Stock market today: Big Tech surges as S&P 500 crosses 5,600 for first time

US stocks again soared to fresh all-time highs on Wednesday as Jerome Powell's remarks on Capitol Hill buoyed rate-cut hopes and Big Tech stocks piled on the gains.

The S&P 500 (^GSPC) rose 1% for a 37th record close this year, breaching 5,600 for the first time. The Dow Jones Industrial Average (^DJI) jumped 1.1%, while the tech-heavy Nasdaq Composite (^IXIC) gained 1.2%. The S&P and Nasdaq were each higher for the seventh straight session.

Tech's biggest names continued to rise, powering the gains of the broader market. The AI darling Nvidia (NVDA) advanced more than 2%, while Apple, (AAPL), Microsoft (MSFT), and Google (GOOG, GOOGL) each gained more than 1%.

Bets on interest rate cuts have helped keep stocks roaring as signs of slowing in the US economy pile up.

Wall Street also looked to Washington for more optimism. In his semiannual testimony to Congress, Powell hinted the stage is almost set for lowering interest rates from two-decade highs, pointing to a cooling in inflation and in the jobs market. He also cautioned that keeping rates elevated for too long could weaken the economy, giving hope to rate-cut-hungry investors.

But a key test for stocks and rate-easing prospects lies ahead in the crucial consumer inflation report due Thursday. While a cooler reading will cement the likelihood of a Fed policy shift in September, a too-cool print could revive concerns about a recession and the labor market.

LIVE COVERAGE IS OVER10 updates

Big Tech powers S&P above 5600

Wed 10 July 2024 at 4:03 pm GMT-4, Hamza Shaban

Tech's biggest players powered the market to another record finish Wednesday.

The S&P 500 (^GSPC) rose 1% after coming off a 36th record close, and crossed 5,600 for the first time. The Dow Jones Industrial Average (^DJI) jumped 1.1%, while the tech-heavy Nasdaq Composite (^IXIC) gained 1.2%

Fed Chair Jerome Powell's testimony on Capitol Hill also buoyed rate-cut hopes, as the market predicts the easing to begin as early as September.

FTC to reportedly sue drug middlemen over insulin prices

Wed 10 July 2024 at 3:34 pm GMT-4, Hamza Shaban

The three largest pharmacy benefit managers (PBMs) are set to become the target of a Federal Trade Commission lawsuit, Reuters reported Wednesday, as the regulatory watchdog takes aim at tactics for negotiating prices for drugs

The "Big Three" PBMs CVS's (CVS) Caremark, UnitedHealth Group's (UNH) Optum Rx, and Cigna's (CI) Express Scripts serve as middlemen between drug companies and consumers.

The news comes a day after the FTC published an interim report outlining the intricacies of the US healthcare system — and blaming PBMs for higher drug prices.

"Their outsized influence comes not only from the expansion of their traditional, middlemen administrative services in processing patients’ pharmacy prescription claims, but also from decades of consolidation and vertical integration across the healthcare delivery system," said FTC Chair Lina Khan.

Powell reiterates Fed independence as the election collides with policy meeting

Wed 10 July 2024 at 2:45 pm GMT-4, Hamza Shaban

Traders on Wall Street predict the Fed's first rate cut to arrive as soon as September, less than 7 weeks from the US presidential election.

But Fed Chair Powell reiterated Wednesday that the central bank wouldn't make decisions based on political factors, even as September's rate cut decision could influence the the stock market and the broader public's attitudes tied to the economy.

Powell, who appeared before the House Financial Services Committee on Wednesday, following his testimony in the Senate on Tuesday, responded to a Republican lawmaker's question about the potential for the Fed to cut interest rates in September.

He said: "Our undertaking is to make decisions when and as they need to be made, based on the data, the incoming data, the evolving outlook and the balance of risks, and not in consideration of other factors, and that would include political factors."

Powell said the Fed has a history of making those calls, even during election years. "Anything we do will be very well grounded. It's just not appropriate for us to get into the business of thinking about election cycles at all, one way or the other."

Stocks trending in afternoon trading

Wed 10 July 2024 at 2:03 pm GMT-4, Hamza Shaban

Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Wednesday.

Apple (AAPL): Shares of the iPhone maker rose just under 1.5% Wednesday afternoon following a price target increase from Needham analysts, who boosted the level from $220 to $260 and reiterated a Buy rating. The analysts pointed to Apple's $110 billion stock buyback authorization which contrasts with the massive spendig its Big Tech rivals are spending on AI development.

Mastercard (MA): Bank of America analysts downgraded the credit card company Wednesday, sending the stock 3% lower. Analysts knocked down the rating to Neutral and lowered Mastercard's price target from $505 to $480, citing the “limited upside to the valuation multiple and estimates,” as well as regulatory developments that could weigh the company down. The downgrade also applied to Mastercard rival Visa (V).

Carvana (CVNA): Shares of the online used car retailer rose more than 3% after Needham upgraded shares to Buy from Hold with a price target of $160. Analyst Chris Pierce said the company can grow its market share and sales by "leveraging its digital-first customer experience and under-utilized physical footprint."

Intuit (INTU): The parent of the tax preparation software company TurboTax fell by 3% Wednesday afternoon after the company said it will lay off 1,800 employees, or 10% of its workforce, as it pivots to AI-powered tax software. The company plans to shutter two of its sites in Edmonton, Canada and Boise, Idaho.

Republicans test a new economic argument: Immigration can cause inflation

Wed 10 July 2024 at 1:15 pm GMT-4, Hamza Shaban

Republicans are trying out a new argument this week that spans three top issues of the 2024 campaign: immigration, inflation, and the high cost of housing.

It's a case that will likely be received skeptically by many economists, but it's a line of reasoning that was memorialized in the newly unveiled GOP platform ahead of next week's convention in Milwaukee, reports Yahoo Finance's Ben Werschkul.

The emerging case is that an immigration crackdown led by Donald Trump in 2025 may help with the fight against high prices, at least when it comes to finding an affordable home.

As the platform document states, the next president should seal the southern border and deport millions already in the country, in part because illegal immigration has "driven up the cost of housing, education, and healthcare for American families."

It's a message at odds with a chorus of economists, as well as Democrats, who have released studies that say Trump's proposals — from tariffs to tax cuts to that immigration crackdown — could cause inflation to spike anew.

CNN to lay off 100 workers, launch subscription product by year-end

Wed 10 July 2024 at 12:18 pm GMT-4, Alexandra Canal

CNN will eliminate more workers as it reorganizes the business to focus on digital.

In a memo sent to staff on Wednesday, CNN CEO Mark Thompson outlined his vision for the future, announcing the layoffs and revealing plans to launch a CNN.com subscription product before the end of the year.

"Some of our colleagues will learn today that their jobs are being eliminated or are at risk," Thompson wrote.

Around 100 staffers, or about 3% of the company's workforce, will be impacted. CNN last underwent major layoffs in 2022 under then-CEO Chris Licht. At the time, parent company Warner Bros. Discovery (WBD) set a goal to slash $3 billion worth of costs following its 2021 merger.

Wednesday's announcement comes as Thompson stressed the need for more paid offerings and a digital focus that will include "a strategic push into AI."

"We will create best-in-class, subscription-ready products that will provide need-to-know news, analysis, and context in compelling new formats and experiences," Thompson said.

"We want to build on CNN.com’s reach with a new focus on engagement and frequency — how long our users spend with us and how often they return — by improving the quality of the product experience and giving users powerful reasons to come back to us more often."

Shares of Warner Bros. Discovery fell about 2% following the announcement.

CPI preview: Consumer prices expected to have (once again) cooled in June

Wed 10 July 2024 at 11:10 am GMT-4, Alexandra Canal

On Thursday, investors will digest one of the most important data points that will shape future Federal Reserve interest rate policy: June's Consumer Price Index (CPI).

The inflation report, set for release at 8:30 a.m. ET, is expected to show headline inflation of 3.1%, a deceleration from the 3.3% rise seen in May. This would be the smallest annual rise since January as another drop in energy prices likely contributed to further downward pressure on headline CPI.

Over the prior month, consumer prices are expected to have risen 0.1%, a slight uptick from May's flat monthly reading.

Meanwhile, on a "core" basis, which strips out the more volatile costs of food and gas, prices in June are expected to have risen 3.4% over last year and 0.2% over the prior month, unchanged from May, according to Bloomberg data.

"We expect the June CPI report to be another confidence builder following the undeniably good May report," Bank of America economists Stephen Juneau and Michael Gapen wrote in a note last week.

The economists said while the anticipated numbers are "not quite as low as May, it would be a good print for the Fed."

Thursday's inflation data arrives at a critical moment for the central bank after slowing job market growth, coupled with recent testimony from Federal Reserve Chair Jay Powell, have kept rate cut hopes alive.

Powell, who will wrap up his semiannual policy update to Congress on Wednesday, has largely stuck to his data-dependent narrative — a positive sign given recent positive data. On Tuesday, he told the Senate Banking Committee that although there's been evidence of cooler inflation, the Fed still needs more "good data" to be confident that inflation is moving toward its 2% target.

Core inflation has remained stubbornly elevated due to higher costs of shelter and core services like insurance and medical care. In May, non-housing services "surprisingly edged down in May, owing in large part to a slight decline in motor vehicle insurance," Bank of America's Juneau and Gapen noted.

But the economists expect the services category (and motor vehicle insurance) to have increased in June, indicative of the "bumpy" path forward when it comes to price stabilization.

"Non-housing services inflation should moderate over time given cooling services wage inflation; however, a sustained period of deflation is unlikely," they warned.

Read more here.

Powell sticks to script in day 2 of semiannual testimony

Wed 10 July 2024 at 10:26 am GMT-4, Alexandra Canal

Federal Reserve Chair Jerome Powell appeared before the House Financial Services Committee on Wednesday, following his testimony in the Senate on Tuesday.

The central bank leader largely stuck to his script, repeating the remarks he made to the Senate. Powell said he's encouraged by evidence of cooler inflation but that the Fed still needs more "good data" to be confident that inflation is moving toward its 2% target.

He added that in order to cut interest rates, the Fed needs "greater confidence that inflation is moving sustainably towards 2%." Although data from the first half of the year didn't support that, more recent inflation readings have been encouraging.

Rate-cut hopes have remained intact as a result, with traders still placing bets that the Fed will lower interest rates twice this year. "We’re increasingly confident in our forecast that the Fed will cut rates in September," Oxford Economics chief US economist Ryan Sweet wrote on Tuesday.

Federal Reserve Board Chair Jerome Powell. (AP Photo/Susan Walsh) (ASSOCIATED PRESS)

Stocks hold near records

Wed 10 July 2024 at 9:33 am GMT-4, Alexandra Canal

US stocks held near all-time highs on Wednesday after Federal Reserve Chair Jerome Powell kept rate-cut hopes alive following the start of his semiannual testimony to Congress.

The S&P 500 (^GSPC) edged up roughly 0.2%, coming off a 36th-record close for the benchmark. The Dow Jones Industrial Average (^DJI) hugged the flatline, while the tech-heavy Nasdaq Composite (^IXIC) rose about 0.4%.

Powell will appear before the House later this morning, with investors eyeing further updates on the Fed's policy stance. A key inflation report, due Thursday, will also be top of mind.

Chipotle CFO retirement

Wed 10 July 2024 at 5:18 am GMT-4, Brian Sozzi

I have been at this a while, and with that, I've really gotten to know some of these executives leading giant companies. Given my background (analyst first, then journalist), I have long gravitated toward chats with CFOs — who I think, in many cases, are the CEOs behind the scenes.

Two of my favorite CFOs are Disney's (DIS) Hugh Johnston and Chipotle's (CMG) Jack Hartung. They are my favorites because they are not just good people but also incredibly impressive operators and strategic thinkers.

Hugh surprised the heck out of me by leaving PepsiCo (PEP) after being there forever and joining Disney as its CFO late in 2023. I think he is really enjoying the new challenge of shaping this iconic media company. Once Iger announces his successor, I think Hugh will help onboard them and head off into a well-deserved retirement and board life.

Similarly, Jack Hartung surprised me by announcing last night that he is retiring from Chipotle.

Hartung has been there almost since Steve Ells founded the burrito chain, taking it from 200 locations to more than 3,500. He is sitting on a ton of money because of his work growing the company. But despite his success, he really hasn't changed a bit — he still has his head down being a CFO and a normal human.

As with Hugh, I would not be surprised if Hartung has one more public company gig in him. It would be good if it were a CEO gig — he has earned that shot.