US stocks were mixed on Wednesday after markets hit all-time highs, as investors eyed upcoming data for cues about the health of the economy and the prospect of another big interest rate cut.
The Dow Jones Industrial Average (^DJI) fell about 0.4%, reversing earlier gains, while the S&P 500 (^GSPC) maintained positive momentum, rising about 0.1% after both major indexes posted record closes. The tech-heavy Nasdaq Composite (^IXIC) added about 0.4% after initially opening in the red.
The question now is whether the US economy could slip into recession, with surprisingly weak data on consumer confidence adding to the concern. The debate is focused on whether the Federal Reserve has cut rates by a larger-than-usual 0.5% in response to a slowing economy, and whether further malaise means to expect another big cut.
Read more: What effect will the Fed's interest rate cut have on bank accounts, CDs, loans and credit cards?
On the data front, new home sales fell in August following a sharp rise in the previous month, as sky-high mortgage rates and high prices kept most buyers away.
However, according to MBA data released before the bell, mortgage applications have risen to the highest level since 2022. This increase is due to the demand by homeowners to refinance loans due to falling rates.
But the main focus is on the crucial second quarter GDP data on Thursday and the PCE index on Friday – an inflation index backed by the Fed.
The parade of Fed speakers will continue with Governor Adriana Kugler when she appears later on Wednesday, whose comments will also be scrutinized for insight into the size and pace of upcoming rate cuts.
Meanwhile, markets lost gains from China's massive stimulus package, as doubts grew over whether the measures would be able to revive its economy.
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