![Traders work on the floor at the New York Stock Exchange on Sept. 4, 2024.](https://media.nbcnewyork.com/2024/09/108029168-17254701042024-09-04t160903z_238381830_rc2qt9axjsec_rtrmadp_0_usa-stocks_10bb94.jpeg?quality=85&strip=all&resize=320%2C180)
The S&P 500 ended Tuesday near the flatline after hitting a record high as the market awaited the Federal Reserve's key interest rate cut decision.
The broad market index closed higher by 0.03% at 5,634.58, after earlier touching an all-time high of 5,670.81. The Dow Jones Industrial Average inched down 15.9 points, or 0.04%, to close at 41,606.18. The 30-stock index also hit a fresh record during the session. The Nasdaq Composite advanced 0.2% and ended at 17,628.06.
The fresh records for the S&P 500 and the Dow come during a historically tough period for the market. September has been the worst month for the benchmark over the past 10 years, averaging a 1.3% monthly loss, according to FactSet data.
Traders also overcame late-summer headwinds stemming from concerns over the health of the U.S. economy. Disappointing jobs and manufacturing data in August sparked a large one-day sell-off. However, equities were able to rebound due to more constructive data releases and expectations of the Fed lowering rates.
Wall Street is on standby for the Fed's long-anticipated rate cut Wednesday afternoon, a move that could help boost earnings growth for companies following a backdrop of steep borrowing costs and high inflation. The Fed first embarked on its aggressive hiking campaign in March 2022.
The latest retail sales data indicated solid consumer health. Retail sales rose 0.1% in August versus economists' estimates for a 0.2% decline, according to Dow Jones. Excluding autos, the number also came in at a 0.1% increase, which slightly missed the 0.2% consensus forecast.
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While investors expect a cut Wednesday, the market is divided on the size of the potential reduction. Traders are currently pricing in a 63% chance that the central bank eases rates by 50 basis points, according to CME Group's FedWatch Tool. That is up from a roughly 47% chance Friday, but slightly lower than the 67% earlier forecast on Tuesday. One basis point equals 0.01%.
Money Report
A steeper rate cut may spark concerns about the health of the economy, according to some investors.
"A 50 basis point cut may further imply a downgrade of the Fed's view on the labor market — that would be more of a concerning sign," said Adam Turnquist, chief technical strategist at LPL Financial. "I think there's going to be a pretty big deviation between what the market is expecting, and what the Fed is going to project."
Intel shares jumped 2.7% {
Intel pops 8% after company shares plans to create separate foundry business
![U.S. President Joe Biden tours the Intel Ocotillo Campus, in Chandler, Arizona, on March 20, 2024.](https://image.cnbcfm.com/api/v1/image/107390283-17109600802024-03-20t184017z_1530117755_rc2up6ajz288_rtrmadp_0_usa-election-biden.jpeg?w=1920&h=1080)
Intel shares rallied more than 8% in overnight trading after the chipmaker said it will turn its foundry business into a separate entity as the company looks to turn around its business.
CEO Pat Gelsinger said the move would enable Intel's foundry business to "evaluate independent sources of funding." The company is also considering spinning off the business, CNBC reported, citing a person familiar with the matter.
The Biden Administration also awarded Intel up to $3 billion in funding through the CHIPS Act on Monday.
Shares have plummeted more than 58% since the start of 2024.
— Samantha Subin, Rohan Goswami, Kif Leswing
make its foundry business a subsidiary awarded the companyS&P 500 closes little changed Tuesday
The S&P 500 ended near the flatline on Tuesday.
The broad market index ticked up 0.03% to finish at 5,634.58. The Nasdaq Composite added 0.2% to close at 17,628.06. The Dow Jones Industrial Average slipped 15.9 points, or 0.04%, to end at 41,606.18.
— Hakyung Kim
Hawaiian shares rise after DOT clears merger with Alaska Airlines
Shares of Hawaiian Holdings rose about 4% in afternoon trading, hitting a new 52-week high, after the U.S. Department of Transportation said it can close its $1.9 billion merger with Alaska Airlines. The stock is up more than 26% year to date.
Meanwhile, Alaska's shares have moved around 1% lower in the session. Shares are still in the green year to date, however, rising nearly 5%.
— Sean Conlon
It's 'unlikely' the Fed will surprise investors by cutting just 25 basis points, strategist says
Interest rate futures now show a 63% probability of a 50 basis point rate cut at Wednesday's meeting, and just a 37% chance that the U.S. central bank could cut rates by 25 basis points.
According to Sonu Varghese, global macro strategist at Carson Group, the Federal Reserve will more than likely exercise a 50 basis point rate cut on Wednesday.
"Markets currently expect a 50 bps cut by the Fed at their September meeting, and it's very unlikely the Fed will surprise investors by going 25 bps," he wrote. "We expect the Fed to cut 50 bps to get ahead of downward trending labor market data, even as the inflation fight looks done."
— Lisa Kailai Han
Energy leads S&P 500 gains
The energy sector outperformed the S&P 500 on Tuesday afternoon. Energy advanced 1.3%, with gains led by Halliburton and Devon Energy up 3.2% and 2.1%, respectively.
Meanwhile, health care was the biggest laggard, losing 1.1%. Edwards Lifesciences, Cigna Group and Molina Healthcare led the sector to the downside with losses of around 3% each.
— Hakyung Kim
Homebuilder stocks typically outperform before the central bank cuts interest rates, says Bank of America
![Construction of a KB Home single-family housing development is shown in Menifee, California, on Sept. 4, 2024.](https://image.cnbcfm.com/api/v1/image/108029615-17255396102024-09-04t233804z_605513800_rc2vt9a21usv_rtrmadp_0_usa-economy.jpeg?w=1920&h=1080)
A strong run for homebuilder stocks in 2024 is in line with historical precedent as the cohort typically surges before the central bank cuts rates, according to Bank of America.
"Homebuilders outperformed the S&P 500 in the 3-months prior to three of the last five initial rate cuts and building products have outperformed in four of the last five," analyst Rafe Jadrosich wrote Tuesday. "In the last three months, homebuilder stocks have increased +26% and building product stocks are up +13% compared to the S&P 500 up 2%."
"Assuming the Fed starts to cut rates in September, homebuilder and building product stocks will be trading at a higher valuation than going into any of the last five periods when the Fed started to cut," the analyst added.
— Brian Evans
Homebuilders, financials among stocks notching fresh highs
Here are the stocks reaching new highs during Tuesday trading:
- Omnicom Group trading at all-time-high levels back through our history to 1984
- eBay trading at levels not seen since January 2022
- Lennar trading at all-time-high levels back to when it began trading in 1971
- NVR, Inc. trading at all-time-high levels back to post-bankruptcy initial public offering in November 1993
- PulteGroup trading at all-time highs back to its IPO in 1972
- Oneok trading at all-time-high levels back through our history to 1979
- Arch Capital Group trading at all-time high levels back to when it began trading on the NASDAQ in 2000
- Ameriprise Financial trading at all-time highs back to its IPO in October 2005
- American Express trading at all-time-high levels back to its IPO in May 1977
- Bank of NY Mellon trading at all-time highs back to the merger between BNY (the first company listed on the New York Stock Exchange) and Mellon Financial in 2007
- BlackRock trading at levels not seen since January 2022
- Blackstone trading at all-time highs back to its IPO in June 2007
- Fidelity National Information Services trading at levels not seen since September 2022
- Mastercard trading at all-time-high levels since its IPO in May 2006
- Travelers trading at all-time highs back to its spinoff from Citi in 2002
- Visa trading at all-time-high levels since its IPO in March 2008
- DaVita Inc. trading at all-time-high levels back to the Total Renal Care IPO in October 1995
- HCA trading at all-time-high levels back to its IPO in March 2011
- Insulet trading at levels not seen since August 2023
- Automatic Data Processing trading at all-time-high levels back through our history to 1974
- Allegion trading at levels not seen since September 2021
- Carrier Global trading at all-time highs back to its spinoff from United Technologies in March 2020
- GE Aerospace trading at levels not seen since April 2008
- GE Vernova trading at all-time highs back to its spinoff from GE in April 2024
- Masco trading at all-time-high levels back to its IPO in 1984
- Parker Hannifin trading at all-time-high levels back to its IPO in 1964
- Pentair trading at all-time highs back through our history to 1972
- Rollins Inc. trading all-time highs back to when it began trading on the NYSE in 1968
- Trane Technologies trading at all-time-high levels back through Ingersoll Rand's history, before its recent merger with Gardner Denver
- Westinghouse Air Brake Tech trading at all-time highs back to the merger of Westinghouse Air Brake Co and MotivePower Industries in 1999
- F5 Networks trading at levels not seen since March 2022
- Fair Isaac trading at all-time highs back to when it was listed at the NYSE in 1986
- International Business Machines trading at all-time highs back to when it began publicly trading on the NYSE in January 1962
- Juniper trading at levels not seen since May 2011
- ServiceNow trading at all-time-high levels back to its IPO in June 2012
- Eastman Chemical trading at levels not seen since June 2022
- International Paper Company trading at levels not seen since October 2021
- Sherwin Williams trading at all-time highs back to when it began trading in 1920
- Boston Properties trading at levels not seen since September 2022
- CBRE trading at all-time-high levels back to its IPO in June 2004
- Essex Property Trust trading at levels not seen since May 2022
- Atmos Energy trading at all-time-high levels back to the Energas spinoff from Pioneer Corp in 1983
- American Water Works trading at levels not seen since July 2023
- CMS Energy trading at levels not seen since August 2022
- Entergy trading at levels not seen since February 2020
- Alliant Energy trading at levels not seen since September 2022
- Pinnacle West Capital trading at levels not seen since November 2020
— Samantha Subin
Stocks making the biggest moves midday: Gannett, Accenture and more
![Accenture signage is pictured in Warsaw, Poland, on Aug. 7, 2024.](https://image.cnbcfm.com/api/v1/image/108035430-1726597403781-gettyimages-2165265170-kalka-corporat240807_np8rJ.jpeg?w=1920&h=1080)
These are the stocks moving the most in midday trading:
- Gannett — Shares soared 16% after Citi upgraded the newspaper stock to a neutral rating from sell.
- Accenture — Shares dropped 4% after a Bloomberg report, citing people familiar with the matter, said the professional services company will move the bulk of its promotions to June from December.
- Hewlett Packard Enterprise — The tech hardware stock jumped 6% after Bank of America upgraded the stock to a buy rating from neutral.
Read the full list of stocks moving here.
— Lisa Kailai Han
Expect a post-Fed rebound in leading indicators, Wolfe Research said
Interest rate futures continue to imply that the Federal Reserve will cut rates by 50 basis points at its Wednesday meeting. But no matter the amount of the rate cut, Wolfe Research believes any loosening up in the Fed's monetary policy should provide some respite for the U.S. economy.
"We continue to remain bullish into year-end and expect markets to be hypersensitive to choppier incoming economic data," the investment firm wrote in a Tuesday note. "Our sense is that the Fed beginning a cutting cycle this week (whether it be 25 or 50 bps), along with the removal of the U.S. election overhang, should offer reprieve for U.S. consumers and spark a rebound in leading indicators, such as ISM manufacturing."
— Lisa Kailai Han
Teladoc heads for best day since July 2023
Shares of virtual health-care platform Teladoc surged 12% during Tuesday's session, putting the stock on track for its best day in more than a year and its sixth straight day of gains.
If it closes the session around this level, it would be the stock's largest percent increase since July 26, 2023, when shares soared about 27%. While Teladoc has plunged more than 57% in 2024, it has moved more than 27% higher this month.
— Sean Conlon
Wall Street analysts remain skeptical on Intel
![A sign is posted in front of Intel headquarters in Santa Clara, California, on Aug. 1, 2024.](https://image.cnbcfm.com/api/v1/image/108015165-1722536924631-gettyimages-2164837685-js1_2752_phdplmon.jpeg?w=1920&h=1080)
Shares of Intel were last trading more than 5% higher on Tuesday following the firm's Monday press release detailing its latest plans to right the ship.
The chipmaker said it would turn its foundry business into an independent unit, allowing it to raise outside capital. The company also announced an expanded collaboration to supply Amazon Web Services with Xeon chips and produce a custom artificial intelligence fabric chip, as well as additional U.S. government funding.
However, Wall Street analysts remained unconvinced. Bank of America kept its underperform rating, and JPMorgan reiterated the stock as underweight. Bernstein, Citi and Wells Fargo reiterated their market perform, neutral and equal weight ratings, respectively.
CNBC Pro subscribers can read the full story here.
— Lisa Kailai Han
Can't rule out the potential for a sell-off after a half-point rate cut, Nomura says
The market reaction to a half-point rate cut from the Federal Reserve on Wednesday could go both ways, according to Nomura.
"A 50bp rate cut would normally be assumed to send the market higher in a straightforward way, but we cannot rule out the potential for a rate cut of that size to send the market lower instead, as it could signal to investors that they should be more worried about a possible recession ahead," the Wall Street firm said in a note.
Nomura believes it is likely to see investors start to pare back on their U.S. equity exposure after the Fed meeting and in the lead up to the presidential election.
"It is also not hard to imagine that investors of all stripes—and not just macro investors—may start walking back their outstanding long positions in US equities in the run-up to a US presidential election whose outcome is highly uncertain," the firm said.
— Yun Li
Dollar gains against the yen
The dollar strengthened 0.8% to 141.74 against the yen ahead of the Bank of Japan's policy meeting on Sept. 19-20.
Week to date, the greenback has appreciated 0.6% against the yen, but still is 3.1% weaker on the month.
Economists and analysts polled by CNBC all forecast the central bank maintaining interest rates at their current levels at its upcoming meeting. However, the outlook for a rate hike in the October and December meetings is less certain.
— Hakyung Kim
Intel leads the Dow higher
Intel's 7.7% rally on Tuesday led the Dow Jones Industrial Average to a new all-time high.
Other large-cap tech names that fueled the 30-stock index's gains include Amazon and Microsoft, which are up 1.9% and 1.4%, respectively.
— Hakyung Kim
China Internet ETF, China Large-Cap ETF both on pace for best day since August
Shares of the KraneShares CSI China Internet ETF (KWEB) and iShares China Large-Cap ETF (FXI) moved higher in morning trading, putting them each on pace for their best day since last month.
KWEB jumped around 2% and is heading for its best day since Aug. 29, when shares rose 2.51%. Meanwhile, FXI was up nearly 2% and is heading for its best day since Aug. 16, when the fund gained 2.01%.
Li Auto led KWEB higher, rising nearly 9%, while iQIYI led FXI, with shares nearly 5% higher. This year, the KWEB has fallen more than 3%, while FXI has risen more than 10%.
— Sean Conlon, Gina Francolla
Airbnb leads consumer discretionary higher
![](https://image.cnbcfm.com/api/v1/image/107371677-1707501261093-gettyimages-1970274171-dsc_3386_nlwzncoe.jpeg?w=1920&h=1080)
Airbnb shares jumped 5.8% Tuesday morning, leading the consumer discretionary sector's broader 1.5% gain.
Aptiv and Pool Corporation also advanced more than 3% to outperform the sector.
— Hakyung Kim
Stocks open higher Tuesday
U.S. stocks began Tuesday's trading session in the green.
The S&P 500 advanced 0.4%. The Dow Jones Industrial Average rose 76 points, or 0.2%. The Nasdaq Composite climbed 0.8%.
— Hakyung Kim
Investors are the most overweight on utilities in more than a decade
Investors are the most overweight on utility stocks since December 2008, according to Bank of America's global fund manager survey.
Funds rotated this month out of cyclical sectors and into defensive sectors such as utilities, according to the survey, which polls about 300 institutional, mutual and hedge fund managers around the world.
These investors are also the most underweight on energy stocks since December 2020 as crude oil futures have sold off steeply this month, according to the survey.
The S&P 500 utility sector has rallied about 24% this year and is ahead more than 3% this month. Utilities are riding tailwinds on the expectation that electricity demand will surge due to artificial intelligence, manufacturing and the electrification of the economy.
The energy sector, on the other hand, has gained about 3% this year and is down more than 5% this month.
— Spencer Kimball
Retail sales showed an unexpected increase in August
![People walk past the Gucci store on Fifth Avenue in New York City on March 20, 2024.](https://image.cnbcfm.com/api/v1/image/107390129-1710949678660-gettyimages-2099422874-_s1_0914_wd64zzyk.jpeg?w=1920&h=1080)
Retail sales were stronger than expected in August as consumers showed resilience despite fears of an economic pullback.
The Commerce Department's initial estimate for all sales showed an increase of 0.1% on the month, down sharply from the upwardly revised gain of 2.3% in July but better than the Dow Jones forecast for a decline of 0.2%.
Excluding autos, sales increased 0.1%, slightly lower than the 0.2% consensus estimate. The retail sales numbers are adjusted for seasonal factors but not inflation.
Spending rose 1.7% for miscellaneous stores and 1.4% for online retailers. With oil prices falling, gas stations saw a 1.2% decline in receipts while sales at clothing and furniture stores fell 0.7% each.
— Jeff Cox
Microsoft, Intel, SolarEdge among stocks making biggest premarket moves
Check out the companies making headlines before the bell:
- Microsoft — Shares were up about 2% after the tech giant increased its quarterly dividend 10.7% to 83 cents per share. The new dividend is payable Dec. 12. The company also approved a new $60 billion share repurchase program.
- SolarEdge Technologies — Shares fell more than 6% after Jefferies downgraded the solar company to underperform from hold. The firm sees rising domestic competition and high inventory levels overseas putting pressure on SolarEdge.
- Intel — The stock jumped roughly 7% after the chipmaker announced it is creating a separate entity for its foundry business, a structure that will allow the unit to have its own board and raise outside funding.
For the full list, read here.
— Pia Singh
Fed likely to cut by just a quarter point, CNBC survey finds
![Jerome Powell at Jackson Hole on Aug. 23, 2024.](https://image.cnbcfm.com/api/v1/image/108024970-1724429772865-untitled-55-15.jpg?w=1920&h=1080)
Though markets are pricing in a bigger move, respondents to the latest CNBC Fed Survey think the Federal Reserve this week will lower interest rates by just a quarter percentage point.
Of the 27 economists, strategists and fund managers responding, 84% indicate a move of just 25 basis points when the Fed announces its rate decision Wednesday. Traders in the fed funds markets implied a 65% probability of a 50 basis point, or half percentage point, cut as of Tuesday morning, according to the CME Group's FedWatch Tool.
Despite the debate over which way the Fed swings, 74% of respondents said an economic soft landing is still likely.
— Jeff Cox
Microsoft pops after dividend hike, buyback approval
![Microsoft CEO Satya Nadella speaks at the company's annual developer conference in Seattle on May 21, 2024.](https://image.cnbcfm.com/api/v1/image/108023853-17242740432024-05-21t173935z_402974582_rc24v7ad5n4z_rtrmadp_0_microsoft-ai.jpeg?w=1920&h=1080)
Microsoft shares were up about 2% in the premarket after the tech giant increased its quarterly dividend 10.7% to 83 cents per share. The new dividend is payable Dec. 12. The company also approved a new $60 billion share repurchase program.
— Fred Imbert
Stock struggles likely to continue, Wells Fargo says
Wells Fargo investment strategy analyst Austin Pickle noted the stock market's struggles may not relent anytime soon.
"In each of the past seven years, the S&P 500 Index has experienced a late-summer peak and subsequent drawdown ranging from 5% to 20%," he wrote. "Simmering economic concerns, continued geopolitical risks, and increasing doubts about the near-term prospects for artificial intelligence suggest that stocks may continue to struggle this season as well."
— Fred Imbert
European markets open higher
European stocks opened higher Tuesday, as upcoming central bank meetings remain in focus.
The pan-European Stoxx 600 index opened up 0.57%, with all sectors and major bourses in the green. Banks added 0.85%, while construction and materials were 0.8% higher.
It follows a negative start to the week for the regional benchmark, which closed 0.2% lower Monday.
— Karen Gilchrist
Intel pops 8% after company shares plans to create separate foundry business
![U.S. President Joe Biden tours the Intel Ocotillo Campus, in Chandler, Arizona, on March 20, 2024.](https://image.cnbcfm.com/api/v1/image/107390283-17109600802024-03-20t184017z_1530117755_rc2up6ajz288_rtrmadp_0_usa-election-biden.jpeg?w=1920&h=1080)
Intel shares rallied more than 8% in overnight trading after the chipmaker said it will turn its foundry business into a separate entity as the company looks to turn around its business.
CEO Pat Gelsinger said the move would enable Intel's foundry business to "evaluate independent sources of funding." The company is also considering spinning off the business, CNBC reported, citing a person familiar with the matter.
The Biden Administration also awarded Intel up to $3 billion in funding through the CHIPS Act on Monday.
Shares have plummeted more than 58% since the start of 2024.
— Samantha Subin, Rohan Goswami, Kif Leswing
Stock futures open little changed
Stock futures opened little changed Monday evening.
Futures tied to the S&P 500 edged down 0.05%, while Nasdaq-100 futures hovered near the flatline. Futures linked to the Dow Jones Industrial Average lost 14 points.
— Samantha Subin