Stocks trade mixed, Nasdaq ekes out fresh record

Stocks traded sideways on Wednesday to hold near all-time highs, with investors looking ahead to a key Federal Reserve event later this week.

The S&P 500 ticked up. The index set record intraday and closing highs on Tuesday, with investors piling into stocks in the energy and consumer discretionary sectors that had lagged over the past month. The Nasdaq edged up to a fresh record intraday high.

Stocks have marched higher amid optimism over continued strength in corporate profits and economic activity, even as growth rates on both these fronts look poised to slow after an initial reopening surge. Retailer Best Buy (BBY) posted second-quarter results that exceeded consensus estimates earlier this week, and the company also boosted its full-year sales guidance in a move that reaffirm that heightened consumer spending on electronics was continuing into the second half of the year. Later Wednesday, companies including Salesforce (CRM) and Ulta (ULTA) are poised to report results.

More movement on legislation that would increase government spending on physical and human infrastructure added to investor sentiment. Late Tuesday, the House of Representatives voted to move forward with a $3.5 trillion budget plan, laying the groundwork for a major economic package that would address issues including health care, child care and climate change. As part of the legislative action, the House also set up a final vote on the $1.2 trillion infrastructure bill passed in the Senate earlier this month.

This week’s trading has also seen a resurgence in “meme stocks,” or shares that have been popularized on social media platforms including Reddit. GameStop (GME) shares extended advances the pre-market session after gaining 28% on Tuesday for their best day since March. AMC Entertainment (AMC) and BlackBerry (BB) also advanced.

U.S. equities are also hovering near all-time highs ahead of the Federal Reserve’s virtual Jackson Hole Symposium, which kicks off on Thursday. After last week’s July Federal Open Market Committee meeting minutes came off as more hawkish than many market participants were expecting, more clues on the path forward for monetary policy remain a key focal point. Namely, traders are looking to see whether central bank officials signal when they will announce and implement tapering of their crisis-era asset purchase program.

“What the market really wants to hear is … that the Fed is willing to adjust if in fact the Delta variant does have a negative impact on the economy going forward,” Kristina Hooper, Invesco chief global market strategist, told Yahoo Finance. “And so that is going to be the key message — that willingness to be flexible depending upon what happens to the U.S. economy, that it is not full speed ahead adhering to a taper timeline.”

Other strategists also suggested that a “wait and see” approach from the Fed would be the most welcome outcome from equity investors.

“While we’ve seen the progress on the labor market that I think the Fed wanted to see … we’re obviously experiencing this temporary setback in terms of growth momentum,” Aneta Markowska, Jefferies chief financial economist, told Yahoo Finance. “It makes it difficult for the Fed to signal anything and to commit to any taper timeline at this point, but I think they do have to acknowledge that we have made further progress on those goals.”

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9:30 a.m. ET: Stocks open slightly higher

Here’s where markets were trading Wednesday morning:

S&P 500 (^GSPC): +4.65 (+0.1%) to 4,490.89
Dow (^DJI): +2.98 (+0.01%) to 35,369.24
Nasdaq (^IXIC): +13.50 (+0.09%) to 15,028.79
Crude (CL=F): +$0.21 (+0.31%) to $67.75 a barrel
Gold (GC=F): -$11.40 (-0.63%) to $1,797.10 per ounce
10-year Treasury (^TNX): +0.7 bps to yield 1.297%

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9:06 a.m. ET: Durable goods orders declined less than expected in July

Orders for U.S. manufactured held up more solidly than economists were expecting in July, pointed to sustained growth in the goods-producing sector.

Durable goods orders dipped by 0.1% in July, according to the Commerce Department’s preliminary monthly report. This followed a 0.8% in rise in June.

A drop in new orders for transportation equipment dragged down the overall index. Excluding transportation, durable goods orders increased by 0.7%, or faster than the 0.5% rise expected.

Non-defense capital goods orders, excluding aircraft, were flat on the month after a 1.0% rise in June. This metric serves as a closely watched measure of business investment plans. Shipments of these orders, which factors into GDP, increased by a better-than-expected 1.0%, however.

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7:27 a.m. ET: Mortgage applications rebounded last week as rates dipped

Mortgage applications rose last week to recover after a drop during the prior period, data from the Mortgage Bankers Association (MBA) showed Wednesday.

Overall applications were up 1.6% during the week ended August 20, following a drop of 3.9% during the previous week. Home purchases led the advances, with these rising 3% week-on-week on a seasonally adjusted basis to reach the highest level since early July. Still, however, purchases were 16% lower compared to the same week last year, on an unadjusted basis. Refinances increased 1% compared to last week, and 3% versus last year.

“Treasury yields fell last week, as investors continue to anxiously monitor if the rise in COVID-19 cases in several states starts to dampen economic activity. Mortgage rates slightly declined as a result, with the 30-year fixed rate decreasing for the first time in three weeks,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a press statement. “Lower rates led to an increase in refinance applications, with government loan applications jumping 10% to the highest level since May 2021.”

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7:20 a.m. ET Wednesday: Stock futures drift sideways ahead of Jackson Hole

Here’s where markets were trading Wednesday morning:

S&P 500 futures (ES=F): +0.75 points (+0.02%) at 4,483.25
Dow futures (YM=F): +14.00 points (+0.04%) to 35,328.00
Nasdaq futures (NQ=F): -2.0 points (-0.01%) to 15,353.50
Crude (CL=F): +$0.20 (+0.3%) to $67.74 a barrel
Gold (GC=F): -$14.00 (-0.77%) to $1,794.50 per ounce
10-year Treasury (^TNX): +1.9 bps to yield 1.309%

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6:07 p.m. ET Tuesday: Stock futures hover near record highs

Here’s where markets were trading Tuesday evening:

S&P 500 futures (ES=F): +1.25 points (+0.03%) at 4,483.75
Dow futures (YM=F): +16.00 points (+0.05%) to 35,330.00
Nasdaq futures (NQ=F): +4.5 points (+0.03%) to 15,360.00

NEW YORK, NY - AUGUST 16: Wall St. and Broad St. signs are seen by the New York Stock Exchange (NYSE) building in the financial district of New York City, United States on August 16, 2021. (Photo by Tayfun Coskun/Anadolu Agency via Getty Images) — NEW YORK, NY – AUGUST 16: Wall St. and Broad St. signs are seen by the New York Stock Exchange (NYSE) building in the financial district of New York City, United States on August 16, 2021. (Photo by Tayfun Coskun/Anadolu Agency via Getty Images)

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck