Stock market today: S&P 500 hits fresh record as all eyes turn to Fed decision

Wall Street closed the trading session on a high note Tuesday, as investors braced for the results of a crucial Federal Reserve policy meeting.

The S&P 500 (^GSPC) rose close to 0.6%, beating back earlier losses to close at a fresh record high of 5,178.51. Meanwhile, the Dow Jones Industrial Average (^DJI) rose 0.8%, or more than 300 points. The tech-heavy Nasdaq Composite (^IXIC) increased almost 0.4% as Nvidia (NVDA) shares gained ground in the wake of AI updates from its annual developer conference. The gains capped a second-straight winning day for the major gauges.

Attention is firmly on the Fed's two-day meeting that began Tuesday morning, seen as a test for stocks bruised by recent inflation surprises that undermined bets on interest-rate cuts coming soon.

With policymakers widely expected to keep rates at their historic highs, the focus is on the "dot plot" for any clues to the number and timing of any cuts this year. The central bank's policy decision is due Wednesday at 2 p.m. ET.

Meanwhile, the Bank of Japan ended its era of negative rates with its first hike in 17 years, making a splash in a week packed with central bank decisions.

In cryptocurrencies, bitcoin (BTC-USD) continued to pull back from its recent record high, falling over 5% at one point. Shares of crypto-linked companies Coinbase (COIN) and Marathon Digital (MARA) lost ground alongside the token.

On the corporate front, shares of Unilever (UL) popped after the Ben & Jerry's maker said it would cut jobs and spin off its ice cream unit.

LIVE COVERAGE IS OVER12 updates

Stocks rise ahead of Fed decision

Tue, March 19, 2024 at 4:05 p.m. EDT, Hamza Shaban

Investors shed earlier losses and embraced optimism on Tuesday as Wall Street prepared for the Federal Reserve's next policy announcement scheduled for Wednesday afternoon.

The S&P 500 (^GSPC) rose close to 0.6%, beating back earlier losses, while the Dow Jones Industrial Average (^DJI) rose 0.8% or more than 300 points. The tech-heavy Nasdaq Composite (^IXIC) increased almost 0.4% as Nvidia (NVDA) shares gained ground after the company announced its new flagship AI processor is expected to ship later this year.

Microsoft hires DeepMind founder to lead new AI shift

Tue, March 19, 2024 at 3:15 p.m. EDT, Hamza Shaban

The race for AI market share is also playing out in the hiring of key experts.

Microsoft announced on Tuesday that DeepMind co-founder Mustafa Suleyman is joining the tech giant to form a new organization called Microsoft AI, focused on advancing Copilot and other consumer AI products and research. Several employees from Suleyman's AI startup Inflection are also heading over to Microsoft, as well as Karén Simonyan, co-founder and chief scientist.

Suleyman will serve as CEO of the new group, said Microsoft CEO Satya Nadella. In addition, the company's existing AI units will report to Suleyman, bringing the groups that run Copilot, Bing, and Edge, as well as Microsoft's GenAI team, into the same organization.

"These teams are at the vanguard of innovation at Microsoft, bringing a new entrant energy and ethos, to a changing consumer product landscape driven by the AI platform shift," Nadella said in a note to employees that was published on the company's blog.

The move comes as tech giants are scrambling to advance their AI efforts through new products, research efforts, and partnerships.

Microsoft's hiring announcement arrives amid reports that Apple (AAPL) is in talks with Alphabet's Google (GOOG, GOOGL) to potentially incorporate Google's "Gemini" generative AI engine into its iPhones. Apple had previously engaged in talks with OpenAI for a similar potential partnership.

In the note to staff, Nadella said the company's AI innovation continues to build on its "most strategic and important partnership with OpenAI."

The effort to ban TikTok faces potential 'graveyard' in Senate

Tue, March 19, 2024 at 2:30 p.m. EDT, Hamza Shaban

After a House vote to advance legislation that would force TikTok’s Chinese owner to sell the app or face a US ban, the Senate now stands as the next hurdle in Congress's fight against the platform.

But as Yahoo Finance's Ben Werschkul reports, the Senate often becomes a key stumbling block in Washington's efforts to confront Big Tech.

A possible ban of the popular social media app is atop the Senate’s agenda as lawmakers return to the nation's capital this week.

While bipartisan energy behind any effort to take on China could overwhelm efforts to slow the bill, there are also significant legal issues that senators may not be keen to overlook.

What's more, the Senate in past years has served as a flashing red light to other technology reforms that found bipartisan enthusiasm in the House, including data privacy efforts and a move to prohibit tech giants from favoring their own products.

More investors see the possibility of a 'no landing' scenario

Tue, March 19, 2024 at 1:48 p.m. EDT, Josh Schafer

While markets have scaled back projections for interest rate cuts this year— and could possibly price in even fewer cuts after the Federal Reserve provides its latest update on monetary policy Tuesday — investors still see the same ending to the Fed's rate hiking cycle.

In Bank of America's March Global Fund Manager Survey, 62% of respondents said the most likely outcome for the global economy is a "soft landing." Typically, this would mean inflation retreats to the long-term target range without an outright economic downturn.

Notably, the 62% projecting a soft landing is lowest level of conviction seen since October (the most recent bottom in US equity markets). But, as seen in the chart below, this isn't because more investors fear a "hard landing," which would bring recession.

Instead, an increasing amount of investors see the possibility for a "no landing" scenario, where the economy sees both above-trend economic growth and above-trend inflation.

This reflects the new growing consensus that any expectations for an economic downturn have gone by the wayside. This, stock market bulls have argued, is the key takeaway on the shifting economic story to start 2024.

"What really counts is this resilience that we're seeing in consumer and business and in terms of the jobs numbers," Oppenheimer chief investment strategist John Stoltzfus told Yahoo Finance Live.

Stocks trending in afternoon trading

Tue, March 19, 2024 at 1:15 p.m. EDT, Hamza Shaban

Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Tuesday:

Nordstrom (JWM): Shares of the retailer jumped more than 11% Tuesday after Reuters reported the company's founding family is seeking to take the US department store private, citing people familiar with the matter.

Advanced Micro Devices (AMD): The semiconductor company fell more than 5% in afternoon trading, joining other chip stocks that fell after AI leader Nvidia (NVDA) held its developers conference.

Unilever (UL): The consumer goods giant rose 2% to start the trading day after it announced plans to spin off its ice-\ cream business — which includes Ben & Jerry's, Magnum, and Klondike — and a restructuring plan that could impact 7,500 jobs as part of an effort to save more than $800 million over the next three years.

Super Micro Computer (SMCI): Shares of the server manufacturer sank 9% after it said it plans to sell 2 million shares. The company plans to use the roughly $2 billion in proceeds to support operations and boost manufacturing capacity. The stock offering comes as Super Micro's shares have skyrocketed this year, more than tripling on the demand for AI technology.

Stocks turn positive in afternoon trading

Tue, March 19, 2024 at 12:31 p.m. EDT, Hamza Shaban

Investors shifted directions Tuesday afternoon and sent all three major indexes into green territory as Wall Street braced for the Fed's press conference Wednesday and the next indication of where interest rate policy is headed.

The S&P 500 (^GSPC) rose 0.2%, beating back earlier losses, while the Dow Jones Industrial Average (^DJI) rose 0.6% or more than 200 points, coming off a winning day for the major gauges. The tech-heavy Nasdaq Composite (^IXIC) climbed just over the flatline after trading in the red earlier in the day.

Japan ends era of negative rates

Tue, March 19, 2024 at 11:45 a.m. EDT, Hamza Shaban

The world's last remaining negative interest wait is no more after the Bank of Japan, the final major holdout, put an end to an aggressive monetary stimulus program designed to pull the economy out of a slump.

Japan's central bank on Tuesday ended its negative policy rate of minus 0.1% and replaced it with a target range of 0.0-0.1%. The hike, the first in 17 years, marks an end of an era in which major central banks engaged in an unconventional experiment in the aftermath of the global financial crisis to fuel growth.

The long-held interest rate policy, along with other measures to inject money into the economy, “have fulfilled their roles,” said Bank of Japan Gov. Kazuo Ueda.

In contrast to the US Federal Reserve, which is expected to begin lowering rates this summer after years of fighting off historic levels of inflation, Japan's central bank has been wrestling with a different problem: the need for growth. Japan suppressed borrowing costs to encourage consumers and businesses to spend, giving the economy a much-needed boost. Inflation has exceeded the Bank of Japan's 2% target for more than a year.

Media reports earlier this week indicated the move was coming, muting the impact on the market Tuesday. Tokyo's benchmark Nikkei 225 index gained close to 0.7% on Tuesday while the dollar held at about 150 yen.

How the realtor settlement could hurt homebuyers

Tue, March 19, 2024 at 11:00 a.m. EDT, Hamza Shaban

The major realtor lawsuit settlement that may free home sellers from heavy commissions could have a negative impact on a group already beleaguered with higher interest rates and elevated home pricers.

Homebuyers, squeezed by lack of inventory, could soon be on the hook for paying agent commissions, reports Yahoo Finance's Rebecca Chen.

Under the longstanding system, homeowners looking to list their property are typically liable for both seller and buyer commissions. They sign a contract specifying the percentage of the commission split — traditionally each party takes 3%. But if the settlement is approved by a federal judge, the long-standing standard 6% commission would be eliminated and buyers would be responsible for their own agent compensation.

Under the new model buyers would have to come up with the money to pay their agent on top of shelling out a down payment, financing, and closing costs.

Experts also doubt that the settlement will push home prices downward since economic factors like supply and demand are what’s keeping homes expensive. And as Yahoo Finance's Myles Udland writes, the Fed's crude interest rate policy lever isn't designed to cope with housing affordability either.

Trending tickers in morning trading

Tue, March 19, 2024 at 10:15 a.m. EDT, Hamza Shaban

Here are some of the leaders of Yahoo Finance’s trending tickers page during morning trading on Tuesday:

Unilever (UL): The consumer goods giant rose 2% to start the trading day after it announced plans to spin off its ice cream business — which includes Ben & Jerry's, Magnum, and Klondike — and a restructuring plan that could impact 7,500 jobs as part of an effort to save more than $800 million over the next three years.

Bitcoin (BTC-USD): The dominant cryptocurrency is on track to suffer its biggest daily drop in two weeks as investors continue to flee from the token after it recently hit an-all time high. Bitcoin was changing hands at $63,000, a fall of about 7%.

Nvidia (NVDA): Fresh off its annual developers conference, the AI darling lost 3% after it unveiled its latest AI chip, which it said is up to 30 times speedier than its predecessor.

Super Micro Computer (SMCI): Shares of the server manufacturer sank 11% after it said it plans to sell 2 million shares. The company plans to use the roughly $2 billion in proceeds to support operations and boost manufacturing capacity. The stock offering comes as Super Micro's shares have skyrocketed this year, more than tripling on the demand for AI technology.

Stocks slide before Fed meeting

Tue, March 19, 2024 at 9:34 a.m. EDT, Hamza Shaban

Wall Street pulled back some as Federal Reserve officials began their two-day huddle to decide their next move on interest rate policy.

The S&P 500 (^GSPC) slid roughly 0.2%, while the Dow Jones Industrial Average (^DJI) rose above the flatline, coming off a win on Monday for the major indexes. The tech-heavy Nasdaq Composite (^IXIC) dropped about 0.5% as AI darling Nvidia (NVDA) retreated after sharing AI updates from its annual developer conference.

The bottom line on Nvidia

Tue, March 19, 2024 at 8:30 a.m. EDT, Brian Sozzi

Nvidia's (NVDA) stock didn't do too much on day one of its GTC conference despite an impressive array of new product introductions.

But that doesn't mean what the company unveiled was disappointing — quite the contrary! I actually think everything CEO Jensen Huang showed off is so complex, it could take a few days for investors to digest and assess if the stock warrants another push higher.

Wall Street was pleased with what they heard.

Here's what JPMorgan analyst Harlan Sur had to say:

"Overall, the team is further distancing itself with its aggressive cadence of new product launches and more product segmentation over time. With leading silicon (GPU/DPU/CPU), hardware/software platforms, and a strong ecosystem, Nvidia is well positioned to continue to benefit from major secular trends in AI, high-performance computing, gaming, and autonomous vehicles, in our view. Bottom line: NVIDIA continues to be 1-2 steps ahead of its competitors."

The AI stock bubble... or not

Tue, March 19, 2024 at 8:15 a.m. EDT, Brian Sozzi

As Nvidia's (NVDA) GTC conference continues out on the West Coast, it feels natural for BofA's new fund manager survey out today to weigh into the AI stock bubble debate.

The end result: Institutional investors have no clue if this is a bubble!

Investors can't decide whether AI stocks are in a bubble.