The S&P 500 posted a modest gain on Wednesday as traders assessed the potential for future Federal Reserve rate cuts amid persistent inflationary pressures.

The broad market index added 0.16%, closing at 5,918.25, while the Nasdaq Composite slipped 0.06% to 19,478.88. The Dow Jones Industrial Average outperformed, rising 106.84 points, or 0.25%, to end at 42,635.20. The three major averages are on pace for a second straight weekly loss.

Minutes released from the Fed's December meeting reflected that nearly all committee participants found that upside risks to the inflation outlook had increased, adding to investors' concerns that there may be fewer rate cuts than expected this year.

"In discussing the outlook for monetary policy, participants indicated that the Committee was at or near the point at which it would be appropriate to slow the pace of policy easing," the minutes read.

Bond yields, which have been climbing on bets that President-elect Donald Trump's tariff and tax plans could lead to a spike in inflation, wavered throughout Wednesday's trading session. The rate on the benchmark 10-year Treasury note at one point topped 4.7%, nearing levels last seen in late April.

After digesting a slew of economic data this week, investors are now awaiting Friday's December payrolls report. 

"Forecasters find it increasingly difficult to model out the path for interest rates, growth, and inflation because of the uncertainty surrounding Trump policies still being developed," Jeffrey Roach, chief economist for LPL Financial, said. "Markets could get choppy if there is a surprise in Friday's payroll release."

Palantir — one of the biggest gainers in the S&P 500 in 2024, rising more than 340% — was down for a third straight day, losing 2.5%. Chipmaker Advanced Micro Devices shed 4.3% after a downgrade by HSBC.

S&P 500 posts tiny gain on Wednesday

Stocks wavered throughout most of the day, with the S&P 500 registering a small advance.

The broad market index added 0.16% to close at 5,918.25. The Nasdaq Composite shed 0.06% to end at 19,478.88. The Dow Jones Industrial Average gained 106.84 points, or 0.25%, to close at 42,635.20.

— Pia Singh

TD Cowen says Coca-Cola's recent pullback is an 'overreaction'

The recent pullback in shares of Coca-Cola has presented an attractive buying opportunity, according to TD Cowen.

Shares rose about 1.1% on Wednesday after analyst Robert Moskow upgraded the stock and reiterated his $75 price target, suggesting more than 20% upside ahead. According to Moskow, Coca-Cola has room to capitalize on the growth of per capita beverage consumption in international markets over the long term.

"KO continues to execute at the top of its game through successful refranchising internationally and outstanding execution domestically," Moskow said in a note to clients Wednesday. "We view the stock's recent pullback as an overreaction."

The beverage giant's stock has lost about 12% in the last three months.

— Michelle Fox

Concentration is a 'key risk' to start 2025, Barclays says

Concentration is a key risk to start 2025, with much of the market's gains dependent on the performance of a handful of mega-cap tech companies, Venu Krishna, head of U.S. equity strategy at Barclays, wrote on Wednesday.

"The percentage of SPX constituents beating the index rose to the highest level in over a year by October, but fell sharply over the final 2 months of 2024," Krishna wrote. "Our US broadening basket weakened over the same period."

"Big Tech is now 29.3% of the S&P 500 by weight and accounted for half of the index's gains last year, down slightly from 2023's 56%," he added.

Wall Street is coming off a rough session Tuesday, in part due to the sharp drop in Big Tech stocks.

— Sarah Min

Quantum computing stocks plunge after Nvidia's Huang says technology is decades away

Quantum computing stocks tanked after Nvidia CEO Jensen Huang said Tuesday during the company's analyst day that quantum computers are years away.

"If you said 15 years for very useful quantum computers, that would probably be on the early side," he said. "If you said 30, it's probably on the late side. But if you picked 20, I think a whole bunch of us would believe it."

Rigetti Computing tanked 47%, while IonQ shed 44%. D-Wave Quantum dropped more than 44%, while the Defiance Quantum & AI ETF fell 5%. Quantum Computing sank 47%.

— Samantha Subin

Fed minutes show officials worried about inflation impact from Trump policies

A summary of the Fed's December meeting showed central bank officials were concerned about how policies from the incoming Trump administration could impact inflation.

"Almost all participants judged that upside risks to the inflation outlook had increased," the minutes said. "In discussing the outlook for monetary policy, participants indicated that the Committee was at or near the point at which it would be appropriate to slow the pace of policy easing."

— Fred Imbert

Edison International slides amid Los Angeles wildfires

Shares of Edison International were down by more than 12.5%, as thousands flee the Los Angeles area due to wildfires destroying homes and infrastructure in the region. The decline put the California-based utility on track for its worst trading day since March 2020.

— Fred Imbert

Constellation tumbles as company reportedly nears $30 billion acquisition of Calpine

Constellation Energy shares tumbled more than 5% in Wednesday afternoon trading on a report that the power company is nearing a deal to acquire Calpine Corp.

Constellation is in discussions with Calpine's private equity owners about a deal that would value the company at $30 billion including debt, people familiar with the matter told Bloomberg News.

Constellation is the largest operator of nuclear plants in the U.S. Calpine is a private company that operates natural gas and geothermal plants.

Constellation has garnered significant attention from investors over the past year as a power company that is expected to play a key role in the data center boom.

Constellation, for example, announced last September that it plans to restart the Three Mile Island nuclear plant through a power purchase agreement with Microsoft.

— Spencer Kimball

EBay, Edison International among the names making moves midday

Check out the stocks making big moves in midday trading:

• eBay – Shares jumped 9.7% and touched 52-week highs after the company announced that Meta is testing using its listings on Facebook Marketplace. Buyers from Facebook will be redirected to eBay to complete transactions. The gain put the stock on track for its best day since late 2022.
• Edison International – The stock lost more than 10.5%, as thousands flee the Los Angeles area due to wildfires destroying homes and infrastructure in the region. The decline put the California-based utility on track for its worst trading day since March 2020.
• Getty Images – Shares of the image database plunged 21%, reversing course after soaring more than 24% in the previous session. On Tuesday, Getty announced a $3.7 billion merger with Shutterstock. Shutterstock shares tumbled about 12% on Wednesday after gaining 14.8% in the previous session.

Read the full list here.

— Sean Conlon

Fed's Waller sees additional rate cuts coming in 2025

Federal Reserve Governor Christopher Waller said Wednesday that he expects the central bank to lower interest rates further this year even though progress on inflation "appears to have stalled."

Speaking in Paris, Waller said he sees signs that inflation is easing and will continue to do so. He said that the stubbornness of recent readings had been driven primarily by "imputed" prices such as housing services, while "observed" prices for other goods and services show disinflation.

"This minimal further progress has led to calls to slow or stop reducing the policy rate. However, I believe that inflation will continue to make progress toward our 2% goal over the medium term and that further reductions will be appropriate," Waller said.

Waller added that if economic conditions go according to his view, "I will support continuing to cut our policy rate in 2025. The pace of those cuts will depend on how much progress we make on inflation, while keeping the labor market from weakening."

— Jeff Cox

EBay shares poised for best day since 2018 after company announces Facebook Marketplace pilot

EBay's stock headed for its best day in nearly seven years after the company announced that Meta is testing using the site's listings on Facebook Marketplace.

Shares of eBay jumped more than 10%, on track for its best day since February 2018. That rally also pushed shares to highs not seen since 2021.

Select eBay listings will appear on Facebook Marketplace in the U.S., Germany and France as part of a pilot launching this week. Buyers from Facebook will be redirected to eBay to complete their transaction.

— Alex Harring

Evercore upgrades Allstate, sees more than 20% upside

Insurance stock Allstate is trading at a discount and should be a big winner in 2025, according to Evercore ISI.

Analyst David Motemaden upgraded Allstate to outperform from in line, saying in a note to clients that the insurer should be able to grow its policies in force in the coming months.

"We increase our ests for PIF growth after reviewing the competitive environment & further acceleration in ALL website visits in 4Q24 which makes us believe ALL can grow," the note said.

Shares of Allstate are up 24.5% over the past year, roughly in line with the S&P 500. Still, the stock seems cheap based on its price-to-earnings ratio, based on projections for the next 12 months, Motemaden wrote.

"We believe the risk reward is skewed to the upside as at <10x NTM P/E ALL trades at a discount to the 12-13x it traded at back in '13-15 when it grew PIF and had a worse mix of business," the note said.

Evercore raised its price target on Allstate to $226 per share from $209. The new target represents upside of about 21%.

— Jesse Pound

Major averages begin the day little changed

Stocks opened Wednesday little changed. The S&P 500, Dow Jones Industrial Average and tech-heavy Nasdaq Composite each opened down about 0.1%.

— Pia Singh

Jobless claims total less than expected

Initial filings for unemployment benefits fell last week, signaling that while the labor market may be softening, employers are not cutting staff.

Claims totaled 201,000 for the period ending Jan. 4, down 10,000 from the prior period for the lowest total in nearly a year. Economists surveyed by Dow Jones had been looking for 215,000.

Continuing claims, which run a week behind, totaled 1.87 million, an increase of 33,000 from the week before.

—Jeff Cox

Stocks making the biggest moves before the bell: SolarEdge, Novo Nordisk and more

These are the stocks moving the most in premarket trading:

• SolarEdge Technologies — The solar stock dropped 6%. Citi downgraded SolarEdge to sell from neutral, saying the company faces "stubbornly high" operating expenses despite its restructuring announcement.
• Novo Nordisk — The pharmaceutical giant rose more than 3% following an upgrade to buy from neutral at UBS.
• Maplebear — Shares of the parent of grocery delivery company Instacart popped nearly 5%. Maplebear is set to replace Enovis in the S&P MidCap 400 index, effective before trading commences on Tuesday, Jan. 14.

Read the full list of stocks moving here.

— Lisa Kailai Han

ADP: Private sector companies added 122,000 jobs in December, fewer than expected

Private sector companies added fewer jobs than expected during the month of December, while wages grew at the slowest pace in nearly 3½ years, payment processing firm ADP reported Wednesday.

Companies added a seasonally adjusted 122,000 jobs for the month, down from 146,000 additions in November and less than the Dow Jones consensus forecast for 136,000. It marked the smallest increase since August.

"The labor market downshifted to a more modest pace of growth in the final month of 2024, with a slowdown in both hiring and pay gains," ADP chief economist Nela Richardson said.

For more on the ADP data, read here.

— Pia Singh, Jeff Cox

Stock futures struggle after report says Trump might declare national economic emergency to impose tariffs

Stock futures took a leg down Wednesday morning after CNN reported President-elect Donald Trump is considering declaring a national economic emergency to implement wide-reaching tariff plans.

This type of declaration would give Trump the ability to create the tariff program he's pushed for through the International Economic Emergency Powers Act, CNN reported, citing sources familiar with the situation. Known as IEEPA, the act allows the president to manage imports in a period of national emergency.

Trump's team has not yet decided on whether to call an economic emergency and is also considering other legal options for creating his tariff plan, CNN reported.

— Alex Harring

10-year Treasury yield near April high

Treasury yields were little changed on Wednesday, but the benchmark 10-year note rate remained near levels not seen since April.

The 10-year traded 4.681% on the day. On Tuesday, it reached a high of 4.699% after the release of U.S. services data pointed to stickier inflation.

— Fred Imbert

See the stocks making moves after the bell

Some stocks are making big moves in extended trading:

• Cal-Maine Foods – Shares gained 4% after the egg production company posted its latest quarterly results. For its second quarter of fiscal 2025, Cal-Maine Foods earned $4.47 per share on revenue of $954.7 million, with the latter figure marking an 82% increase compared to the year-ago quarter. The results were not comparable to the Street's estimates due to thin coverage.
• AAR Corp – Shares of the aviation services provider advanced around 4% after the company's fiscal second-quarter results beat Wall Street's expectations. AAR Corp posted adjusted earnings of 90 cents per share on revenue of $686.1 million, more than the 85 cents per share and $654.2 million that analysts were expecting, according to FactSet.
• AZZ – The stock moved about 1% higher following the metal-coatings company's better-than-expected third-quarter results. AZZ posted adjusted earnings of $1.39 per share on revenue of $403.7 million. That's above the $1.26 per share and $394.3 million in revenue that analysts polled by FactSet had penciled in.

Read here for the full list.

— Sean Conlon

Stock futures open little changed

U.S. stock futures were relatively unchanged on Tuesday night.

S&P 500 futures and Nasdaq 100 futures hovered around the flatline just after 6 p.m. ET. Futures tied to the Dow Jones Industrial Average were also flat.

— Sean Conlon