US Stock Market Ahead Of Fed Minutes: S&P 500 Hit New Record Highs; DJIA, Nasdaq Rally; Wall Street Outlook

The US stock market witnessed yet another bullish day, with the S&P 500 hitting a new all-time high. Meanwhile, the Dow Jones and Nasdaq Composite also logged substantial buying momentum driven by a strong rally in chipmaker stocks. The pause in rising bond yields and the tech sector's credit outlook added to the buying sentiment. Investors will await the US Federal Reserve's minutes of meeting on Wednesday for further clarity on the rate hike cycle ahead.

Dow Jones + Nasdaq + S&P 500

Overnight, the Dow Jones Industrial Average index surged by 253.38 points or 0.5% to close at 51,521.28. The strongest buying was seen in S&P 500 as it touched a new all-time high of 7,844.52 before ending at 7,818.93, up by 44.98 points or 0.6%. Meanwhile, the Nasdaq Composite index ended at 27,599.89, higher by 122.58 points or 0.5%.

Chipmakers were among the strongest performers, led by AMD (2.8%), Marvell Technology (5.8%) and Broadcom (3.7%). Sentiment was further supported as the rise in bond yields paused, easing pressure on the tech sector's credit outlook. Meanwhile, oil prices recovered as ongoing risks to Middle East energy flows outweighed signs of improving regional supply, as per Trading Economics.

US Stock Futures Today

Unlike the Wall Street's performance overnight, Dow Jones futures traded at 51,788, down by 28 points on Wednesday as investors await for Fed's minutes of meeting. Nasdaq 100 futures traded marginally up to 31,485 and S&P 500 futures traded higher by 7 points to 7,880.75.

According to Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, the US 10-year Treasury yield remains elevated near 5.28%, keeping the return available on dollar assets attractive and maintaining pressure on emerging-market valuations and foreign flows. Unless yields decline meaningfully and remain lower, the external environment for Indian equities is unlikely to improve substantially.

He further added that Brent settled near $100.60 after briefly falling toward $97. Recovering Middle East exports and emergency-reserve measures have reduced immediate supply anxiety, but the sharp intraday recovery shows that the geopolitical premium has not disappeared.

US Stock Market Outlook On Wednesday

US Fed will declare minutes from September monetary policy meeting on Wednesday. As per Morningstar's note, the Federal Reserve's meeting minutes could take on extra importance when they are released on Wednesday, given that they will reflect the thought process behind the September decision to raise the federal-funds rate by 25 basis points.

How will Fed minutes impact market? Michael Kramer, founder of Mott Capital Management in a note said, those minutes could give the market important clues about the metrics the Fed uses when making decisions, and hint at what the central bank is considering when it comes to how many more rate hikes may be in store.

"One thing that stood out from the press conference following the September rate-hike decision was that Fed Chairman Kevin Warsh said he would be hard-pressed to describe broad financial conditions as restrictive. Therefore, the widely shared view was to remove a "dose" of that accommodation," adding Kramer said, "A dose implies only a portion - which probably means more hikes may come down the road."

Apart from Fed minutes, data like Consumer Credit, EIA Crude Oil Inventories, and MBA Mortgage Applications Index are scheduled on Wednesday. Among earnings, watch out for Applied Digital Corporation (APLD), Levi Strauss & co. (LEVI), Resources Connection Inc. (RGP), and Richardson Electronics Ltd. (RELL).

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