Stock Market Rallies as Fed Holds Interest Rates
The S&P 500 jumped 1.6% on Wednesday, July 31, 2024, as the Federal Reserve announced its widely expected decision to hold interest rates at their current levels. This decision comes as the Fed recognizes recent declines in inflation and cooling in the labor market, further fueling expectations for a rate cut in September.
Vistra Corp. Soars on License Extension
Shares of Vistra Corp. (VST) saw a significant surge of 14.8% after the power generation firm announced that the Nuclear Regulatory Commission has approved an extension of its license to operate the Comanche Peak Nuclear Power Plant in Texas. This extension allows Vistra to continue operating the 2,400-megawatt plant through 2053. Additionally, PJM, the largest U.S. electrical grid operator, announced an 800% year-over-year price increase in its annual power market auction, providing further support for Vistra’s stock.
Tech Stocks Rebound
The tech sector experienced a resurgence, with the Nasdaq jumping 2.6% on Wednesday. Match Group (MTCH), the operator of Tinder and other online dating platforms, saw its shares rise by 13.2% after surpassing sales estimates in its second-quarter results. Revenue from Hinge, the company’s dating app, played a significant role in driving this strong performance. Semiconductor stocks also rebounded following a robust earnings report from chipmaker Advanced Micro Devices (AMD), which beat second-quarter sales estimates. Nvidia (NVDA) and Broadcom (AVGO) stocks also experienced gains.
Humana Faces Profit Restraints
Humana (HUM) shares tumbled by 10.6% after the health insurer provided disappointing full-year earnings guidance. While the company beat second-quarter sales and profit estimates, elevated levels of inpatient hospital admissions and net costs weighed down the results. Humana expects these challenges to continue for the remainder of the year.
Verisk Analytics and Bunge Global Experience Declines
Verisk Analytics (VRSK) saw its shares slip by 8.5% after releasing a mixed second-quarter earnings report. While the company beat profit forecasts, it fell short of revenue expectations, and its full-year sales guidance also came in below consensus forecasts. Bunge Global (BG), the world’s largest oilseed processor, experienced an 8.1% decline in its stock after posting lower-than-expected profits for the second quarter. Lower crushing margins and low crop prices contributed to this lackluster performance.
Overall, the stock market rallied on the final day of July, driven by the Federal Reserve’s decision to hold interest rates and the positive performance of various companies. While some stocks soared, others faced challenges that impacted their profitability. Investors will continue to monitor these developments as they navigate the ever-changing stock market.
