Wall Street drifts near its all-time high as most stocks rise

U.S. markets drifted near record territory Wednesday as investors digested mixed corporate earnings reports and economic data that painted a complex picture of the nation’s economic health.

The S&P 500 edged up 0.2%, bringing it within 0.7% of its all-time high set in late October. The Dow Jones Industrial Average gained 174 points, or 0.6%, while the tech-heavy Nasdaq composite remained virtually unchanged by midday trading.

Among the day’s winners, semiconductor supplier Marvell Technologies rose 4.1% after exceeding profit expectations in its latest quarterly report. CEO Matt Murphy attributed the strong performance to robust demand for the company’s data center products. Marvell also announced a significant strategic move, revealing plans to acquire Celestial AI for $3.25 billion to strengthen its artificial intelligence infrastructure business.

Retailer American Eagle Outfitters delivered one of the day’s strongest performances, surging 16.1% after reporting better-than-expected profits. CEO Jay Schottenstein highlighted a promising start to the holiday shopping season, noting accelerated demand across the company’s brands during the Thanksgiving weekend, a crucial period for retailers.

In the biotech sector, Capricor Therapeutics skyrocketed 352% after releasing encouraging clinical results for its potential therapy targeting Duchenne muscular dystrophy, a rare genetic disorder that causes progressive muscle degeneration.

However, market gains were tempered by declines in several influential stocks. Microsoft dropped 2%, exerting significant downward pressure on the S&P 500 as the index’s heaviest component. Nvidia, despite slipping just 0.4%, also weighed heavily on market performance given its position as Wall Street’s most valuable company.

Macy’s presented a puzzling case for investors, with shares falling 1% despite reporting quarterly profits that substantially exceeded analysts’ expectations. The department store chain’s modest decline may reflect elevated expectations following its impressive 34.1% stock price increase year-to-date—more than double the S&P 500’s performance.

Cybersecurity firm CrowdStrike also experienced a slight 0.5% decline despite topping profit forecasts, potentially another victim of high expectations following its 51% year-to-date gain.

In economic news, a report from payroll processor ADP suggested private employers may have cut more jobs than they added in November, a much weaker result than economists anticipated. While the ADP report has an imperfect track record predicting the government’s comprehensive monthly jobs report, the data maintains market expectations that the Federal Reserve will implement its third interest rate cut of the year when it meets next week.

Counterbalancing this concerning employment data, the Institute for Supply Management’s report on service sector activity showed stronger-than-expected growth in November across retail, finance, insurance, and other service industries. Perhaps more significantly for Fed watchers, the survey indicated prices were increasing at their slowest rate since April, potentially easing inflation concerns that have been the primary argument against interest rate cuts.

Bond markets reflected the mixed economic signals, with the yield on the 10-year Treasury dipping slightly to 4.07% from 4.09% the previous day. The easing bond environment helped boost Bitcoin, which climbed above $92,000 after experiencing volatility in recent weeks that briefly sent the cryptocurrency below $81,000 last month.

Overseas, European markets traded nearly flat while Asian markets delivered mixed results. Japan’s Nikkei 225 jumped 1.1%, led by technology stocks including Tokyo Electron, which surged 4.7%. SoftBank Group leaped 6.4% following reports that founder Masayoshi Son expressed regret over having sold shares in chipmaker Nvidia to fund other investments.

Chinese markets moved in the opposite direction after weak factory activity data, with Hong Kong’s index falling 1.3% and Shanghai declining 0.5%, continuing to reflect ongoing concerns about China’s economic momentum.