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Business Markets

Wall Street ends higher, Cisco Systems jumps after forecast

Investors still assessing Wednesday’s minutes from Federal Reserve

Image Credit: Reuters

New York: The S&P 500 and Nasdaq ended higher Thursday as an upbeat sales forecast from Cisco Systems helped to lift the technology sector, while data showed the economy remained relatively strong.

Investors were still assessing Wednesday’s minutes from the Federal Reserve’s July meeting, which they initially saw as supporting a less aggressive stance by the central bank.

But the minutes did not clearly hint at the pace of rate increases and showed policymakers committed to raising rates to tame inflation.

“We’re at a point where people are trying to make a judgment about whether the inevitable higher interest rates are going to choke off the upside of the market,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

“There are really two camps - one who feels the worst is behind us and continue to buy these selloffs, and the camp that feels the worst is ahead of us and like this is some kind of bear market rally that will retreat.” Traders now expect a greater chance of a 50 basis point rise in borrowing costs in September instead of a 75 basis point increase for a third time.


Meanwhile, Cisco gained and was among the biggest positives on the three major indexes, after it provided an upbeat forecast for first-quarter sales late on Wednesday as a COVID-19 recovery in China eased supply chain shortages.

According to preliminary data, the S&P 500 gained 10.42 points, or 0.24 per cent, to end at 4,284.58 points, while the Nasdaq Composite gained 27.85 points, or 0.22 per cent, to 12,965.97. The Dow Jones Industrial Average rose 26.80 points, or 0.08 per cent, to 34,007.12.

Supporting the view that the Fed may need to be more hawkish, data Thursday showed solid momentum on the US economic front.

The Philadelphia Federal Reserve’s monthly manufacturing index rose to 6.2 this month from negative 12.3 in July, topping all 30 estimates in a poll of Reuters economists.

Also, a string of US central bank officials said on Thursday the Fed needs to keep raising borrowing costs to bring high inflation under control, although they debated how fast and how high to lift them.


The Fed has lifted its benchmark interest rate by 225 basis points so far this year in an effort to bring inflation down from a four-decade high.

Focus now could turn to the Fed’s annual Jackson Hole symposium late next week.

Other gainers in high-growth stocks included Nvidia. Among the day’s decliners, Kohl’s Corp stock slid after the retailer cut its full-year sales and profit forecasts. The news followed a dissapointing report from Target on Wednesday.

After a brutal start of the year, stocks have jumped since mid-June, partly because of upbeat earnings.

After the recent big move and with second-quarter earnings nearly done, the market may be “at a little bit of an equilibirum,” Meckler said.