In a market that is highly beholden to comments from the Federal Reserve, sometimes all it takes is some positive commentary on that front to boost stocks. That was the case Wednesday as the major U.S. equity benchmarks traded higher following prepared testimony from Federal Reserve Chair Jerome Powell.
Add to that, the Federal Open Market Committee (FOMC) meeting minutes released today indicate “many” Fed members would be open to cutting interest rates if the economy weakens.
That was enough to send the Nasdaq Composite and the S&P 500 higher by 0.75% and 0.45% while the Dow Jones Industrial Average gained 0.29% with about two-thirds of the blue-chip index’s 30 components in the green in late trading.
Yesterday, we struggled to find Dow stocks with gains of at least 1%. Fortunately, that was not the case today. Let’s have a look at some of the big Wednesday winners.
In late trading, two of the top four percentage gainers in the Dow were Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM), the two largest U.S. oil companies. Those oil giants and others rallied after oil hit $60 per barrel.
The Energy Information Administration (EIA) said domestic oil inventories slid by 9.5 million barrels last week, well above the forecast decline of 3.1 million barrels. Chevron and Exxon were also boosted by news that oil operators in the Gulf of Mexico were evacuating platforms there in anticipation of a storm in the region potentially becoming a hurricane.
Shares of Walt Disney Co. (NYSE:DIS) jumped 1.56% as the company ascended to another record high. That is an impressive showing considering Goldman Sachs added Disney rival Comcast (NASDAQ:CMCSA) to its conviction buy list today. There was also some bullish commentary floating around about Netflix (NASDAQ:NFLX), another Disney rival. Disney is up about 33% year-to-date, more than double the Dow’s 2019 gain.
Bank On Banks
Shares of JPMorgan Chase (NYSE:JPM) traded modestly lower today, but the largest U.S. bank was talked up by some traders expecting the stock to start showing some strength in advance of next Tuesday’s second-quarter earnings report. Next week is an epic week in terms of earnings updates from the financial services sector, including some of that group’s Dow components.
Speaking Of Financials…
Indeed an interesting segue into talking about Apple (NASDAQ:AAPL), a technology stock, but the shares rose 0.99% today after Morgan Stanley (NYSE:MS) said Apple Card, the company’s credit card effort, could be a winner on multiple fronts.
Notably, Morgan Stanley sees Apple Card holders spending more in high-margin Apple stores while indicating the new credit card could be a driver of growth for fintech platforms like Apple Pay and Apple Wallet.
Wednesday’s bottom line is pretty clear: the Fed still controls a significant part of the near-term outlook for riskier assets like stocks. On that front, the good news is that some market observers believe the possibility of a rate cut this month has been reborn following Powell’s testimony today.
Remember that Powell’s congressional testimony continues tomorrow, and if he backs away from or affirms today’s dovish statements, stocks will likely react in kind.
Todd Shriber does not own any of the aforementioned securities.