Index Wavers as Fed Lowers Rates, Powell Warns December Cut Not Guaranteed

Shares of a chip testing equipment provider and a data storage company notched solid gains as artificial intelligence demand helped drive strong quarterly earnings, while a financial technology firm came under pressure following soft results and a leadership shakeup.

Major U.S. equities indexes ended the session mixed on Wednesday as the Federal Reserve announced a widely expected quarter-point cut to its benchmark interest rate. After trading higher for much of the day, the market gauges lost steam in the afternoon when Fed Chair Jerome Powell threw cold water on the widespread assumption that another cut in December is inevitable.

The S&P 500 finished flat. The Dow Jones Industrial Average fell 0.2% while the tech-heavy Nasdaq advanced 0.6%. Check here for Investopedia’s full summary of the day’s market news.

Teradyne (TER) shares surged 20.5%, outpacing all other stocks in the S&P 500, after the provider of automated test equipment topped third-quarter sales and profit estimates and provided better-than-expected guidance for the fourth quarter. Strong AI-driven demand for semiconductor testing equipment underpinned the upbeat forecast. Teradyne also named Michelle Turner, formerly an executive at defense contractor L3Harris Technologies (LHX), as its new chief financial officer (CFO).

Seagate Technology Holdings (STX), a manufacturer of data storage solutions, also surpassed sales and profit forecasts for the third quarter and issued a promising fourth-quarter outlook. CEO Dave Mosley highlighted the importance of artificial intelligence in driving demand for the company’s heat-assisted magnetic recording drives. Seagate stock jumped 19.1%, while shares of fellow data storage specialist Western Digital (WDC) added 13.2%.

Centene (CE) shares popped 12.5% after the health insurer posted a surprise profit for the third quarter and raised its full-year guidance. Increased demand for Medicare prescription drug plans and higher rates in Centene’s Medicaid business helped drive revenue growth and offset challenges related to rising medical costs.

Shares of Fiserv (FI), a provider of digital banking and payment processing services, plummeted 44% to post the S&P 500’s weakest performance Wednesday. The company reported lower-than-expected revenue and adjusted earnings per share for the third quarter and cut its full-year forecasts. Fiserv also announced an “action plan” aimed at improving its performance and announced that Paul Todd, former CFO of Global Payments, will take over as its finance chief.

Verisk Analytics (VRSK), which offers data analytics solutions primarily for the insurance industry, topped third-quarter adjusted profit forecasts but fell short of revenue expectations. The company cited low levels of severe weather during the period, which limited the volume of claims processed through its systems. Verisk also trimmed its full-year revenue forecast, and its share tumbled 10.4%. 

Although online real estate platform operator CoStar Group (CSGP) exceeded sales and profit forecasts for the third quarter, its upwardly revised full-year forecast for adjusted earnings per share remained below consensus expectations. Analysts at Baird lowered their price target on CoStar stock, citing challenges related to apartment bookings. CoStar shares fell 9.9%.