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US stocks rebound as Treasury yields slip; Fed Governor Waller eyed

Published 27/03/2024, 11:12 am
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Investing.com-- U.S. stocks rose Wednesday, rebounding after three straight days of losses as Treasury yields slipped ahead of a speech from Federal Reserve governor Christopher Waller due later in the day and more cues on inflation.

By 14:50 ET (18:50 GMT), the Dow Jones Industrial Average was up 292 points, or 0.7%, S&P 500 gained 0.4%, and NASDAQ Composite climbed 0.1%.

Treasury yields slip ahead Fed's Waller speech, pushing utilities higher

Treasury yields fell ahead of closely anticipated remarks from Fed governor Waller even as some Wall Street warn that the Fed governor may lean hawkish to rein in dovish Fed expectations. 

"While not dismissing the prospect of a June cut, Waller may point to sturdy US aggregate demand and 'sticky' inflation in the January and February data to justify fewer rate cuts than the median 'dots' imply," Macquarie said a note ahead of Waller's speech at 18:00 EST.

The remarks are slated just ahead of Friday's release of PCE price index data, the Fed’s preferred inflation gauge, and speeches from Fed officials, Chair Jerome Powell and rate-setting committee member Mary Daly.

Utilities, which are used as a bond proxy given the sector's steady dividends and tend trend higher when rates are falling, were up more than 3% leading the broader market higher, with Dominion Energy Inc (NYSE:D), Eversource Energy (NYSE:ES) and CenterPoint Energy Inc (NYSE:CNP) in rally mode.

Merck shines, GameStop plummets; Trump Media & Technology continues gains 

In corporate news, pharmaceutical giant Merck (NYSE:MRK) jumped over 5% to an indicated record high after the U.S. Food and Drug Administration approved its treatment for a rare lung disease. 

Trump Media & Technology Group (NASDAQ:DJT) jumped over 13%, a day after its stellar debut on the Nasdaq, while Robinhood Markets (NASDAQ:HOOD) advanced 4%, after the online trading app launched a new credit card, in an effort to expand its foothold in the personal finance market.

On the flip side, GameStop (NYSE:GME) slid 15% after the struggling video game retailer reported a decline in fourth-quarter revenue on the back of a spending slowdown and rising competition from online firms. It also said it had cut an unspecified number of jobs to reduce costs. 

Carnival reports Q1 results beat, Shockwave Medical in deal fever, Kimberly-Clark to strealine operations 

Carnival Corporation (NYSE:CCL) was 0.5% higher after reporting better-than-expected fiscal Q1 results, and lifted its full-year earnings estimate to 98 cents per share from 93 cents per share, previously. But the cruise operator did, however, flag a $10M hit to full-year income following the collapse of the The Francis Scott Key bridge in Baltimore. The company, however,

Shockwave Medical (NASDAQ:SWAV) rose 1.4%, extending gains after a 10% jump on reports that Johnson & Johnson (NYSE:JNJ) was in talks to buy the medical device maker.

Kimberly-Clark (NYSE:KMB) stock was less than 1% higher after the consumer goods maker announced plans to reorganize into three business units as it looks to simplify operations and cut costs. 

Rising energy stocks capped by falling oil prices after sharp rise in US inventories 

Energy stocks were in the green, though gains were limited a fall in oil prices following the release of industry data showing a hefty increase in weekly U.S. crude inventories. 

Data from the Energy Information Administration showed inventories for the week ended Mar. 22 rose by 3.2M barrels, confounding expectations for a draw of 700,000 barrels. 

(Peter Nurse, Ambar Warrick contributed to this article.)

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