NEW YORK, NEW YORK – OCTOBER 16: Traders and others work on the New York Stock Exchange (NYSE) floor in New York City.
U.S. stock futures hovered near the flatline Wednesday evening after the Dow Jones Industrial Average closed at a record for the second time this week.
Dow futures lost 38 points, or 0.09%. Futures tied to the S&P 500 and Nasdaq 100 futures fell around 0.1% each.
Aluminum producer Alcoa jumped nearly 6% in extended trading after posting adjusted earnings that topped expectations. Transport stock CSX fell almost 4% on disappointing results.
During regular trading Wednesday, the blue-chip Dow advanced 0.79%. The S&P 500 rose 0.47%, while the tech-heavy Nasdaq Composite added 0.28%.
Get top local stories in Philly delivered to you every morning. Sign up for NBC Philadelphia's News Headlines newsletter.
Earnings results from companies that have reported in the week, notably financials, indicate a "Goldilocks type of atmosphere, with resilient growth, fading inflationary pressures [and] a normalization of the economy," Adam Crisafulli, Vital Knowledge founder, said Wednesday on CNBC's "Closing Bell: Overtime."
"That, more than anything, has really helped put a bid underneath the market. It's helped catalyze a lot of these cyclical value groups, and we're seeing tech take a back step a little bit the last few days because of it," he said.
Indeed, the financials sector rose 1.2% on Wednesday, seeing a boost from Morgan Stanley. The bank rose 6.5% after topping estimates for third-quarter profit and revenue.
Money Report
Corporate earnings are set to continue with insurance company Travelers, alternative asset manager Blackstone and health insurer Elevance Health slated to report Thursday morning. Regional banks KeyCorp, M&T Bank and Truist Financial are also on deck.
On the economic front, traders will be looking toward weekly jobless claims and September's retail sales due on Thursday. Industrial and manufacturing production data are also due.
Small-cap benchmark closes at highest level since 2021
The Russell 2000 outperformed on Wednesday, notching its highest closing level in nearly three years.
The small-cap benchmark added 1.64%, posting its fourth straight winning session and its highest close since November 2021.
These smaller names are expected to put on a strong showing as the Federal Reserve lowers interest rates. These companies, which are sensitive to economic cycles, tend to rely on financing, and lower rates would reduce their borrowing costs.
"With the growth outlook recently improving – underpinned by better-than-feared labor market conditions – and increased visibility into Fed rate cuts, the [Russell 2000] has rallied off the lower end of its rising price channel," said LPL Financial chief technical strategist Adam Turnquist in a note.
The rally among banking names has also boosted the small-cap benchmark, as it's the Russell 2000's largest sector by weighting, he said.
–Darla Mercado, Chris Hayes
Weak back-to-school spending may be a warning sign for holiday shopping
If back-to-school spending sets the tone for the holiday shopping season, there's good reason to be cautious, according to Barclays. The firm's latest look at the U.S. consumer noted the deep divides between households with incomes of $100,000 or less and wealthier cohorts as well as steep discounting. While the firm said spending remains healthy, demand has been choppy.
Lower income consumers remain pressured as wages have not kept up with inflation, the firm said. Meanwhile, higher income households may be feeling a "wealth effect" from rising investment portfolios and inflated home values.
"Retailers that are clean on inventory and able to maintain store traffic should do fine, but we expect downside from those that are not," Hale Holden, wrote in a research note. "In many ways this strikes us a return to 2018 or 2019 base trends."
Barclays retail analyst Adrienne Yih picked Foot Locker, VF Corp and Victoria's Secret as three stocks that will benefit as their margins recover late in the cycle over the next two to four quarters. All three stocks have vastly underperformed the market, with Foot Locker shares down cratering 20% year to date.
Victoria's Secret's stock jumped 6.6% Wednesday after its iconic fashion show returned.
—Christina Cheddar Berk
Stocks making the biggest moves after hours
Check out the companies making headlines in extended trading:
Discover Financial — Shares inched lower by 1%. The financial services company posted third-quarter results that surpassed expectations, with earnings of $3.69 per share on $4.45 billion of revenue. Analysts polled by LSEG were calling for earnings of $3.42 per share and revenue of $4.35 billion.
CSX — The rail transportation company lost 4% after third-quarter results fell short of Wall Street's forecasts. CSX reported earnings of 46 cents per share on revenue of $3.62 billion, while analysts polled by LSEG anticipated 48 cents per share in earnings and revenue of $3.67 billion. Overall volumes were up 3% from the year-ago period, but revenue per unit was down about 1%.
Lucid Group — The electric vehicle maker slid 10% after announcing a public offering of more than 262 million shares. Lucid also said Ayar Third Investment Company, an affiliate of the Public Investment Fund, indicated it would buy more than 374 million shares.
The full list can be found here.
— Hakyung Kim
Stock futures are flat Wednesday
U.S. stock futures opened little changed on Wednesday.
Dow Jones Industrial Average futures were marginally lower. S&P 500 futures and Nasdaq 100 futures inched down 0.05% and 0.08%, respectively.
— Hakyung Kim
