U.S. stock indexes climbed on Wednesday, led by a rebound in chip-related shares and supported by data pointing to firmer consumer demand. The S&P 500 rose, the Dow Jones Industrial Average hit a new all-time high, and the Nasdaq 100 outperformed, while telecommunication stocks lagged and pared some broad-market gains.
Markets also focused on the conclusion of a two-day Federal Reserve meeting, the first under Chair Kevin Warsh. While policymakers were expected to keep interest rates unchanged, investors appeared to be calibrating their outlook for inflation based on the post-meeting statement and press conference.
Key takeaways
- Stock indexes rose: The S&P 500, Dow, and Nasdaq 100 all ended higher, with the Dow setting a record.
- Shares rallied on chips and consumer data: Strength in semiconductor stocks and a stronger-than-expected retail sales report supported risk appetite.
- Fed meeting was the central catalyst: Attention shifted to how Chair Kevin Warsh frames inflation and policy guidance.
- Rates moved with the narrative: Treasury prices eased after retail sales beat expectations, reflecting a more hawkish read-through.
- Energy outlook remained a swing factor: Developments linked to reopening the Strait of Hormuz helped ease crude prices earlier, supporting risk sentiment.
What drove the move
Chipmakers provided the clearest leadership across major U.S. benchmarks. Applied Materials, ASML Holding, Lam Research, Marvell Technology, and KLA Corp were among the prominent gainers, alongside broad strength across the semiconductor supply chain. Investors appeared to treat the sector bounce as part of carryover support after earlier weakness, rather than as a one-off trade.
Macro data also helped underpin equities. U.S. May retail sales rose 0.9% month over month, beating expectations of 0.6%. Retail sales excluding autos gained 0.8% versus expectations of 0.6%, suggesting demand remained resilient even as markets debate the path of interest rates.
In parallel, the market benefited from easing geopolitical energy risk after the U.S. and Iran agreed to end their war and reopen the Strait of Hormuz, which reduced crude prices to a 3.5-month low at one point. The prospect of renewed vessel traffic through the strait supported a more risk-on tone, although oil prices later recovered as they consolidated.
Market reaction: stocks and bonds
Despite the broad rally, telecommunication stocks acted as a drag. Charter Communications and Verizon were among the decliners, alongside pressure in AT&T and other telecom names, which limited how far the overall market could rise.
In the rate market, Treasury performance reflected the tug-of-war between “higher-for-longer” concerns and the expectation that an easing oil backdrop could temper inflation. September 10-year Treasury notes moved lower on the day, with the 10-year yield rising. The report also pointed to reduced safe-haven demand for Treasuries as equity strength intensified.
Overseas, European government bond yields were generally lower. The German 10-year bund yield fell to a multi-month low area, while UK gilt yields also eased. In the eurozone, a revised upward reading of core CPI kept attention on how persistent inflation pressures may be, complicating the path for rate cuts.
Companies in focus
Individual stock moves reinforced that today’s tape was driven by a mix of sector rotation and company-specific catalysts.
- Chip and equipment names rebounded: Multiple semiconductor-related stocks rose sharply as investors bought into the sector after prior losses.
- Figma gained: The stock rose after Citigroup initiated coverage with a buy recommendation and a set price target.
- Jabil outperformed: The company reported Q3 net revenue above consensus and raised its full-year net revenue forecast, supporting a strong move higher.
- La-Z-Boy jumped on results: The furniture maker’s Q4 adjusted earnings beat expectations, prompting a large gain.
- Biopharma regulatory progress boosted UniQure: UniQure rallied after the FDA allowed 3-year data from a Phase I/II study to be acceptable as the primary basis for an accelerated approval application for Huntington’s disease.
- M&A or executive transitions were not in focus, but leadership change hit CME: CME Group fell after announcing CEO Terry Duffy is stepping down and that CFO Lynne Fitzpatrick will replace him on March 1, 2027.
Several other movers reflected analyst actions. Morgan Stanley upgraded Credicorp to overweight, while other broker changes and coverage initiations drove gains or declines across healthcare, industrials, and technology-adjacent names.
Bigger picture: Fed, oil, and global macro
The Fed meeting remained the central event for markets. Investors were expecting rates to remain unchanged, but the focus was on how Warsh signals the inflation outlook in the press conference and subsequent guidance. Market pricing also suggested participants were assigning a non-trivial probability to additional tightening, though the odds cited in the report pointed to limited consensus for a near-term hike.
Energy price dynamics could further influence both inflation expectations and risk sentiment. With the Strait of Hormuz reopening path improving and crude prices having already declined meaningfully earlier in the week, traders were watching whether oil’s easing trend would persist—an element that could matter for the inflation narrative the Fed uses in determining policy.
Outside the U.S., European data and central bank commentary provided another backdrop. The report cited upward revisions to eurozone core inflation and remarks from an ECB governing council member emphasizing the likelihood of additional rate increases, while eurozone and UK inflation readings continued to shape expectations for European policy.
What to watch next: Markets will likely trade the Fed meeting outcome and the tone of Chair Kevin Warsh’s press conference for clues on inflation persistence. Additional U.S. data releases and any follow-through in oil prices tied to Strait of Hormuz traffic will also remain key for both Treasury yields and equity risk appetite.
