US stocks rally after volatile session

US stocks rallied on Wednesday after a volatile session, as investors analysed the latest US inflation data and its potential impact on Federal Reserve policy.

The S&P 500 rose 1.07 per cent to close at 5,554.13. It was the first time since October 2022 that the broad index had dropped more than 1 per cent intraday and then closed with a gain of over 1 per cent. The Dow Jones Industrial Average added 124.75 points, or 0.31 per cent, to finish at 40,861.71. At its lowest point during the session, the blue-chip index had fallen by as much as 743.89 points. Meanwhile, the tech-heavy Nasdaq Composite surged 2.17 per cent to close at 17,395.53, recovering from earlier declines.

Turning to US sectors, they were mixed overnight. Technology was the best performer of the day, closing higher by 3.25 per cent. Energy was the worst performer.

Mega-cap tech and semiconductor stocks fueled the Nasdaq’s rally in afternoon trading, with Nvidia jumping 8 per cent and AMD gaining nearly 5 per cent. The VanEck Semiconductor ETF (SMH) also climbed about 5 per cent. Bank stocks like JPMorgan Chase and Goldman Sachs, which had been down earlier in the day, managed to eke out modest gains by the session's close.

Uranium mining and processing stocks, along with relevant ETFs, experienced a sharp rise after Russian President Vladimir Putin suggested potential restrictions on exports of uranium, titanium, and nickel. Cameco Corp.'s stock jumped 6.4 per cent, NexGen Energy rose 4.3 per cent, and Denison Mines gained 5.4 per cent, while Uranium Energy Corp. surged 7.3 per cent and Centrus Energy climbed 8.4 per cent. The Global X Uranium ETF and the Sprott Nickel Miners ETF also saw gains of 4.4 per cent and 2.4 per cent, respectively, reflecting increased investor interest in these critical materials.

Shares of lithium giant Albemarle surged by 16.7 per cent in early trading and closed up 13.6 per cent after news of a significant industry development. Contemporary Amperex Technology Co. (CATL) reportedly decided to halt lithium operations in Jiangxi province to address oversupply issues for lithium carbonate equivalent (LCE), which has been exacerbated by a global slowdown in electric vehicle (EV) demand. Despite recent price declines, the industry anticipates a nearly 50 per cent increase in lithium supply this year, with China being the main contributor.

The market initially slid after core inflation — excluding volatile food and energy categories — came in slightly higher than expected, dampening hopes for a larger rate cut by the Federal Reserve. Traders are now pricing in an 85 per cent likelihood of a 25 basis-point rate cut at the Fed’s September 17-18 meeting, according to CME Group’s FedWatch tool. Despite the core reading, the overall Consumer Price Index (CPI) hit its lowest annual level since February 2021.

September has historically been a tough month for the S&P 500, which has averaged a loss of over 1 per cent over the past decade. The index has also posted losses in September for the past four consecutive years.

The CBOE Volatility Index (VIX) briefly traded above 20 during the session before settling back to 18, indicating elevated uncertainty among investors.

Futures

The SPI futures are pointing to a 0.6 per cent gain.

Currency

One Australian dollar at 7.25am was buying 66.74 US cents.

Commodities

Gold lost 0.03 per cent. Silver added 1.10 per cent. Copper gained 1.07 per cent. Oil gained 2.37 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE fell 0.15 per cent, Frankfurt added 0.35 per cent, and Paris closed 0.14 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei fell 1.49 per cent, Hong Kong’s Hang Seng lost 0.73 per cent, while China’s Shanghai Composite closed 0.82 per cent lower.

Yesterday, the Australian share market closed 0.30 per cent lower at 7988.

Ex-dividends
Air New Zealand (ASX:AIZ) is paying 1.1704 cents unfranked
Atlas Pearls Ltd (ASX:ATP) is paying 1 cent fully franked
Austin Engineering (ASX:ANG) is paying 0.8 cents fully franked
BHP Group Limited (ASX:BHP) is paying 109.209 cents fully franked
Breville Group Ltd (ASX:BRG) is paying 17 cents fully franked
Cash Converters (ASX:CCV) is paying 1 cent fully franked
CTI Logistics (ASX:CLX) is paying 5.5 cents fully franked
Earlypay Ltd (ASX:EPY) is paying 0.15 cents fully franked
Freightways Group Ltd (ASX:FRW) is paying 17.2523 cents unfranked
Joyce Corporation (ASX:JYC) is paying 12 cents fully franked
Joyce Corporation (ASX:JYC) is paying 5.5 cents fully franked
McMillan Shakespeare (ASX:MMS) is paying 78 cents fully franked
Navigator Global Ltd (ASX:NGI) is paying 4.4274 cents unfranked
Nine Entertainment (ASX:NEC) is paying 4.5 cents fully franked
NZME Limited (ASX:NZM) is paying 2.7513 cents unfranked
Perpetual Limited (ASX:PPT) is paying 53 cents 50 per cent franked
Pwr Holdings Limited (ASX:PWH) is paying 9.2 cents fully franked
Spark New Zealand (ASX:SPK) is paying 12.7831 cents unfranked
TPG Telecom Limited (ASX:TPG) is paying 9 cents 86.77 per cent franked
WCM Global Growth (ASX:WQG) is paying 1.81 cents fully franked
XRF Scientific (ASX:XRF) is paying 3.9 cents fully franked