Stock Market Today: Major Indexes Mixed as Nvidia Faces China Probe
Market Overview: December 9, 2024
The stock market showed mixed performance on Monday, December 9, 2024, as investors digested recent labor market data and anticipated the upcoming consumer inflation report. The Dow Jones Industrial Average (^DJI) edged slightly higher, while the S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) struggled to maintain gains. This mixed performance comes after a week where the Dow slid 0.6%, while the S&P 500 and Nasdaq Composite appreciated 1% and 3.3%, respectively.
Major Market Indexes
As of 10:25 AM EST:
– Dow Jones Industrial Average: 44,618.08, down 24.44 points (-0.05%)
– S&P 500: 6,073.79, down 16.48 points (-0.27%)
– Nasdaq Composite: 19,807.90, down 51.87 points (-0.26%)
The S&P 500 and Nasdaq Composite are coming off fresh record highs, with the S&P 500 registering its 57th closing high of the year last week. The Nasdaq Composite has posted its 36th closing high in 2024, demonstrating the continued strength of the technology sector.
Upcoming Market Events
Investors are keenly awaiting the November Consumer Price Index (CPI) report, scheduled for release on Wednesday. This crucial data point is expected to significantly influence the Federal Reserve’s decision at their upcoming meeting on December 18. Market participants are widely anticipating a potential quarter-point rate cut, with the CME FedWatch tool showing an 86% probability of such a move.
Major Stock News
1. Nvidia (NVDA): The AI chip giant’s stock declined more than 2% following reports that Chinese authorities have launched an antitrust probe into the company. This development comes amid escalating US-China tensions in the tech sector.
2. Tesla (TSLA): The electric vehicle manufacturer’s stock showed resilience, trading at $388.92, down just 0.08% despite broader market pressures.
3. Alibaba Group Holding Limited (BABA): The Chinese e-commerce giant saw its stock surge 7.90% to $92.72, benefiting from renewed investor interest in Chinese tech stocks.
4. UnitedHealth Group Inc. (UNH): The healthcare giant was the major loser in the Dow last week, with its stock tumbling 5.1%.
5. Futu Holdings Limited (FUTU): The fintech company emerged as a top gainer, with its stock price soaring 22.94% to $102.38.
Sector Performance
Last week saw divergent performances across sectors:
– Consumer Discretionary Select Sector SPDR (XLY) surged 2.1%
– Communication Services Select Sector SPDR (XLC) gained 0.9%
– Energy Select Sector SPDR (XLE) tumbled 1.7%
– Utilities Select Sector (XLU) fell 1.2%
Economic Indicators
Recent economic data has provided mixed signals:
1. Employment: The U.S. economy added 227,000 jobs in November, surpassing the consensus estimate of 200,000. The unemployment rate increased slightly to 4.2% from 4.1% in October.
2. Wage Growth: The average hourly wage rate increased by 0.4% in November, with a year-over-year increase of 4%, higher than the consensus mark of 3.9%.
3. Consumer Sentiment: The University of Michigan consumer sentiment preliminary index for December came in at 74, higher than the consensus estimate of 73 and up from November’s 71.8.
4. Inflation Expectations: One-year inflation expectations rose to 2.9%, the highest in six months, while long-run (3-5 years) expectations edged down to 3.1%.
Market Outlook
As we move into the final weeks of 2024, market participants remain optimistic about a potential “soft landing” for the U.S. economy. The gradually reducing inflation rate and solid economic fundamentals continue to support this view. However, geopolitical tensions, particularly in the tech sector between the U.S. and China, remain a concern for investors.
The upcoming CPI report and the Federal Reserve’s decision on interest rates will likely set the tone for market performance in the near term. Investors should stay alert to these key events and their potential impact on various sectors and individual stocks.
Despite some mixed performances, several factors are contributing to the market’s overall positive sentiment:
1. Anticipation of Rate Cuts: The increased probability of a Fed rate cut in December is boosting investor confidence.
2. Strong Job Market: November’s job report exceeded expectations, indicating economic resilience.
3. Improved Consumer Sentiment: The rise in the University of Michigan consumer sentiment index suggests growing consumer confidence.
4. Tech Sector Strength: Despite challenges like the Nvidia probe, the tech sector continues to drive market gains.
5. Global Market Influences: Positive movements in Chinese stocks, such as Alibaba, are contributing to market optimism.
As always, investors should remain vigilant and diversified in their approach, keeping an eye on both domestic economic indicators and global market trends.
