Wall Street continued its record-breaking rally on Wednesday as weak reports on the U.S. economy raised the possibility of cuts to fedrates. The S&P 500 reached an all-time high for the second consecutive day, marking the 33rd time this year. The Dow Jones Industrial Average saw a slight decline, while the Nasdaq composite set another record. Tesla and Nvidia were key drivers in boosting the market, with Tesla reporting better-than-expected sales for the spring. The bond market also saw activity, with Treasury yields falling following reports of weaker-than-expected data on the job market and U.S. services companies. This data could potentially lead to interest rate cuts later in the year.
Reports indicated a contraction in business activity in various U.S. services industries, along with a slowdown in the job market. The hope on Wall Street is that the economy will soften just enough to prevent inflation from rising too high, without causing job losses and a recession. The bond market saw a notable drop in the 10-year Treasury yield, as investors anticipate a potential interest rate cut by the Federal Reserve in September.
Traders are now betting on a high likelihood of a rate cut, leading to fluctuations in the market. Despite some mixed reports, Wall Street remains positive with investors driving the market higher. Stock markets abroad also saw gains, with indexes rising in Europe and Asia. Overall, the market remains optimistic despite some challenges in the economy.