Stock market today: Live updates

Federal Reserve policymakers may soon start emphazising the “maximum employment” piece of the central bank’s dual mandate, which targets the pomotion of jobs and stable prices under the 1977 amendment to the Federal Reserve Act, according to Bank of America economist Michael Gapen in a note out Wednesday.

With recent signs that the labor market is softening, that’s likely to result in lower interest rates, currently 5.25%-5.50%, in late 2024 and possibly sooner, Gapen wrote. Under BoA’s reading of the tea leaves, “The Fed will be reducing its policy rate before year end. We think that happens in December, though a combination of soft data or further progress on inflation could bring earlier cuts.”

“Elevated inflation is not the only risk,” to the economy, Gapen wrote. “We draw this conclusion based on a few observations. First, in Powell’s written remarks to the Senate Banking Committee [Tuesday] he said, ‘elevated inflation is not the only risk we face.’ He noted this ‘in light of the progress made both in lowering inflation and in cooling the labor market over the past two years.’ The Fed sees more two-sided risks to the outlook as opposed to upside risks on inflation. This is no longer an overheating economy,” Gapen’s note read.

“Second, Powell was clear in saying ‘this is no longer an overheating economy.’ In prior months Powell had often referred to positive supply forces as lifting growth in economic activity and fueling employment without generating overheating effects. But he normally balanced these remarks by pointing to upside risk to inflation from a tight labor market that was only gradually coming into better balance. Now the view is that these overheating risks are largely behind us,” BoA added.

— Scott Schnipper

The iShares MSCI Japan ETF (EWJ) is up more than 1% in morning trading and is on pace for a fifth positive day in six. The fund is also on track for its third-straight weekly gain.

Japan has been a popular play for investors this year, with ETFs that focus on the country pulling in about $4 billion so far in 2024, according to FactSet. The BlackRock Investment Institute said in its mid-year outlook that being overweight on Japanese stocks was one of its highest conviction calls.

— Jesse Pound, Gina Francolla

In testimony on Capitol Hill, Fed Chair Powell downplayed the idea that “greedflation” or price gouging was a major factor in the post-pandemic inflation.

“We look at as this inflation has been caused by a combination of very strong demand and constrained supply,” Powell said, pointing to supply issues with automobiles as an example.

“It’s been very hard to track a connection with earnings and things,” Powell added.

— Jesse Pound

Federal Reserve Chair Jerome Powell has started his testimony in the U.S. House Financial Services Committee.

Wednesday’s remarks come after Powell told a Senate committee Tuesday that waiting too long to lower interest rates could hurt the economy. The central bank chief did not indicate a timeline for the first cut.

Watch a live stream of Powell’s testimony here.

— Jesse Pound

Carvana shares were up more than 6% on Wednesday after Needham upgraded the online car seller to buy from hold. That put the stock on track for its fifth positive session in six.

“We think CVNA can grow unit sales and industry share by leveraging its digital-first customer experience and under-utilized physical footprint,” analyst Chris Pierce wrote. “After a volatile past we see CVNA becoming a profitable secular growth story, with increasing retail unit sales and improving gross profit per unit metrics from leveraging a high-fixed-cost base.”

“We think the consensus retail unit estimate has troughed, and does not yet anticipate the approaching recovery, upside from management’s explicit pivot to unit growth and optimizations at acquired CVNA IRCs and Adesa locations, or the benefits of a stabilized balance sheet,” the analyst added.

The S&P 500 opened higher on Wednesday, and was advanced for the seventh straight session.

The broad market index climbed 0.2% while the Nasdaq Composite also earned its own record after a 0.4% gain. The Dow Jones Industrial Average hovered near the flatline.

— Brian Evans

Check out the companies making headlines before the bell.

• Tesla — The electric vehicle maker gained nearly 1% after Goldman Sachs increased its stock price target by $73 to $248 per share on better than expected second quarter deliveries. Tesla has booked 10-straight days of gains. Though Goldman increased its price target, the investment bank remains neutral on Tesla, with the new price target implying about 5% downside from Tuesday’s close of $262.33.
• Taiwan Semiconductor Manufacturing — Shares of the company, which makes semiconductor chips for AI giants including Nvidia and Apple, added 2%. Taiwan Semiconductor reported revenue from April-June this year of T$673.51 billion, as compared to the T$654.27 billion expected by analysts polled by LSEG, according to Reuters.
• 3M Company — Shares declined 1.2% after 3M announced its finance chief Monish Patolawala is leaving the company “to pursue another opportunity.” The change is effective July 31.

Read the full list here.

— Sarah Min

Shares of Taiwan Semiconductor were up 2% on Wednesday morning after the company reported a recent earnings beat.

Taiwan Semiconductor reported revenue from April-June this year of T$673.51 billion ($20.67 billion), as compared to the T$654.27 billion expected by analysts polled by LSEG, according to Reuters. The company posted revenue of NT$207.87 billion in June 2024 alone, representing a 32.9% increase from this time last year.

Taiwan Semiconductor makes semiconductor chips for AI giants including Nvidia and Apple.

— Lisa Kailai Han

Shares of European automaker Volkswagen ticked down Wednesday after the firm provided a warning on profits moving forward over slow electric vehicle demand. The company is also considering closing a plant in Brussels.

Volkswagen revised outlook now calls for operating return on sales in the range of 6.5% to 7%, down from a previous forecast of 7% to 7.5%.

European listed shares of Volkswagen ticked down roughly 1%.

— Brian Evans

Shares of LegalZoom.com fell more than 23% after the company cut its full-year revenue guidance.

It now sees revenue coming in a range of $675 million to $685 million. The company had issued guidance of $700 million to $720 million. LegalZoom.com also announced CEO Dan Wernikoff resigned from his post, effective immediately.

The electric vehicle maker posted a 3.7% gain on Tuesday, marking a 10th straight positive session for Tesla.

Since its last down day – June 24 – the stock has advanced roughly 43%. In the past month, the stock is up nearly 48%.

Even with the sharp run higher, shares are up a modest 5.6% in 2024, and they’re still off more than 4% in the past year.

This latest climb for Tesla was aided by the car manufacturer’s second-quarter production and deliveries report, posted just last week. Deliveries for the period came in at 443,956, compared to the 439,000 anticipated by analysts, per StreetAccount.

–Darla Mercado, Jason Gewirtz