US stocks climb on Target results, Fed minutes

NEW YORK - Wall Street stocks finished higher on Aug 22, following solid earnings from big-box retailer Target and US Federal Reserve meeting minutes that hinted at an upcoming interest rate cut.

Target – Walmart’s smaller, North American-focused rival – soared more than 11 per cent after reporting higher comparable store sales in its second quarter after a string of declines.

Meanwhile, futures markets continued to bet on a September interest rate cut following Fed meeting minutes in which a “vast majority” of policymakers expressed support for an interest rate cut if economic data plays out as expected.

The Dow Jones Industrial Average ended up 0.1 per cent at 40,890.49.

The broad-based S&P 500 gained 0.4 per cent to 5,620.85, while the tech-rich Nasdaq Composite Index rose 0.6 per cent to 17,918.99.

The Fed minutes were “dovish and though they’re dated, they suggest the debate is not whether the central bank cuts interest rate at its upcoming September meeting but rather how aggressive the initial phase of this normalisation cycle should be”, said a note from Oxford Economics.

Interest rate cuts are expected in light of a weaker US jobs market.

Labour Department figures released on Aug 21 showed US employers added around 68,000 fewer jobs monthly in the 12-month period through March 2024 compared with earlier estimates.

Among individual companies, Ford climbed 1.5 per cent despite announcing US$1.9 billion (S$2.4 billion) in costs connected to shifts in its electric vehicle (EV) strategy.

The automaker scuttled plans for one new EV model and pushed back the timeframe on a second vehicle in light of a slower-than-expected transition to EVs in North America.

JD.com, the Chinese online retail company, fell 4.2 per cent after disclosing that Walmart divested its shares in the company.

Among retailers reporting Wednesday, TJ Maxx parent TJX jumped 6.1 per cent, while Macy’s slumped 13 per cent. AFP