Investing.com – Market Update

The S&P 500 closed higher on Wednesday as investors continued to digest clues on interest rates from the Federal Reserve, ahead of fresh inflation data and Tesla’s robotaxi event.

At 4:00 p.m. ET (2000 GMT), the Dow Jones Industrial Average increased by 431 points (1%), the S&P 500 rose by 0.7%, and the NASDAQ Composite added 0.5%.

Fed Minutes Show Majority Supported Jumbo Rate Cuts

While a "substantial majority" of Federal Reserve policymakers backed the central bank's jumbo rate cut in September, some members preferred a more modest approach due to concerns about the economy's strength, according to the minutes of the September 17-18 meeting released Wednesday.

Recent data suggests stronger economic growth, diminishing the chances of further significant rate cuts. Strong payrolls data from last week raised doubts about the Fed's need for aggressive rate cuts. Traders are pricing an 81.1% chance of a 25 basis point cut in November, with an 18.9% probability that rates will remain unchanged. The Fed had cut rates by 50 basis points in September, indicating future cuts will depend on inflation and labor market developments.

The consumer price index for September is set to be released Thursday, providing fresh insights into monetary policy direction. There are concerns regarding the difficulty of achieving 2% inflation in light of a robust labor market.

Google Faces Potential Break-Up; Tesla Robotaxi Event in Focus

Alphabet (NASDAQ:GOOGL) saw a 2% decline following news that the US Department of Justice is considering sanctions against Google’s parent company amidst an antitrust ruling that found it guilty of market abuse. The DOJ is evaluating both behavioral and structural remedies to prevent Google from leveraging its products to dominate the search market.

The DOJ stated, "For more than a decade, Google has controlled the most popular distribution channels, leaving rivals with little-to-no incentive to compete for users."

Reddit Inc (NYSE:RDDT) ended slightly higher after Jefferies initiated a buy rating due to expectations of robust user growth boosting earnings. Boeing Co (NYSE:BA) fell over 3% amid a union strike, while Arcadium Lithium (NYSE:ALTM) soared 31% following Rio Tinto's agreement to acquire the company for $6.7 billion.

Tesla Inc (NASDAQ:TSLA) fell 1% as it prepared for its robotaxi event scheduled for Wednesday.

(Contributions from Peter Nurse and Ambar Warrick)