US stocks traded mixed on Wednesday after markets hit all-time highs as investors looked to upcoming data for clues about the health of the economy and the possibility of another jumbo rate cut.
The Dow Jones Industrial Average (^DJI) reversed earlier gains to fall about 0.4% while the S&P 500 (^GSPC) maintained positive momentum, rising about 0.1% at record closes for both major indexes. The tech-heavy Nasdaq Composite (^IXIC) rose about 0.4% after a red start.
The question now is whether or not the US economy can find itself in a recession, with concerns fanned by a very surprising reading in consumer confidence. The debate centered on whether the Federal Reserve lowered rates by a larger-than-usual 0.5% in response to the slowing economy and what further malaise meant for another deep cut.
Read more: What Fed rate cuts mean for bank accounts, CDs, loans, and credit cards
On the data front, new home sales declined in August after rising sharply the previous month as sky-high mortgage rates and high prices kept buyers mostly away.
Mortgage applications, however, jumped to their highest level since 2022, according to MBA data released before the bell. The growth was driven by homeowners looking to reinvest as rates fell.
But the spotlight is on Thursday’s second-quarter GDP print and Friday’s key reading on the PCE index — the Fed’s preferred measure of inflation.
The parade of Fed speakers continues with governor Adriana Kugler, whose comments will also be scrutinized for the size and pace of rate cuts to come when she appears on Wednesday.
Meanwhile, the boost to markets from the launch of China’s massive stimulus is fading amid growing skepticism about whether the move will succeed in turning the economy around.
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