Sentiment improves on Wall Street thanks to news from the US Supreme Court

Demand prevailed on US stock markets on Wednesday. In the first part of the session, this was mainly due to the desire to take advantage of lower prices after their significant decline the previous day. In the second part, sentiment improved with news from the US Supreme Court, which began reviewing the legality of the tariffs imposed this year by President Donald Trump. The skeptical statements of the justices, particularly those considered conservative, fueled hopes that at least some of the tariffs might be overturned. On prediction markets like Polymarket, the probability of the tariffs being deemed legal, based on participants' bets, fell significantly. Shares of companies that could benefit from such a verdict rose, including automotive companies General Motors (2.5%), Ford Motor (2.5%), and Stellantis (4.4%).

Investors bought shares of technology companies, encouraged by the decline in their prices on Tuesday. Among the biggest gainers in the S&P 500 was Micron Technology (8.9%), a semiconductor company that not only recovered a significant loss from the previous day but also set a record high. The change in market sentiment was well reflected in AMD's share price (2.5%). Despite the release of better-than-expected quarterly results, the chipmaker's shares were falling significantly in pre-market trading and the first few minutes of trading. However, the shift in market sentiment caused investors to overlook the company's high valuation after its stock price had risen by over 100% this year. This approach, however, was not universal, as Palantir Technologies' share price fell another session (-1.5%) despite a significant decline in its stock on Tuesday, which was not halted by a strong quarterly report. Investors may have been concerned by the news that Ark Invest, Cathie Wood's fund, had dumped Palantir shares before the company reported its results.

US bonds, which had been considered a safe haven the day before, fell. This was driven by better-than-expected macroeconomic data on private sector job creation and service sector activity in October. Analysts also pointed out that signals of a planned increase in the government's issuance of long-term securities contributed to the rise in yields.

In the S&P 500, over 60% of companies ended the session with rising prices. Eight of the 11 main segments of the index rose. The largest price gains were seen in telecommunications services (1.6%), consumer discretionary (1.1%), and especially in automotive (3.9%), as well as materials companies (0.5%), primarily mining and metallurgy (2.4%). Supply, however, prevailed in the consumer discretionary (-0.25%), IT, and real estate segments (both -0.1%).

The Dow Jones Industrial Average rose, even though the shares of most of its constituent companies fell. This was due to a strong gain in Amgen (7.8%), which rose thanks to better-than-expected quarterly results. Other top-performing companies on the index included Caterpillar (3.9%), a potential beneficiary of the tariffs' cancellation, and 3M Co. (2.3%). The largest declines were recorded by Home Depot (-2.4%), Sherwin-Williams Co. (-2.1%), and Nvidia (-1.75%).

On the Nasdaq Composite, over 60% of the 3,300 companies in the composite rose. Most of the "Magnificent Seven" blue-chip tech stocks also rose. Tesla, the biggest loser the day before, rose the most (4.0%). Alphabet (2.4%) and Meta Platforms (1.4%) also rose significantly. Meanwhile, shares of Nvidia (-1.75%) and Microsoft (-1.4%) fell.