Key points
- Favorable antitrust ruling boosts shares of Alphabet and Apple.
- Cooling labor demand fuels rate cut expectations, easing Treasury yields.
- S&P 500 rises 0.3%, Nasdaq climbs 0.9%, Dow falls 0.5%.
- Gold hits record high amid global economic uncertainty.
The S&P 500 experienced a modest increase on Wednesday, driven primarily by a rebound in the technology sector. Alphabet’s stock surged over 8% following a court ruling that prevented a forced spin-off of its Chrome browser, a significant victory against a Justice Department antitrust lawsuit.
While Google will face some restrictions, such as sharing search data with rivals and ending exclusive contracts, the overall outcome removed a considerable regulatory overhang on the company’s stock.
This positive impact extended to Apple, whose shares also rose due to Google’s continued ability to pay Apple for being the default search engine on Safari. Oppenheimer analysts upgraded their Alphabet price target to $270, reflecting the positive impact of the ruling.
The positive momentum in the tech sector contrasted with a decline in the Dow Jones Industrial Average, which fell by 0.5%. However, the broader market sentiment was buoyed by signs of a cooling labor market. Job openings fell significantly, leading investors to anticipate a potential rate cut by the Federal Reserve later this month. This expectation caused Treasury yields to ease their recent upward trajectory.
Investors eagerly await the release of the Fed’s Beige Book, which provides crucial economic insights ahead of the September policy meeting. The cooling labor market provided a counterbalance to the ongoing concerns over the broader economic climate.
The positive market movement was further underscored by the record high reached by gold prices. Concerns about global fiscal health and ongoing U.S. trade tariffs prompted investors to seek safe-haven assets like gold, driving prices to a new all-time high. Spot gold surpassed $3,551.10 per ounce, while futures contracts also showed significant gains.
Meanwhile, the news cycle saw further developments in the media sector, with Newsmax Inc. filing a lawsuit against Fox News, alleging that the latter suppressed the rights of its right-leaning competitors.
The day also featured mixed results in the earnings season, with Dollar Tree Inc. experiencing a significant drop despite exceeding analyst expectations for its Q2 results, and Salesforce preparing to release its latest earnings after the market close amid growing concerns regarding the potential slowdown of the AI boom.
