Key Points
- U.S. stocks edged higher, supported by a strong corporate earnings season.
- McDonald’s and Spotify reported positive results, while Disney and AMD were mixed.
- Growing concerns about a slowing economy are weighing on investor sentiment.
- Weak economic data has increased expectations that the Federal Reserve will cut interest rates.
U.S. stocks saw modest gains on Wednesday as investors weighed a mostly positive corporate earnings season against growing concerns about the health of the economy.
At 10:14 AM (ET), the U.S. stock market experiences modest gains across major indices. The S&P 500 rose by 0.27% to reach 6,316.21, reflecting continued investor confidence. The Nasdaq 100 advanced by 0.39% to 23,107.65, driven by strength in the tech sector. Meanwhile, the Dow Jones Industrial Average posted a slight increase of 0.03% to 44,124.21, as investors weighed mixed economic signals.
The main stock indexes bounced back from a weak showing on Tuesday. The second-quarter earnings season is wrapping up, and it’s been surprisingly strong, with over 80% of companies beating expectations.
McDonald’s, for example, reported better-than-expected sales as diners flocked to its affordable meal deals. Spotify’s stock soared after it predicted strong revenue growth, thanks to its new AI features.
But it wasn’t all good news. Disney’s traditional TV and sports programming revenue fell short of expectations. However, the company did announce a new direct-to-consumer streaming service for ESPN.
Chipmaker AMD saw its stock fall after reporting underwhelming results in its data center business, especially when compared to its rival Nvidia. Snap shares also plummeted after the social media company posted a weak quarter.
Despite the solid earnings, a sense of caution still hangs over the market. Recent economic data has been disappointing, with a key measure of the massive U.S. services sector showing unexpected weakness. This has fueled worries that the economy could be headed for a period of “stagflation”—slow growth combined with high prices.
This economic weakness has, however, raised hopes that the Federal Reserve will step in and cut interest rates in September. Meanwhile, oil prices rebounded after several days of losses, supported by a bigger-than-expected drop in U.S. oil inventories and renewed threats from President Trump against buyers of Russian oil.
