After turning in a strong performance throughout much of the trading session, stocks saw substantial volatility in late-day trading on Wednesday. The major averages showed wild swings back and forth across the unchanged line before closing mixed.

While the tech-heavy Nasdaq climbed 130.98 points or 0.6 percent to a new record closing high of 23,958.47, the S&P 500 (SPI:SP500) edged down 0.30 points or less than a tenth of a percent to 6,890.59 and the Dow fell 74.37 points or 0.2 percent to 47,632.00.

The late-day volatility on Wall Street came in reaction to Federal Reserve Chair Jerome Powell’s comments following the central bank’s monetary policy announcement.

While the Fed lowered interest rates by another quarter point as widely expected, Powell’s post-meeting remarks partly offset optimism about another rate cut in December.

Powell said a further reduction in rates in December is “not a foregone conclusion,” noting Fed officials had “strongly differing views about how to proceed” at the final meeting of the year.

Highlighting the high level of uncertainty due to government shutdown delaying key data, Powell also said there’s a “growing chorus” that feels the Fed should “wait a cycle” to continue cutting rates.

Following Powell’s comments, CME Group’s FedWatch Tool indicates the chances the Fed leaves rates unchanged in December have jumped to 34.1 percent from just 9.1 percent yesterday.

The Fed chief’s remarks came after the central bank said it decided to lower the target range for the federal funds rate by 25 basis points to 3.75 percent to 4.0 percent.

The central bank once again cited a shift in the balance of risks, noting the downside risks to employment have risen in recent months.

The advance by the Nasdaq came as traders looked ahead to earnings news from tech giants Google parent Alphabet (NASDAQ:GOOGL), Facebook parent Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) after the close of today’s trading.

Sector News

Despite the late-day volatility shown by the broader markets, computer hardware stocks continued to see substantial strength, driving the NYSE Arca Computer Hardware Index up by 6.3 percent to a record closing high.

Seagate Technology (STX) led the sector higher, skyrocketing by 19.1 percent after the data storage company reported better than expected fiscal first quarter results.

Oil service stocks also continued to turn in a strong performance amid a rebound by the price of crude oil, with the Philadelphia Oil Service Index jumping by 2.6 percent.

Semiconductor stocks also saw significant strength, while interest rate-sensitive commercial real estate and housing stocks came under pressure, dragging the Dow Jones U.S. Real Estate Index and the Philadelphia Housing Sector Index down by 2.6 percent and 2.3 percent, respectively.

Airline stocks also showed a notable moved to the downside on the day, resulting in a 1.4 percent loss by the NYSE Arca Airline Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index surged by 2.2 percent and South Korea’s Kospi shot up by 1.8 percent, with both indexes reaching new record closing highs.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index climbed by 0.6 percent, the French CAC 40 Index dipped by 0.2 percent and the German DAX Index slid by 0.6 percent.

In the bond market, treasuries came under pressure in late-day trading in reaction to Powell’s comments. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 7.5 basis points to 4.058 percent.

Looking Ahead

With the ongoing government shutdown leading to another quiet day on the U.S. economic front, trading on Thursday is likely to driven by reaction to the earnings news from the big-name tech companies.

SOURCE: RTTNEWS

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