Stocks fall as tech slides, Fed projects years of low rates, Snowflake doubles in IPO

S&P 500, Nasdaq finish in the red

The major indexes could not shake off the struggles of large tech stocks and drifted lower in the final hour of trading. The S&P 500 and Nasdaq Composite lost 0.5% and 1.3%, respectively. The Dow, at one time up more than 350 points, notched just a 38 point gain. — Jesse Pound

Powell wraps up

Fed chair Jerome Powell concluded his press conference shortly after 3:30 p.m. With less than half an hour remaining in Wednesday’s session, the Dow was up 125 points, while the S&P 500 and Nasdaq Composite had fallen 0.1% and 0.9%, respectively. — Jesse Pound

Tech struggles drag down market

Continued struggles for major tech stocks weighed on the overall market and erased some of its recent gains. The Dow was up 100 points, while the S&P 500 and Nasdaq Composite turned negative. The Nasdaq lost 0.8%. Shares of Facebook fell more than 3% while Apple dropped more than 2%. — Jesse Pound

Oil jumps nearly 5%, posts best day since June

Oil prices jumped on Wednesday after data showed a surprise draw in U.S. inventory last week, and as Hurricane Sally hit production on the Gulf Coast. West Texas Intermediate crude, the U.S. oil benchmark, gained $1.88, or 4.91%, to settle at $40.16. International benchmark Brent crude rose 4.17% to $42.22.

Data from the U.S. Energy Information Administration released Wednesday showed that inventory decreased by 4.4 million barrels last week, compared with the 2.4 million barrel build expected by analysts polled by FactSet. – Pippa Stevens

Market rises as Powell addresses inflation

The market took another step higher to session highs after Fed Chair Jerome Powell said that the central bank would keep its target interest rate steady until inflation was on track to exceed the 2% target for a period of time. The Dow was trading above 350 points after the comments.

“With regard to interest rates, we now indicate that we expect it will be appropriate to maintain the current to zero to 0.25% target range for the federal funds rates until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time,” Powell said. — Jesse Pound

Powell presser begins

Fed chair Jerome Powell has begun his press conference to discuss central banking policy. The press conference is streaming live in CNBC’s Fed live blog. — Jesse Pound

Dow up 300, Nasdaq turns positive

Markets churned higher as investors digested the statement and economic projections from the Federal Reserve. The Dow extended its gain above 300 points, or 1.1%. The lagging Nasdaq Composite broke into positive territory and rose 0.3%. The S&P 500 also hit a session high. — Jesse Pound

Fed holds rates steady and pledges to keep them low for years

The Federal Reserve held its benchmark interest rate steady at its record low level and said it planned for rates to stay low for years. The Dow climbed to session highs following the announcement and was trading up about 260 points. — Jesse Pound

Fed statement upcoming

The Federal Reserve is set to release its latest policy statement at 2 p.m., with Fed Chair Jerome Powell scheduled to speak to the press at 2:30 p.m. Ahead of the central bank’s announcement, the Dow was up about 200 points, or 0.7%, while the S&P gained 0.2%. The Nasdaq Composite fell 0.4%. 

Follow along with CNBC’s live coverage of Wednesday’s Fed news here. — Jesse Pound

GE rising after CEO says to expect positive cash flow

General Electric CEO Larry Culp said at a Morgan Stanley conference that the company expected positive cash flow in the second half of the year, according to Reuters. Culp also said GE was seeing improvement in its aviation segment. Shares of GE jumped to a 7.5% gain for the session. — Jesse Pound

Correction: General Electric CEO Larry Culp spoke at a Morgan Stanley conference. An earlier version misstated the host of the event.

Snowflake jumps more than 100%

Shares of Snowflake popped more than 100% in the company’s initial public offering. The stock priced at $120 per share on Tuesday night before opening trading at $245 per share. The stock surged to more than $276 per share, a gain of 130%, before being halted for volatility.

The company has been backed by high profile investors, including Warren Buffett’s Berkshire Hathaway. — Jesse Pound

Here are the companies making headlines in midday trading.

FedEx – Shares of the shipping company jumped after FedEx beat top and bottom line estimates in the first quarter. The shipping giant earned $4.87 per share on an adjusted basis, which was handily above the $2.69 analysts had been expecting, according to estimates from Refinitiv. Revenue came in at $19.3 billion.

KB Home – The homebuilder stock climbed after Evercore ISI upgraded the stock to an outperform rating in a note titled “housing’s golden age.” “Today, as the global economy reels from COVID-19, the US housing industry stands tall,” the firm said.

DraftKings — Shares of the sports gaming company moved higher with the Big Ten conference set to start its college football season in October. The company also announced a partnership with the NFL’s New York Giants.

Read more movers here. — Jesse Pound

Snowflake set to skyrocket in highly anticipated IPO

Shares of Snowflake are set to jump sharply when the cloud company’s stock starts trading at the New York Stock Exchange. Most recently, the stock was indicated to open between $238 and $241 per share. That would put it at least 98.3% above its IPO pricing of $120 per share. 

Investors were anticipating this IPO as the company has generated $500 million in annualized revenue, with sales growing 130% in the first six months of 2020. —Fred Imbert

Markets at midday: Dow and S&P 500 jump heading into Fed

The major averages were higher in midday trading as traders awaited the latest monetary policy decision from the Federal Reserve. Stocks also got a boost after White House chief of staff Mark Meadows said he was optimistic about Democrats and Republicans reaching a coronavirus stimulus deal. The Dow was up 222 points, or 0.8%. The S&P 500 traded 0.5% higher and the Nasdaq Composite rose marginally. —Fred Imbert

Trump says GOP should ‘go for much higher numbers’ in relief bill negotiations

The Trump administration signaled increased optimism about another relief deal on Wednesday morning. White House chief of staff Mark Meadows said that chances for a deal have improved in recent days, telling “Squawk on the Street” that he was “probably more optimistic about the potential for a deal in the last 72 hours than I have been in the last 72 days.”

President Donald Trump said on Twitter that Congressional Republicans should increase the amount of money they are willing to spend in the relief bill, saying “it all comes back to the US anyway.” The U.S. Senate has declined to take up a multi-trillion dollar billion passed by the House, while Democratic leaders rejected a $1.5 trillion proposal from the House Problem Solvers Caucus on Tuesday. — Jesse Pound, Jacob Pramuk

Contested election likely won’t lead to sell-off like 2000, DataTrek says

Fears of a contested presidential election and a long wait for a winner to be declared are showing up in markets, but DataTrek Research said in a note that the market slump during the Bush-Gore election in 2000 is not a great roadmap for what could happen this year. 

With the winner of Florida unclear in 2000, the S&P 500 fell 5.6% from election day through the following Monday, with five consecutive sessions of decline, according to DataTrek. The index was down 8.2% from election day through the end of the month, and then trimmed some of those losses ahead of the Dec. 12 Supreme Court decision that made George W. Bush the winner. 

However, the election uncertainty was only one headwind for the markets, with growing concern about tech earnings and a slowing economy also hurting stocks, DataTrek said. The 2020 election, on the other hand, is happening amid an economic recovery and lower interest rates from the Federal Reserve. 

“All in all, yes a contested Trump versus Biden race could rattle the markets for some time, but as a compounding effect on current macroeconomic issues rather than a key driver of volatility,” the note said. — Jesse Pound

DraftKings extends gain as Big Ten announces football plan

Shares of DraftKings extended their climb to 8% on Wednesday after the Big Ten announced that its college football season would start in October. The conference, which includes traditional powers including Ohio State and Michigan, previously postponed its season due to health concerns. The Big Ten’s return will include daily testing for players. — Jesse Pound

Here are Wednesday’s biggest analyst calls of the day

  • RBC upgraded Lennar to outperform from sector perform.
  • Deutsche Bank upgraded Tapestry to buy from hold.
  • Wedbush initiated Overstock.com as buy.
  • Credit Suisse raised its price target on Tesla to $400 from $280.
  • Guggenheim upgraded Kraft Heinz to neutral from sell.
  • Needham raised its price target on Apple to $140 from $112.50.
  • Deutsche Bank added a catalyst call buy on Zillow.
  • Evercore ISI upgraded KB Home to outperform from in line.

Pro Subscribers can read more here. – Michael Bloom

Core retail sales contracted as $600 weekly unemployment benefits ended

Consumers pulled back spending in some key areas in August, as enhanced unemployment benefits ended.

Core retail sales fell by 0.1%, compared to economists’ forecast for a 0.5% gain. That category excludes automobiles, gasoline and building materials, and was revised down from 1.4% to 0.9% for July. Total retail sales  rose 0.6%, below expectations for a 1.1% gain. 

“Those numbers are ugly,” said Grant Thornton chief economist Diane Swonk. “It confirms that supplemental benefits do matter.” The $600 weekly unemployment benefit, provided in the last stimulus bill, expired July 31. It was replaced by a $300 weekly payment, which is not available in some states. Congress has not been able to agree on a new package. 

“This isn’t a handout. This is trying to support an economy, hobbled by an extraordinary event,” Swonk said.

 Swonk said the retail sales report shows a bifurcation among consumers. Those with jobs were spending on cars and fixing up their homes, but spending at grocery stores, a necessity, declined, even though food prices were rising.

Core sales are watched by economists because the figure corresponds closely to consumption in gross domestic product. Goldman Sachs economists last week raised their forecast for third quarter GDP growth to 35%, in part because of consumer spending which they had expected to rise 1.5% in August. —Patti Domm 

Kodak surges 70% after review clears exec of insider trading

Shares of Eastman Kodak soared more than 70% on Wednesday after an independent review found the company didn’t break any laws related to its disclosure of a $765 million loan from the U.S. government to help produce drug ingredients. The review by law firm Akin Gump concluded that securities transactions made by Chief Executive Jim Continenza around the time of the loan are in line with the investment pattern in the past. It blamed the disclosure issues on a junior employee, who mishandled the embargoed information.

The photography pioneer has had a tumultuous few weeks that saw its shares skyrocket more than 300% at one point on optimism about the pivot into drug production and then wipe out most of the gains due to the investigation. The White House had decided to put the loan on hold until the company is cleared of the alleged wrongdoing about insider transaction and disclosure of the government deal.

The review did raise red flags about Kodak’s governance and other policies. It highlighted that board member George Karfunkel donated 3 million Kodak shares to a religious institution on the same day the stock’s price peaked.— Yun Li

Stocks rise ahead of Fed’s quarterly update

Stocks rose on Wednesday as investors awaited the Federal Reserve’s latest read on the economy. The Dow Jones Industrial Average advanced 91 points for a gain of 0.33%. The S&P 500 also advanced 0.33%, while the Nasdaq Composite traded 0.25% higher. – Pippa Stevens 

DraftKings inks deal with New York Giants

Sports gaming company DraftKings announced another exclusive partnership with a sports entity on Wednesday, this time the NFL’s New York Giants. DraftKings Chief Business Officer Ezra Kucharz told CNBC that the deal was a “multisegment relationship.” Shares of DraftKings rose more than 4% in premarket trading. The stock has seen bounces from recent announcements of deals with ESPN and Michael Jordan. — Jesse Pound, Jabari Young

Snowflake prices IPO above increased range

Fed to end meeting with multiple market-moving items on the agenda

The Federal Reserve concludes its two-day meeting Wednesday with no likelihood of movement on interest rates but a variety of other items on its agenda. Among the things markets will be watching are the Fed’s revised economic projections that now will extend to 2023, a possible clarification of the parameters it will need to hit before considering rate hikes and a change in the approach to the bond-buying program. “They’re not ready to announce any big changes now. They’re looking at the economy and they’re probably feeling a little better with the growth picture,” said Ethan Harris, head of global economics research at Bank of America. This will be the final Federal Open Market Committee meeting before the November presidential election. — Jeff Cox

FedEx jumps 9% following earnings beat

Shares of FedEx jumped more than 9% during premarket trading on Wednesday after the company’s first quarter earnings came in ahead of expectations. The company reported a profit of $4.87 per share on an adjusted basis, which was handily above the $2.69 analysts had been expecting, according to estimates from Refinitiv. Revenue came in at $19.3 billion. – Pippa Stevens

Stock futures rise

Futures contracts tied to the major U.S. averages rose on Wednesday as the Street awaits the latest comments from the Federal Reserve. 

Futures on the Dow Jones Industrial Average climbed 0.36%, pointing to a gain of more than 120 points at the opening bell. S&P 500 futures rose 0.4%, while Nasdaq 100 futures added 0.1%.

Later on Wednesday the Federal Open Market Committee will provide its quarterly update on GDP, unemployment and inflation.

The Nasdaq Composite and S&P 500 rose 1.21% and 0.52% respectively, on Tuesday, while the Dow managed to eke out a gain of 0.01%. – Pippa Stevens

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