U.S. stocks edged higher Wednesday, helped by Treasury yields falling to their lowest levels in two months.
Yields fall after Fed minutes
The minutes from the Fed’s November gathering were released on Tuesday, and showed officials agreed to take a cautious approach to raising U.S. interest rates going forward.
Although the Fed officials also indicated they would only raise interest rates if progress in controlling inflation faltered, this guarded approach weighed on enthusiasm about when rate cuts will arrive.
This resulted in the yield on the 10-year Treasury declining by more than 2 basis points to 4.39%, while the yield on the benchmark 30-year Treasury fell by nearly 4 basis points to 4.54%, its lowest point since Sept. 22.
Thursday’s Thanksgiving holiday meant that the weekly jobless claims data was brought forward a day, with 209.000 claimants reported, below the 225,000 expected.
On the flip side, orders for long-lasting U.S. manufactured goods fell more than expected in October.
Nvidia warns about weakening Chinese sales
The big news in the corporate world was the release of the latest quarterly earnings from artificial intelligence chip leader Nvidia (NASDAQ:NVDA) after the close Tuesday.
The tech giant continued to reap the benefits from a boom in demand for AI-powered products, beating forecasts on both the top and bottom lines.
However, the company also warned that sales in its key Chinese market would “decline significantly” in its current quarter due to last month’s move by the Biden administration to extend the scope of its sanctions on exports of cutting-edge AI chips to the country. This resulted in its share price dropping 0.2% at the open.
Elsewhere, Sam Altman is set to return to the helm of OpenAI just days after he was sacked as chief executive of the big-name generative artificial intelligence group.
The day’s major earnings release comes from Deere & Company (NYSE:DE), with the world’s largest farm equipment maker’s stock falling 6% after it forecasted 2024 profit below expectations as high borrowing costs and squeezed budgets dented demand for farm equipment.
Oil falls on sharp U.S. inventories build
Oil prices slumped Wednesday after a group of top producers postponed a scheduled meeting, creating uncertainty over future production levels.
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, were set to meet on Nov. 26, amid reports that Saudi Arabia and Russia – two major producers in the group – were considering deeper supply cuts to support oil prices.
Adding to the woes was industry data from the American Petroleum Institute pointing to a substantial build in U.S. inventories of over 9 million barrels in the week to Nov. 17.
If confirmed by official data later in the session, this would be the fourth straight week of builds for U.S. inventories, indicating that oil supplies remained robust.
(Oliver Gray contributed to this item.)