The S&P 500 closed higher Wednesday as Alphabet led a rebound in tech following a favourable antitrust ruling and Treasury yields cooled their recent ascent as signs of a softer labor demand boosted rate-cut hopes.
At 4:00 p.m. ET (20:00 GMT), the benchmark S&P 500 rose 0.5%, the tech-heavy Nasdaq Composite climbed 1%, and the blue-chip Dow Jones Industrial Average fell 24 points, or 0.1%.
Alphabet, Apple shares rise on antitrust ruling Shares of Alphabet (NASDAQ:GOOGL) rose 9% after a judge ruled that Google does not have to undergo a forced spin-off of its popular Chrome browser. The Justice Department had earlier called for Google to divest Chrome and its Android operating system as part of a long-running antitrust case against the company.
Google will still be required to share some of its search data with rivals, and will no longer be allowed to sign exclusive contracts to promote and license its products.
The court ruling was deemed a legal win for the tech giant, removing the short-term regulatory overhang on the stock, Oppenheimer said as it lifted its price target on Alphabet to $270 from $235.
"Alphabet will not divest Chrome/ Android and can continue to pay Apple for Search users (despite being required to end Search exclusively with Apple)," Oppenheimer added. "Alphabet/Apple can now partner on AI."
Apple (NASDAQ:AAPL) shares also moved higher after the ruling allowed Google to continue paying the iPhone maker billions of dollars to set Google as the default search engine in its Safari internet browser.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. In other news, Newsmax Inc (NYSE:NMAX) filed a lawsuit Wednesday alleging that Fox News suppressed its right-leaning rivals.
On the earnings front, Dollar Tree Inc (NASDAQ:DLTR) fell sharply even as Q2 results topped analyst estimates.
Macy’s, meanwhile, rallied as investors cheered the department store’s better-than-expected quarterly results.
Treasury yields cool on signs of soft labor demand Ahead of the crucial August jobs report due later this week, investors digested fresh signs of cooling labor demand as job openings fell the most since the pandemic.
Further signs of weakening demand for labor, boosted expectations for a rate cut later this month, forcing Treasury yields to take a breather from the recent rally.
Fed Governor Christopher Waller on Wednesday reiterated his view for a rate cut in September amid worries that weakness in the labor market is signaling underlying economic troubles.
The Fed’s latest "Beige Book" released Wednesday flagged fresh signs of consumer weakness and signaled that firms are bracing for inflation in the months ahead.
Salesforce to report On the earnings front, software firm Salesforce (NYSE:CRM) is expected to unveil its latest returns after the close of U.S. stock markets.
The results come as worries are growing that cracks may be emerging in a longstanding artificial intelligence boom that has underpinned stocks during a time of elevated valuations and broader economic uncertainty, according to analysts at Vital Knowledge.
"[S]entiment has been cautious amid concerns about AI displacement risk, although the narrative has started to shift in the favor of enterprise software in the last couple of weeks thanks to some solid earnings reports from the industry," the analysts wrote in a note.
