Stock market today: Dow jumps 450 points as S&P 500, Nasdaq log back-to-back records on surging Fed rate cut bets

Wall Street rallied Wednesday, with the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) locking in a second straight day of record closes as traders all but priced in a Federal Reserve rate cut at its next meeting after fresh inflation figures.

The Dow Jones Industrial Average (^DJI) led the charge, climbing over 450 points, or above 1%, to close back near record territory. And while the S&P 500 and Nasdaq pared earlier gains, they still ended the day up about 0.3% and 0.1%, respectively, extending their record-breaking run.

Paramount Skydance Corporation PSKY (PSKY) surged as much as 60% on Wednesday as traders piled into the newly merged media powerhouse — less than a week after the two companies officially tied the knot.

In the few days since its merger, CEO David Ellison has wasted no time capturing investor attention, most notably by striking a seven-year, $7.7 billion deal to make Paramount Skydance the exclusive US home for all UFC events.

The deal, announced on Monday, marks a major payday for TKO Group Holdings (TKO), the UFC’s parent company, far surpassing its previous agreement with Disney’s (DIS) ESPN, which was worth roughly $550 million annually.

“With lower leverage following the Paramount/Skydance transactions and Ellison-backed $1.5B primary issuance, PSKY is immediately making use of the improved balance sheet,” Ric Prentiss, analyst at Raymond James, wrote in reaction to the report.

“This deal is a significant move in and of itself for Paramount+, as the consistent live event schedule should help the service drive greater scale of subscribers and less churn, albeit coming with very substantial annual cost,” the analyst added.

Apple (AAPL) shares spiked to session highs on Wednesday after Bloomberg reported the company is planning its artificial intelligence comeback, anchored by an ambitious lineup of new products that include household robots, a lifelike Siri, a smart speaker with a display, and home-security cameras.

The stock later pared gains, trading about 1% higher in the late afternoon.

Apple’s AI ambitions have stumbled this year, with shares down about 7% even as most of its “Magnificent Seven” peers, aside from Tesla (TSLA), have surged. Analysts cite the company’s lack of a clear AI strategy as the biggest disappointment.

Ahead of Wednesday’s report, Apple CEO Tim Cook hinted at the upcoming devices in an all-hands meeting earlier this month, telling employees, “The product pipeline — which I can’t talk about — it’s amazing, guys. It’s amazing,” he said. “Some of it you’ll see soon. Some of it will come later. But there’s a lot to see.”

Oil prices slipped on Wednesday as investors perceived the risk of an industry glut.Oil prices slipped on Wednesday as investors perceived the risk of an industry glut.

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The Trump administration is broadening its search for the next Federal Reserve chair, with reports suggesting as many as 11 candidates may be in the running to replace Jerome Powell when his term expires in May, Yahoo Finance’s Jennifer Schonberger reports.

Schonberger writes:

Read the full story here.

CoreWeave (CRWV) stock plummeted 18% Wednesday after the AI data center company reported a disappointing quarterly outlook for its operating income.

The company said the previous day that it expects its third quarter operating income to fall between $160 million and $190 million, below the $192 million expected by Wall Street analysts tracked by Bloomberg. At the same time, the company expects interest expense of $350 million to $390 million during that period.

DA Davidson analyst Gil Luria told Yahoo Finance in an email Wednesday that “deteriorating operating income guidance highlights the main issue for CoreWeave – their interest expense is higher than their operating income which means they aren’t generating enough profit to pay their debt holders.”

CoreWeave is one of the largest holders of Nvidia’s (NVDA) AI chips and rents its data center capacity to Big Tech firms such as Microsoft (MSFT), Meta (META), and Google (GOOG) as they scramble to power their AI ambitions. CoreWeave stock’s performance is closely watched as a metric of AI demand.

Grocery stocks are under pressure, including Instacart (CART), Kroger (KR), Albertsons (ACI), and Sprouts Farmers Market (SFM), after Amazon (AMZN) announced same-day delivery for groceries.

On Wednesday, the e-commerce giant said it would start offering same-day perishable grocery delivery in over 1,000 cities. Amazon plans to reach over 2,300 areas across the US by the end of 2025.

The service is available for Prime members for free, only on orders over $25. It will cost $12.99 without the membership.

In comparison, Instacart has additional service fees but a lower threshold of $10 or more per delivery order.

Amazon stock is roughly flat, compared to the nearly 11% decline in Instacart shares and roughly 4% decline for Kroger, Albertsons, and Sprouts.

Cryptocurrency exchange operator Bullish (BLSH) is set to go public on Wednesday at a valuation north of $5 billion as the IPO market looks set to continue a strong summer.

Yahoo Finance’s Jake Conley reports:

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US stocks moved higher on Wednesday after the open as expectations for Fed interest rate cuts rose.

The tech-heavy Nasdaq Composite (^IXIC) and the Dow Jones Industrial Average (^DJI) rose more than 0.5%, while the benchmark S&P 500 (^GSPC) gained 0.4%.

Within the S&P 500, the Consumer Discretionary Sector (XLY) was up 0.7%, while the Technology Sector (XLK) climbed more than 0.6%.

The Nikkei 225, the primary index for the Tokyo Stock Exchange, is trading at all-time highs amid optimism that confusion over the recent US-Japan trade agreement is being addressed in addition to the renewed strength in Big Tech.

Domestically, Japan’s key auto industry is cautiously optimistic that the the positive will outweigh any drag coming from tariffs.

“The Nikkei was not able to hit a record until today because chip-related shares and auto shares dragged on the index,” Takamasa Ikeda, senior portfolio manager at GCI Asset Management, told Reuters.

Chinese stocks have risen in recent months, helped by strong domestic liquidity and despite a lack of major catalysts.

Bloomberg News reports:

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CoreWeave (CRWV) was teed up to let down investors last night.

And it did on several fronts.

First, the company’s net loss was much higher than consensus.

Second, capital expenditures were a whopping $1 billion higher sequentially. And third, capex may climb another $500 million in the current quarter.

While I appreciate the company’s revenue backlog of $30.1 billion doubled year over year, the company’s mixed results and high debt load are real causes for concern. Hence, the sharp pre-market pullback.

Here are two important call outs this morning from DA Davidson analyst Gil Luria:

Cava (CAVA) is getting run over premarket to the tune of 23%.

Bottom line on this one: When you are valued as a high-growth stock and you don’t deliver high growth, your stock will take a beating.

Same restaurant sales only rose 2.1%.

The company slashed its full-year same-restaurant sales guidance.

The earnings call wasn’t exactly alarming — the company appears to still be structurally sound.

But a slower economy and increased competition is weighing on the brand’s results. We heard the same exact tone at Chipotle (CMG) and Starbucks (SBUX) this earnings season.

The positive here: Cava is testing salmon for its menu. Who doesn’t like salmon in a $15+ salad bowl?!