S&P 500 bounces as it tries to shake off early second-quarter struggle: Live updates

The rally in crude oil prices could make it more difficult for the Federal Reserve to cut interest rates later this year though the central bank should still have room to maneuver, according to to Bank of America.

U.S. crude oil future prices have risen nearly 20% this year as demand grows, global inventories fall, geopolitical tensions mount and OPEC+ slashes production.

“With services inflation appearing particularly sticky, an oil price run may further cap the ability of central banks to provide stimulus,” Francisco Blanch, a commodities strategist at Bank of America, told clients on Wednesday. “So, oil is fighting the Fed, again,” Blanch wrote.

Energy prices are expected to rise heading into the summer driving season as the global market slips into a crude oil supply deficit of 450,000 barrels per day, according to Blanch. Bank of America is forecasting that Brent will peak at $95 a barrel. The global benchmark is currently trading above $89.

Rising fuel prices contribute to headline inflation, though gas prices would have to hit $5 to $6 per gallon for the impact to be felt, according to Blanch. This should provide room for the Fed to cut rates in the coming months, he said. Energy prices are not highly correlated with core inflation, which is what the central bank primarily focuses on, according to the analyst.

“Even if rising energy prices could make the Fed’s job of lowering interest rates more difficult, central banks remain mainly focused for now on bringing down core inflation, or the elements of prices not directly associated with volatile food and fuel,” Blanch said.

— Spencer Kimball

May copper futures reached a high of $4.1995 per pound on Wednesday, their most expensive since Feb. 22, 2023. Copper, often referred to as “Dr. Copper” for its ability to predict the health of the economy, is now higher by 4.6% this week and on pace for its first weekly gain in three weeks.

That move helped send the Global X Copper Miners ETF (COPX) to its highest since April 2022, on pace for a fifth straight advance for the first time since last November. Freeport-McMoRan climbed to its highest since since April 2022 while Southern Copper reached an all-time high.

Among other base metals, aluminum on the London Metals Exchange rose to its highest Wednesday since April, 2023, while zinc was on track for its best day since last November.

— Scott Schnipper, Nick Wells

Small-cap stocks outperformed on Wednesday, offering a bright spot amid a particularly tough week.

The small-cap focused Russell 2000 added 0.7% in the session, beating the broad S&P 500‘s 0.3% gain.

Despite that outsized advance, the index is still lagging. The Russell 2000 has lost more than 2% this week, while the S&P 500 has slipped less than 1%. The index has also clearly underperformed the broader market on the year.

Billionaire financier and Mets owner Steve Cohen said he believes a four-day work week could soon be the norm — an idea that has also influenced his 2023 investment in golf startup league TGL. 

“I think I would have done the golf investment anyway, because I think there’s a longer-term thought, but my belief is a four-day work week is coming,” Cohen told CNBC’s “Squawk Box” on Wednesday. 

The increasing presence of artificial intelligence will likely also contribute to a shorter work week, as well as the fact there are generally lower productivity levels on Friday, Cohen said.

The full story can be found here.

— Hakyung Kim

Disney traded down more than 1% in afternoon trading as investors reacted to news that the entertainment giant won its proxy fight against Nelson Peltz’s Trian Partners.

Shareholders voted to reelect the media powerhouse’s full board, according to preliminary results. While the victory was widely expected, it marks the end to a months-long battle.

Disney shares have soared nearly 34% in 2024, notably outperforming the broader market.

Guggenheim Securities updated its estimates on a handful of Disney’s businesses and raised its price target to $140 from $125 Wednesday morning as investors awaited the results.

Given that the outcome of the vote “is unlikely to impact near-term operating trends or financial results,” the firm updated its model to reflect momentum in Disney’s domestic and international parks businesses, continued pressure on its linear networks business and an “incrementally more back-half weighted cadence” in content, Guggenheim’s Michael Morris said in a note Wednesday.

— Alex Harring, Tanaya Macheel

Ark Invest CEO Cathie Wood told CNBC’s Andrew Ross Sorkin on Wednesday that now is “not the time to run for the hills” on Tesla.

The comments from Wood come as the shares underperform on the year and as the investment firm scooped up more shares of the electric vehicle maker on Tuesday.

Read more on why Wood remains bullish on Tesla and what she expects for the stock here.

— Samantha Subin

Federal Reserve Chair Jerome Powell expressed confidence Wednesday about the current state of the economy and policy.

“I think we’ve gotten to what is, knock on wood, a pretty good place,” Powell said in remarks at Stanford University. “We’re using our tools now to try to bring inflation down the rest of the way to 2%, all while keeping the economy strong as well.”

—Jeff Cox

Here are some of the stocks on the move during midday trading:

Read the full list of names on the move here.

— Samantha Subin

Federal Reserve Chair Jerome Powell said Wednesday that the central bank needs more evidence that price pressures are easing to begin lowering interest rates.

“On inflation, it is too soon to say whether the recent readings represent more than just a bump,” Powell said in prepared remarks ahead of a question-and-answer session at Stanford University.

“We do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2 percent,” he added. “Given the strength of the economy and progress on inflation so far, we have time to let the incoming data guide our decisions on policy.”

— Jeff Cox, Alex Harring

Real estate, utility and consumer staple stocks bucked the S&P 500‘s advance on Wednesday.

The three sectors were the only of the 11 that comprise the broad index to trade lower. As a whole, the S&P 500 was up about 0.4%.

On the other hand, information technology and industrials led the index higher, gaining more than 0.7% each.

— Alex Harring

Billionaire hedge fund manager Steve Cohen told CNBC’s Andrew Ross Sorkin on “Squawk Box” that it will be difficult for the Federal Reserve to get inflation back down to its 2% goal.

“The Fed thinks it’s eventually going to come down to a 2% inflation rate. … I think that’s going to be hard,” Cohen said.

The Point72 CEO said Wednesday that he doesn’t disagree with market expectations for three rate cuts this year, but he added that there’s a lot of “underemployment” in the country, which could create upward pressure on inflation if economic growth remains strong.

— Jesse Pound

Ulta Beauty shares dove more than 13% in trading after executives warned that sales growth in the category is slowing faster than anticipated. As of shortly after 10:45 a.m. ET, the stock was tracking for its worst session since March 2020.

The beauty products retailer was speaking at the JPMorgan Retail Round Up Conference and said it had anticipated a sales moderation in 2024 after several years of “very strong growth.” However, it was estimating a “mid-single digit range.”

“What we’ve seen so far is a slowdown in the total category across price points and segments,” Ulta said, according to a FactSet transcript. Management added that the trend is “a bit earlier and a bit bigger than we thought.”

—Christina Cheddar Berk

Wednesday’s stronger-than-expected private payroll data from the ADP was bad news for investors hoping the Federal Reserve will start lowering interest rates in May, said Quincy Krosby, chief global strategist for LPL Financial.

“The ADP report offers little confidence that inflation is easing at clip that will allow the Fed to begin cutting rates as soon as the May FOMC meeting,” Krosby said.

Krosby said traders will monitor commentary from Fed Chair Jerome Powell later on Wednesday to see if he appears more hawkish.

— Alex Harring

The ISM non-manufacturing purchasing managers index came in under expectations for March.

The index registered 51.4 for the month. That’s under the 52.7 consensus estimate of economists polled by Dow Jones. It also marks a decline from February’s 52.6 reading.

— Alex Harring

The S&P 500 kicked off Wednesday lower, putting the broad index on track for a third straight losing day.

The broad index lost 0.1% shortly after 9:30 a.m. ET, while the Nasdaq Composite tumbled 0.4%. The Dow slipped around 0.1%.

— Alex Harring

Atlanta Federal Reserve President Raphael Bostic said Wednesday that he only expects one decrease to interest rates this year. It will likely occur in the fourth quarter, he said.

Bostic is one of several central bank officials speaking to media and at events around the U.S. on Wednesday.

— Alex Harring, Jeff Cox

These are some of the stocks making the biggest moves in premarket trading:

For more big movers, check out our full list here.

— Tanaya Macheel

Companies added more workers than economists forecasted in March, offering another sign of continued strength in the economy.

ADP data reported Wednesday morning showed private payrolls increased by 184,000 workers in the month. That’s higher than the 155,000 estimate of analysts polled by Dow Jones and marked the fastest pace of growth since July 2023.

— Alex Harring, Jeff Cox

The S&P 500 could be in for a pullback between 5% and 10%, according to Piper Sandler’s chief market technician.

Craig Johnson told clients in a Wednesday note that the benchmark index could see a high-level trading range after the strong first quarter, in which the S&P 500 gained more than 10%. He also advised investors to watch individual stocks testing key levels.

“Be vigilant of equities and indices that are the first to fall below their 20-day MAs and violate weekly uptrends, as their weakness can make them the leaders to the downside,” he wrote to clients, using the acronym for moving average. “Be even more cautious of stocks that cannot hold support at their 50-day MAs.”

Johnson has a year-end target of 5,050, which reflects a downside of about 3% from where the index closed Tuesday. CNBC Pro subscribers can click here to see where others predict the S&P 500 will finish 2024.

— Alex Harring

Intel fell more than 4% in extended trading after revealing a growing operating loss in its semiconductor manufacturing business.

The California-based company reported an operating loss of $7 billion in 2023 for the arm of the company, which is commonly referred to as the foundry business. That’s wider than the $5.2 billion loss seen in the prior year.

Sales came in at $18.9 billion for 2023, smaller than the $27.5 billion posted in 2022.

The numbers, which were disclosed as part of a regulatory filing, come amid a tough period for Intel’s stock. Shares have bucked the broader market uptrend in 2024 with a drop of more than 12%. That marks a reversal after the stock soared more than 90% in 2023.

— Alex Harring, Kif Leswing

China’s service sector activity expanded at its fastest pace since December, according to surveys from Caixin.

The services purchasing managers index in China rose to 52.7 in March, up from 52.5 in February. This also marked the 15th straight month of expansion for the sector.

Caixin noted in its report that this was due to new business in the sector rising, with anecdotal evidence revealing that “improvements in underlying demand conditions and business development efforts helped to boost the rise in new work,” the report said.

— Lim Hui Jie

Shares of Fast Retailing plunged to a two-week low, falling over 4%, after the firm disclosed that same-store sales in its Uniqlo stores in Japan fell in March. The firm is the largest component of the Nikkei 225 index.

The company saw five store openings in March domestically, but eight store closures.

Same-store sales, including online sales, decreased by 1.5% year on year, while total sales in March increased by 1%.

Fast Retailing explained the sales contraction was due to sales of spring items struggling to gain momentum, due to “persistently cold weather throughout the month [in Japan].”

Taiwan Semiconductor Manufacturing Co evacuated production lines after a major earthquake hit Taiwan early Wednesday.

A company spokesperson said safety systems were operating normally.

“To ensure the safety of personnel, some fabs were evacuated according to company procedure,” the person said.

Shares of TSMC fell 1.5% in early trading, while the broader Taiwan Weighted Index dropped 0.9%.

— Shreyashi Sanyal

The ADP private payrolls report is set to release before markets open on Wednesday. Economists polled by Dow Jones anticipate companies to have added 155,000 in March. That would be an increase from the 140,000 positions added in the prior month.

— Sarah Min

The recent stock market selloff resembles a “return to the norm” after a long period of upward and sideway moves, according to Adam Sarhan.

“We’ve seen the market go pretty much up or sideways just about every single day for the last five months,” said the CEO of 50 Park Investments. “It’s perfectly normal and long overdue to see some selling come into the market. That’s what’s happening now after a big move up.”

He added that investors may also be “taking some risk off the table” ahead of fresh data points, including Friday’s March jobs report.

— Samantha Subin

Here are the stocks making the biggest moves in extended trading:

• Intel — Shares dropped about 4% after Intel disclosed a $7 billion operating loss in its foundry business.
• Cal-Maine Foods — Shares jumped 5.2% after the egg producer exceeded expectations in its latest quarter. In its third quarter, Cal-Maine Foods reported earnings of $3 per share, better than the $2.45 per-share earnings anticipated by analysts polled by FactSet. Revenue of $703.1 million topped the FactSet consensus estimate of $692.4 million.
• Dave & Buster’s Entertainment — Shares gained 5% after the restaurant and entertainment company reported its latest quarterly results. Dave & Buster’s Entertainment posted adjusted fourth-quarter earnings of $1.03 per share, weaker than the FactSet consensus estimate of $1.10 per share. Revenue of $599.1 million was also lower than the $602.6 million estimate.

— Sarah Min

Stock futures opened little changed Tuesday night.

Dow futures rose 9 points, or 0.02%. S&P 500 futures and Nasdaq 100 futures climbed 0.03% and 0.05%, respectively.

— Sarah Min