The Dow Jones Industrial Average rose 203 points, or 0.8% to trade above 27,000 for the first time since Aug. 1. The S&P 500 and the Nasdaq Composite climbed 0.6% and 1%, respectively.
Apple shares traded 3.1% higher after climbing more than 1% on Tuesday. The tech giant unveiled three new iPhones on Tuesday along with a new Apple Watch and a TV subscription service. Apple also showcased a gaming subscription called Apple Arcade.
Bank of America analyst Wamsi Mohan said Apple’s pricing of its new products was compelling. It’s gaming service is the cost of “one console game for access to 100 games for the entire family for a year.”
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Apple’s gains gave the tech sector a much-needed lift. The sector rose about 0.9% after starting the week with a 1.2% decline. Tech has been under pressure amid a massive rotation away from growth-oriented shares into underappreciated value companies.
Micron Technology contributed to tech’s gains, rising 2% after an analyst at Longbow upgraded the stock to buy from neutral. The analyst said Micron should benefit from improving fundamentals in the memory and flash storage market. Cisco Systems also rose 1.5% after Evercore ISI initiated the Dow member with an outperform rating, citing a “unique” asset portfolio.
On the data front, investors digested key inflation data. The U.S. producer price index rose 0.1% in August, while economists polled by Reuters expected the index to remain unchanged. Wall Street pored through the data as they look for clues on the Federal Reserve’s next move on monetary policy.
The U.S. central bank is largely expected to lower rates in a meeting next week. Market expectations for a September rate cut are at 91.2%, according to the CME Group’s FedWatch tool.
“The biggest question to be answered coming out of next week’s meeting, however, is what to expect for the fourth quarter,” said Willie Delwiche, investment strategist at Baird, in a note. He added the market is currently pricing in at least one more rate cut after next week’s meeting. “If the consensus view on the FOMC is that this is unwarranted, look for post-meeting language next week that could convey this message.”
The Fed’s decision will follow a policy announcement from the European Central Bank. The ECB is expected to cut rates Thursday morning along with some measure of quantitative easing.
Wall Street also remained focused on U.S.-China trade relations. Beijing released a tariff exemptions list for products from the U.S. on Wednesday morning.
Meanwhile, according to the American Chamber of Commerce in Shanghai, some American companies are speeding up their move away from China amid the imposition of U.S. tariffs.