S&P 500 and Nasdaq close higher as Fed worries are outweighed by tech strength

The technology sector helped U.S. stock prices close higher on Wednesday, as investors, unable to access economic data due to the shutdown of the federal government, turned to the minutes from the Federal Reserve’s latest policy meeting to get a sense of the outlook for rate cuts until year-end.

Nasdaq, the tech-heavy market, was in front. Its gains were largely due to megacaps related to artificial intelligence that have led this year's market gains.

S&P 500 & Nasdaq closed at new highs.

The report by the Mortgage Bankers Association shows that home loan demand dropped 4.7% despite the recent easing of interest rates.

Bill Merz is the head of Capital Market Research for U.S. Bank Wealth Management in Minneapolis.

"Anything related to AI attracts a lot of attention."

As investors seek a safe haven in gold as a hedge to growing risks, the price of the metal has surged above $4,000 an ounce.

Merz continued, "We have seen over the past few years how stocks and safe-havens work together." "Another part is due to the dual reality of... fundamentals for now are supporting higher valuations than usual, while simultaneously deficit spending must be financed with additional debt."

The U.S. shutdown is now in its eighth day. A congressional deadlock suggests that market participants won't have any official economic indicators to work with for some time. This will leave markets without much information until the third quarter earnings season begins next week.

Investors looked for information in the absence of any data. They were looking at the third quarter earnings season, which begins next week, and the minutes of the Federal Open Markets Committee's September meeting.

These minutes revealed a committee divided, with policymakers worried about the rising risks of the labor market but still cautious about inflation. While "most" felt that it would likely be appropriate to further ease policy over the rest of the year, the timing and speed of future moves remain open.

Zachary Hill is the head of Horizon Investments' portfolio management in Charlotte, North Carolina. "More generally, the Fed is not in a good position without public-sector economic data, as (the shutdown continues to drag on), which makes policymakers' already difficult job even harder."

Preliminary data shows that the S&P 500 rose 39.58 points or 0.58% to 6,753.48 while the Nasdaq Composite rose 255.02 or 1.11% to 23,041.74. The Dow Jones Industrial Average increased 5.68 points or 0.01% to 46,608.66.

Datadog shares rose after Bernstein increased its price target for the cloud security company, while Intercontinental Exchange shares fell after Barclays reduced its price targets on the stock.

Fair Isaac Corp. fell after Equifax, the credit bureau, announced that it would offer lower mortgage credit scores.

The surge in gold prices has helped U.S. listed shares of Gold Fields and Newmont gain ground. Dell's stock jumped after several brokerages raised the price target for its stock.

Citigroup upgraded Freeport-McMoRan to "buy" status from "neutral". Joby Aviation fell after the electric air-taxi maker priced its $514 million share offering at a discount of 10.9% to its previous closing price.

AMD has extended its gains to a third consecutive day.

(source: Reuters)