U.S. equity markets closed mixed on Wednesday, with the S&P 500 finishing higher for the session and settling at a six-week high. The S&P 500 rose 0.38% and the Dow Jones Industrial Average gained 0.29%, while the Nasdaq 100 slipped 0.28% as weakness in parts of the chip sector offset strength elsewhere.
Stocks were supported by a batch of U.S. data that suggested cooling inflation pressures, including June producer prices coming in below expectations and the July Empire manufacturing survey posting a stronger-than-expected increase. Investors also digested fresh company-specific catalysts, including a technology-led advance driven by earnings-related sentiment in semiconductors and renewed momentum in mega-cap AI-linked names.
Key takeaways
- Price move: The S&P 500 rose 0.38% to a six-week high, while the Nasdaq 100 fell 0.28%.
- Catalyst: Data on U.S. producer prices and a stronger Empire manufacturing reading supported the growth-and-inflation narrative.
- Stock drivers: Strength in technology helped the broad market even as chipmakers and parts of healthcare weighed on the Nasdaq.
- Rates angle: Treasuries moved higher after the inflation read, reinforcing expectations for a more gradual policy path.
What drove the move
Wednesday’s market pricing leaned on inflation-sensitive signals from the U.S. economy. Data showed June producer prices in the final demand category rose at a slower pace than anticipated, while the Empire State manufacturing survey increased to a level above market expectations.
In addition, New York Fed President John Williams delivered remarks framed as supportive for markets, saying inflation is “unquestionably too high,” but that there are “encouraging reasons” to expect inflation has peaked and should ease over coming quarters. That tone fed into bond-market strength and helped underpin equity demand.
On the corporate front, investors responded to continued AI-related enthusiasm in technology. Apple shares rose more than 4% after a report that China approved the rollout of Apple’s generative artificial intelligence feature. Meanwhile, the market also drew encouragement from strong earnings at ASML, a key supplier of advanced lithography equipment used to manufacture leading-edge semiconductors.
However, the Nasdaq’s decline reflected a separate pocket of weakness. The index faced pressure as chipmakers sold off, and health insurance stocks fell after Elevance Health dropped following updated guidance that missed the second-quarter beat.
Market reaction across sectors and headlines
Technology strength broadened gains in the major indices, with the day’s leadership anchored in large-cap AI-linked names. Beyond Apple, other mega-cap technology stocks such as Alphabet, Amazon, Meta Platforms, and Microsoft closed higher, alongside Nvidia’s modest gain.
At the same time, chip-focused stocks moved lower. The iShares Semiconductor ETF closed down more than 2%, and several semiconductor names and components suppliers—including Western Digital, Micron Technology, and others—declined sharply. That divergence helped explain why the S&P 500 rose while the Nasdaq 100 fell.
Healthcare also contributed to the Nasdaq’s underperformance. Elevance Health shares fell more than 8% after the company’s guidance update came in below what the market had expected. Other managed-care names also ended lower, including Molina Healthcare and Centene.
Not all earnings and deal-related stories aligned with the risk-off tone. PayPal shares surged by more than 17% after Reuters reported that Stripe and Advent International made a joint offer to buy the company. Several other companies moved on company-specific developments, including BlackRock, Cintas, and Pentair, whose full-year adjusted EPS outlook was cut.
Rates, global signals, and macro risks
Treasury markets strengthened in response to the producer-price data and the Fed commentary. According to the report, September 10-year T-notes closed higher and the 10-year yield fell by 4.8 basis points to 4.541%, after bonds recovered from earlier declines tied to strength in crude oil prices.
The weekly Fed Beige Book was described as mixed for stocks, noting that economic activity across the Fed’s regions grew at a slight to moderate pace, while consumer prices continued to rise in several districts.
Overseas, European stocks finished slightly lower and China’s major index also closed down, while Japan’s Nikkei ended higher. China’s economic updates were mixed, with industrial production and retail sales showing strength, while housing indicators remained weak.
Geopolitical risk remained a key external variable. The report said the interim peace deal between the U.S. and Iran effectively collapsed, with both sides exchanging strikes and missile/drone attacks.
Bigger picture: what investors will watch next
With the next meeting of the Federal Open Market Committee approaching, markets are continuing to price near-term policy odds. The report noted that traders were discounting a 10% chance of a 25 basis point rate hike at the July 28–29 FOMC meeting.
Heading into the next session, investors will likely focus on incoming earnings guidance as the earnings season continues to unfold this week, along with additional inflation prints that could influence rate expectations. The report also pointed to a heavy slate of company results starting soon, including major names such as Netflix, Prologis, State Street, and several others.
