1%. Honda Motor Co. experienced a rise after reports indicated that its discussions to create a joint holding company with rival Nissan Motor Corp. were faltering, leading to a 4.9% decline in Nissan’s stock price.
