Stock market today: Stocks mixed as investors keep watchful eye on economy

US stocks traded mixed on Wednesday after markets hit their latest all-time highs, as investors looked to upcoming data for clues to the health of the economy and the chances 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) held onto positive momentum, rising about 0.1% on the heels of record closes for both major indexes. The tech-heavy Nasdaq Composite (^IXIC) rose about 0.4% after initially opening in the red.

The question now becomes whether or not the US economy could find itself in a recession, with concerns fanned by a surprisingly weak reading on consumer confidence. The debate centers on whether the Federal Reserve lowered rates by a bigger-than-usual 0.5% in response to a slowing economy, and what further malaise means for another hoped-for deep cut.

On the data front, new home sales declined in August following a sharp increase the month prior as ultra-high mortgage rates and lofty prices kept buyers mostly on the sidelines.

Mortgage applications, however, jumped to the highest level since 2022, according to MBA data released before the bell. The growth was driven by homeowners seeking to refinance loans as rates drop.

But the spotlight is firmly on Thursday’s second quarter GDP print and Friday’s crucial reading on the PCE index — the inflation gauge favored by the Fed.

The parade of Fed speakers continues with Governor Adriana Kugler, whose comments will likewise be scrutinized for insight into the size and pace of coming rate cuts when she appears later Wednesday.

Meanwhile, the boost to markets from China’s big stimulus launch faded amid growing skepticism about the steps will be successful in turning around its economy.

New home sales fall in August

New home sales declined in August following a sharp increase the month prior as ultra-high mortgage rates and lofty prices kept buyers mostly on the sidelines.

New single-family home sales slid 4.7% month-over-month to an annualized rate of 716,000, according to government data released Wednesday morning. Sales did fall less than expected, however, as economists had been anticipating a decline of 5.3%.

The median sales price decreased 4.6% to $420,600, marking the seventh straight month of year-over-year price declines. Mortgage rates are also declining as rates have fallen for eight consecutive weeks.

Mortgage applications jumped to the highest level since 2022, according to MBA data released before the bell. The growth was driven by homeowners seeking to refinance loans as rates drop.

S&P 500, Dow open higher

The S&P 500 and Dow opened in positive territory on Wednesday after each hit an all-time high the day prior.

The benchmark S&P 500 (^GSPC) rose about 0.1%, while the Dow Jones Industrial Average (^DJI) inched up roughly 0.2%. The tech-heavy Nasdaq Composite (^IXIC) hugged the flat line.

 

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