CNBC Business News Update - Market Close: Stocks Higher On Rate Cut Hopes, Dow At Record Up 742 Pts, S&P 500 At Record, Retail Sales Better Than Expected 7/16/24

Episode Date: July 16, 2024

From Wall Street to Main Street, the latest on the markets and what it means for your money. Updated regularly on weekdays, featuring CNBC expert analysis and sound from top business newsmakers. Anchored and reported by CNBC's Jessica Ettinger.

I'm Jessica Edinger, CNBC. Wall Street opens Wednesday morning after a rate cut rally. On Tuesday, the Dow jumped to a record high for its best performance in more than a year. The S&P 500 index also closed at a fresh record high. The Dow up 742 points, 1.8% sitting at 40,954. So close to 41,000. The S&P 500 index was up 35 points. That's a half percent.

The NASDAQ was up 36 points. It shows you that there's not a lot of investors out there that are looking for exits, even though seasonal forces start to get a little bit tougher and, of course, into the fall. CNBC's Mike Santoli. Investors are hoping for an interest rate cut from the Fed, possibly in September, and a possible Republican in the White House. Widely seen as paving the way for more tax breaks for corporations and for the wealthy and more favorable policies for investors.

Companies whose shares hit fresh all-time highs on Tuesday include Hilton, Royal Caribbean, American Express, Berkshire Hathaway Class B shares, Goldman Sachs, and Amgen. Traders see the odds of a Fed rate cut by September at 100 percent now, according to the CME FedWatch tool. Gold jumped to a record above $2,460 an ounce, also on the hope that the Fed will soon cut interest rates. Crude oil backed down to where it was at the end of June, around $80 a barrel for WTI, West Texas Intermediate. Retail sales better than expected last month. Americans opened their wallets to spend.

A dip had been forecast. The consumer, the backbone of the U.S. economy, continues to remain on relatively solid footing. There is still a good amount of borrowing and spending power on part of the consumer. Stiefel's Lindsay Piegza on CNBC. Here's Forrester's Sucharita Kadali on CNBC. Two of the categories that continue to do very well are the restaurant sector. People are eating out. And then you have, of course, e-commerce continuing to do very well are the restaurant sector. People are eating out. And then you have,

of course, e-commerce continuing to do well. The non-store retailers are still outpacing every other sector in retail. Warner Brothers Discovery cutting nearly a thousand workers. Variety says it's a cost-cutting move and includes jobs and finance and the max streaming service. Would-be homebuyers shopping for new construction homes last month may have caught a price cut. More of the builders dropped their prices in June, but the builders are not so optimistic about selling homes yet. All about mortgage interest rates.

The average on the 30-year fixed was in the low 7% range for all of June, but then began dropping in July from 7.14% to now 6.8%, according to Mortgage News Daily. The expectation is that rates will drop further, but rates had been over 7% for such a long time that builders may not be feeling that today's slightly lower rate environment is quite in the numbers yet. But 31% of builders said they cut home prices in July. That is higher than the 29 percent that did in June. They're still trying everything to get buyers in the door. CNBC's Diana Olick. On Wednesday's watch list, we get earnings from Johnson & Johnson and United Airlines. It's the second and final day of the Amazon Prime Day sale. And the Mirage closes in Las Vegas after three decades. Jessica Ettinger, CNBC.