US stocks mixed as cyclicals take the lead, crude weakness persists

NEW YORK :U.S. stocks were mixed on Wednesday and gold gained strength as bank earnings continued to beat expectations while fears of softening global demand weakened megacap growth stocks and quelled investor risk appetite.
The S&P 500’s gains appeared to be held in check by underperforming megacap growth stocks, which pulled the Nasdaq into negative territory.
The blue-chip Dow, powered by financial shares, was modestly higher.
“Cyclicals and economically sensitive stocks have been outperforming,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “I think the market believes a soft landing is being achieved and that the odds of reacceleration in growth are higher than the odds of recession.
Large banking firms have reported a string of upbeat earnings. Most recently, Morgan Stanley reported consensus-beating quarterly profit, sending its shares to a record high.
On Tuesday, chip equipment maker ASML forecast weaker than expected 2025 sales, prompting demand concerns.
“Bank results have been good, but the update from ASML and I think have led to a bit of a sell-off in AI (artificial intelligence)-adjacent space,” Mayfield added.
The Dow Jones Industrial Average rose 197.71 points, or 0.46 per cent, to 42,938.13. The S&P 500 climbed 5.23 points, or 0.09 per cent, to 5,820.35 and the Nasdaq Composite fell 16.59 points, or 0.09 per cent, to 18,299.00.
European stocks were modestly lower in the wake of disappointing results from ASML and luxury goods maker LVMH weighed on sentiment as investors remained cautious ahead of the European Central Bank’s (ECB) policy decision on Thursday.
MSCI’s gauge of stocks across the globe fell 0.98 points, or 0.12 per cent, to 850.27.
The STOXX 600 index fell 0.09 per cent, while Europe’s broad FTSEurofirst 300 index fell 2.43 points, or 0.12 per cent
Emerging market stocks fell 5.88 points, or 0.51 per cent, to 1,143.85.
Benchmark U.S. Treasury yields eased as financial markets cemented their bets for a smaller interest rate cut from the Federal Reserve at the conclusion of next month’s policy meeting.
The yield on benchmark U.S. 10-year notes fell 3 basis points to 4.008 per cent, from 4.038 per cent late on Tuesday.
The 30-year bond yield fell 3.5 basis points to 4.2926 per cent from 4.328 per cent late on Tuesday.
The 2-year note yield, which typically moves in step with interest rate expectations, fell 2.3 basis points to 3.933 per cent, from 3.956 per cent late on Tuesday.
The dollar posted a modest gain against a basket of world currencies as softer-than-expected British inflation data gave the Bank of England wiggle room to cut rates, sending the sterling lower, while the euro hit a 10-week low ahead of the ECB meeting.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.14 per cent to 103.40, with the euro down 0.09 per cent at $1.088.
Against the Japanese yen, the dollar strengthened 0.27 per cent to 149.59.
Oil prices dipped as expectations for ample supply offset simmering Middle East tensions, while OPEC and the International Energy Agency tempered their global demand forecasts for 2024 and 2025.
U.S. crude fell 0.18 per cent to $70.45 a barrel and Brent fell to $74.20 per barrel, down 0.05 per cent on the day.
Gold prices extended recent gains, boosted by languid stocks and weaker bond yields.
Spot gold rose 0.4 per cent to $2,671.75 an ounce.