Stock Market Soars as Fed Cuts Rates: A Comprehensive Look at November 8, 2024
Major Indexes Hit Record Highs
As of Friday, November 8, 2024, the stock market continues to ride the wave of optimism following yesterday’s Federal Reserve decision and the recent presidential election results. The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) both reached new all-time highs, with the S&P 500 closing up 0.74% and the Nasdaq surging 1.54% . The Dow Jones Industrial Average (^DJI), while not setting a new record, has shown remarkable strength, having gained approximately 1,500 points in a single day earlier this week .
Fed’s Rate Cut Fuels Market Optimism
In a widely anticipated move, the Federal Reserve cut interest rates by 25 basis points on Thursday, lowering its benchmark rate to a range of 4.5% to 4.75% . This decision has been well-received by investors, contributing to the current market rally. Fed Chair Jerome Powell stated that while inflation has moved closer to the Fed’s goal, core inflation remains “somewhat elevated” .
Post-Election Market Surge
The market’s upward trajectory is also attributed to the recent presidential election results. President-elect Trump’s victory has sparked optimism among investors, who anticipate potential corporate tax cuts and reduced regulations . This sentiment has been a significant driver of the current stock market rally.
Tech Sector Leads the Charge
Technology stocks have been at the forefront of this market surge. Nvidia (NVDA) and Amazon (AMZN) have both reached new highs . Other tech companies making waves include:
1. ARM Holdings Plc, which jumped 4% after reporting better-than-expected Q2 earnings and revenue .
2. Qualcomm (QCOM), whose shares soared 7.9% following a forecast of current-quarter sales and profit exceeding Wall Street estimates .
Major Company News
Several other companies have made headlines with their recent performance and announcements:
1. Warner Bros Discovery (WBD) saw an 11% increase after reporting 110.5 million total subscribers, surpassing expectations .
2. McKesson (MCK) is up over 10% following strong Q2 results and an improved 2025 forecast .
3. Lyft (LYFT) experienced a significant 22% jump after reporting better-than-expected Q3 gross bookings .
4. JPMorgan Chase (JPM), however, faced a 4% decline following a downgrade by Baird .
Upcoming Market Events
Investors should keep an eye on these upcoming earnings reports scheduled for November 8, 2024:
– Advanced Drainage Systems Inc (WMS)
– Baxter International Inc (BAX)
– CNH Industrial NV (CNH)
– Dillard’s Inc (DDS)
– Flowers Foods Inc (FLO)
– Fortrea Holdings Inc (FTRE)
– Lamar Advertising Co (LAMR)
– NRG Energy Inc (NRG)
– Paramount Global (PARA)
– RB Global Inc (RBA)
Economic Indicators and Future Outlook
Recent economic data presents a mixed picture:
– Weekly jobless claims rose slightly to 221,000, indicating a still-strong labor market .
– Q3 nonfarm productivity increased by 2.2%, slightly below expectations .
– Q1 unit labor costs rose 1.9%, higher than anticipated .
Looking ahead, market participants are pricing in a 71% chance of another 25 basis point rate cut at the December 17-18 FOMC meeting . This expectation, combined with the potential for policy changes under the new administration, continues to fuel market optimism.
Global Market Perspective
The positive sentiment extends beyond U.S. borders. The Euro Stoxx 50 closed up 1.07%, while China’s Shanghai Composite Index climbed 2.57% to a 4-week high . This global market strength, particularly in China, bodes well for international trade and economic growth prospects.
In conclusion, the stock market on November 8, 2024, reflects a potent mix of monetary policy easing, political change, and strong corporate performances. As always, investors should remain vigilant and diversified, keeping an eye on upcoming economic data and potential policy shifts that could impact market dynamics.
