By Caroline Valetkevitch
NEW YORK (Reuters) -U.S. stocks ended higher on Wednesday, led by a more than 1% gain in the Nasdaq, as Apple shares climbed after news of its plans to announce a domestic manufacturing pledge, and as some companies delivered upbeat earnings reports.
Shares of Apple jumped 5.1% and provided the biggest boost to all three of the major indexes after a White House official said the company would announce a $100-billion domestic manufacturing pledge.
In addition, shares of McDonald’s rose 3% after the fast-food restaurant’s affordable menu drove global sales past expectations, while Arista Networks shares jumped 17.5% after the cloud networking company projected current-quarter revenue above estimates.
“Earnings continue to come in better than expected,” said Sam Stovall, chief investment strategist at CFRA Research.
He said while there is uncertainty surrounding tariffs, investors appear to be upbeat about the near term.
Results are now in from about 400 of the S&P 500 companies for the second-quarter earnings season.
About 80% of reports are beating analyst earnings expectations – above the 76% average of the last four quarters – and earnings growth for the quarter is estimated at 12.1%, up from 5.8% at the start of July, according to LSEG data.
On Wednesday, U.S. President Donald Trump imposed an additional 25% tariff on Indian goods, citing New Delhi’s continued imports of Russian oil.
The Dow Jones Industrial Average rose 81.38 points, or 0.18%, to 44,193.12, the S&P 500 gained 45.87 points, or 0.73%, to 6,345.06 and the Nasdaq Composite gained 252.87 points, or 1.21%, to 21,169.42.
Also positive for stocks were increasing bets for a September interest rate cut from the Federal Reserve. Last week’s jobs report showed slowing employment growth and downward revisions for previous months.
Minneapolis Fed President Neel Kashkari said on Wednesday the Fed may need to cut rates in the near term to account for a slowing economy.
Market expectations for a September rate cut of at least 25 basis points from the Fed stood at 95.2%, up from 92.9% in the prior session and well above 46.7% from a week ago, according to CME’s FedWatch Tool.
Investors also awaited Trump’s choice to fill a slot on the Fed’s Board of Governors.
Bucking the day’s trend, shares of chip company Advanced Micro Devices and server maker Super Micro Computer fell sharply after the companies posted disappointing results in their data center segments. Advanced Micro was down 6.4% and Super Micro was down 18.3%.
