Stock market hovers near all-time high on Fed rate cut expectations and retail rally

The U.S. stock market is drifting near its record levels on Wednesday following mixed reactions to profit reports from Macy’s, Marvell Technologies, and other companies.

The S&P 500 rose 0.2% and pulled within 0.7% of its all-time high set in late October. The Dow Jones Industrial Average was up 174 points, or 0.6%, as of 11:50 a.m. Eastern time, and the Nasdaq composite was virtually unchanged.

Marvell rose 4.1% after the supplier of semiconductor products delivered a stronger profit for the latest quarter than analysts expected. CEO Matt Murphy credited strong demand for its data center products, while also announcing a $3.25 billion purchase of Celestial AI to bolster its artificial-intelligence infrastructure business.

American Eagle Outfitters was another winner and rallied 16.1% after the retailer reported a better profit than expected. Its CEO, Jay Schottenstein, said it also saw a strong start to the holiday shopping season with an acceleration in demand across its brands during the Thanksgiving weekend.

Outside of earnings reports, Capricor Therapeutics surged 352% after the biotech company reported encouraging results for its potential therapy for people with Duchenne muscular dystrophy.

On the losing end of Wall Street were relatively few companies, including one out of every three stocks in the S&P 500 index. But among them were some of the market’s most influential stocks, which kept indexes in check.

Microsoft fell 2% and was the heaviest weight on the S&P 500. Nvidia slipped just 0.4%, but because it’s the most valuable stock on Wall Street, it was another one of the heaviest weights dragging on the index.

Macy’s fell 1% despite reporting a profit for the latest quarter that was much better than the loss that analysts were expecting. Its stock may be feeling the pressure of high expectations after it came into the day with a rally of 34.1% for the year so far, more than double the S&P 500’s rise.

CrowdStrike slipped 0.5% despite topping analysts’ expectations for profit. It too came into the day with a big gain for the year so far, raising the stakes, at 51%.

In the bond market, Treasury yields eased after a report suggested U.S. employers outside of the government may have cut more jobs in November than they added.

The data from ADP was much weaker than economists expected, but it has not had a perfect track record predicting what the more comprehensive jobs report from the U.S. government will say each month.

Wednesday’s data may be discouraging for people looking for jobs, but it also keeps alive expectations that the Federal Reserve will cut its main interest rate next week. If the Fed does, that would be the third such cut this year in hopes of bolstering the slowing job market.

A report later in the morning on activity for U.S. services business was more encouraging. It said growth was stronger last month than expected for businesses in the retail, finance, insurance, and other industries.

Perhaps just as important was that the Institute for Supply Management’s survey also said prices were increasing at their slowest rate since April. That could help the Fed because fears of high inflation are the main argument against cutting interest rates.

The yield on the 10-year Treasury fell to 4.07% from 4.09% late Tuesday.

Easing bond yields can boost prices for all kinds of investments, and bitcoin climbed again to top $92,000 following its scary downward run in recent weeks. It briefly plunged below $81,000 last month.

In stock markets abroad, indexes were close to flat in Europe following a mixed finish in Asia.

Japan’s Nikkei 225 jumped 1.1% on gains for technology stocks like Tokyo Electron, which jumped 4.7%. SoftBank Group Corp. leaped 6.4% following reports that its founder, Masayoshi Son, regretted having to sell shares in computer chipmaker Nvidia to help pay for other investments.

Chinese indexes sank following the release of data showing weaker factory activity. Stocks fell 1.3% in Hong Kong and 0.5% in Shanghai.

–Stan Choe, AP business writer

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

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