Stock Market Recap: Wall Street Drifts Near Records as Post-Election Rally Cools
Market Performance: S&P 500, Dow, and Nasdaq Show Mixed Results
On Thursday, November 14, 2024, the U.S. stock market showed signs of cooling off after the recent post-election rally, with major indexes drifting near their record highs. The S&P 500 edged up 0.1% to close at 5,985.38, while the Dow Jones Industrial Average (DJIA) rose 0.1% to 43,958.19. The tech-heavy Nasdaq Composite, however, slipped 0.3% to finish at 19,230.72.
Why was the market up today? The slight gains in the S&P 500 and Dow can be attributed to ongoing optimism following the Republican victory in the U.S. House of Representatives, giving the party control of both chambers of Congress as well as the presidency. This political alignment is expected to facilitate easier passage of legislation, which markets generally view favorably.
Sector Performance and Notable Stocks
Eight out of eleven broad sectors in the S&P 500 ended in positive territory. The Consumer Discretionary Select Sector SPDR (XLY), Real Estate Select Sector SPDR (XLRE), and Energy Select Sector SPDR (XLE) were the top performers, advancing 0.9%, 0.8%, and 0.8%, respectively.
Notable stock movements included:
1. The Walt Disney Co. (DIS) jumped 7.8% after reporting stronger-than-expected quarterly profits, driven by improved streaming business performance and strong box office results.
2. Tapestry (TPR) shares surged 12.7% following the announcement of the termination of its merger with Capri Holdings.
3. Cisco Systems (CSCO) dropped 2.3% despite beating profit expectations, possibly due to underwhelming financial forecasts.
4. Super Micro Computer (SMCI), an AI boom beneficiary, fell 7.4% after announcing a delay in filing its quarterly financial statements.
Economic Data and Federal Reserve Outlook
The October Consumer Price Index (CPI) data, released earlier in the week, showed inflation rising at an annual rate of 2.6%, up from 2.4% in September. Despite this uptick, market participants have increased their expectations for a Federal Reserve rate cut in December. The CME FedWatch tool now indicates an 83% probability of a 25 basis-point rate reduction, up from 59% just a day earlier.
Upcoming Market Events and Potential Catalysts
Investors are closely watching several upcoming events that could impact market direction:
1. Producer Price Index (PPI) data release on Thursday, November 14, 2024
2. Federal Reserve Chair Jerome Powell’s speech at the Dallas Regional Chamber later on Thursday
3. Ongoing third-quarter earnings reports from major companies
4. Potential policy announcements from the newly-elected Republican-controlled Congress
Market Sentiment and Volatility
The market’s fear gauge, the CBOE Volatility Index (VIX), fell around 5% on Wednesday to its lowest close since July, indicating relatively low investor anxiety. However, trading volume remains elevated, with 16.49 billion shares traded on Wednesday, higher than the last 20-session average of 13.46 billion.
International Market Performance
European markets showed moderate gains on Thursday, with the pan-European Stoxx 600 up 0.19% in early deals. The U.K.’s FTSE 100 index was down 0.11%, Germany’s DAX rose 0.42%, France’s CAC increased 0.08%, and Italy’s FTSE MIB climbed 0.44%.
Looking Ahead: Market Outlook
As the post-election rally shows signs of slowing, investors are reassessing market conditions and potential catalysts for future growth. The focus remains on inflation trends, Federal Reserve policy decisions, and the implementation of new economic policies under the Republican-controlled government.
Key factors to watch in the coming days include:
– Further corporate earnings reports
– Federal Reserve officials’ comments on monetary policy
– Progress on potential legislative initiatives from the new Congress
– Global economic indicators and geopolitical developments
In conclusion, while the stock market recap for November 14, 2024, shows a mixed performance, the overall sentiment remains cautiously optimistic. Investors are balancing the potential benefits of a unified government against ongoing economic challenges and the evolving monetary policy landscape.
