S&P 500 advances slightly on signs of upbeat consumer

Investing.com — The S&P 500 advanced slightly Wednesday, inching closer toward record highs as signs of an upbeat consumer sentiment pointed to underlying strength in economy ahead of key inflation report due Wednesday. 

By 13:52 ET (18:52 GMT), the was up 40 points, or 0.1%, rose 0.1% to as it continues to close the gap on its record closing high of 4,796.56, and the gained 0.3%.

Consumer confidence hits highest level since July; Signs of easing credit crunch in housing

The confidence index from the Conference Board jumped to a reading of 110.7,  the highest level since July 2023 and and the second highest level in the last 2 years, driven by “labor market optimism as well as some additional relief on inflation,” Jefferies said in a note.

unexpectedly picked up pace in November to to a six-month high from the prior month to a seasonally adjusted annual rate of units. Economists were expecting a 0.6% increase to 5.44 million homes. The move comes just as data showed 30-year mortgage rates fell to the lowest level since June.

The duo of economic reports comes ahead of Friday’s , the Fed’s favorite measure of inflation, as investors look for further evidence that inflation has slowed enough for the Fed to begin easing policy next year.

There is now a more than 72% chance that the Fed will roll out a 25 basis point cut in March, up from 43% last week, according to Investing.com’s Fed Rate Monitor Tool.

Weak guidance sees FedEx slump; General Mills falls on guidance cut

That said, investors appear to be taking a breather from this lengthy rally as they digest disappointing news from FedEx (NYSE:), widely seen as a bellwether for the U.S. economy as it tends to indicate strength, or weakness, in consumer spending.

The parcel delivery firm stock fell nearly 11% after it slashed its full-year revenue guidance and posted weaker-than-anticipated quarterly profit, warning that customer demand will face headwinds from “volatile macroeconomic conditions” for the rest of its fiscal year, ending on May 31. 

The outlook hinted at weakness in typically robust holiday spending activity in the U.S., as consumers continue to cope with high inflation and elevated interest rates.

General Mills Inc (NYSE:) lowered its annual sales forecast and missed second-quarter estimates as the food processor warned of a slower recovery in demand, sending its shares more than 2% lower. 

Alphabet leads tech higher

Alphabet Inc Class A (NASDAQ:) rose 3% to fresh 52-week highs as tech giant is reportedly mulling a plan to restructure its ad sales business by ramping up the use of automation including machine learning. 

As well as Alphabet’s rally, gains in Apple Inc (NASDAQ:), Meta Platforms Inc (NASDAQ:), and Microsoft Corporation (NASDAQ:) also supported the broader tech sector.

(Peter Nurse contributed to this report.)