Stock Market Today: Indexes Dip as Investors Await Key Inflation Data
Market Overview: Why Is the Market Down Today?
As of Wednesday, December 11, 2024, the U.S. stock market is experiencing a slight downturn, continuing the trend from the previous day. Investors are cautiously positioning themselves ahead of a crucial inflation report set to be released later today. This data is expected to significantly influence the Federal Reserve’s upcoming interest rate decision on December 18.
The S&P 500 index fell 0.3% to 6,034.91, while the Dow Jones Industrial Average (DJI) tumbled 0.4% or 154.10 points to close at 44,247.83. The tech-heavy Nasdaq Composite also slid 0.3% to finish at 19,687.24. These movements reflect the market’s apprehension as it awaits critical economic indicators.
Key Factors Driving Market News Today
1. Inflation Data Anticipation: The market’s primary focus is on the upcoming consumer inflation report. This data will be one of the last pieces of information Federal Reserve officials will consider before making their final rate decision of the year.
2. Treasury Yields: The 10-year Treasury yield, which is sensitive to interest rate expectations, climbed to 4.24%. This increase suggests that bond investors are pricing in the possibility of continued high interest rates.
3. Sector Performance: Eight out of eleven broad sectors of the S&P 500 ended in negative territory. The Technology Select Sector SPDR (XLK), Real Estate Select Sector SPDR (XLRE), and Materials Select Sector (XLB) were among the hardest hit, tumbling 1.4%, 1.6%, and 1% respectively.
4. Volatility: The fear-gauge CBOE Volatility Index (VIX) was down 0.1% to 14.18, indicating a relatively calm market despite the ongoing uncertainties.
Major Stock News and Corporate Announcements
1. Oracle (ORCL): The cloud-computing giant’s stock plummeted 6.7% after reporting lower-than-expected adjusted quarterly earnings and revenue, despite CEO Safra Catz citing “record level AI demand.”
2. G-III Apparel Group Ltd. (GIII): The company’s stock surged 10.4% after beating earnings estimates, reporting $2.59 per share against an expected $2.26.
3. United Natural Foods Inc. (UNFI): Shares skyrocketed 20% following better-than-expected quarterly earnings of $0.16 per share, compared to an estimated $0.01.
4. Alphabet (GOOGL): The tech giant’s stock jumped after unveiling Willow, a quantum computing chip with groundbreaking computational capabilities.
5. Taiwan Semiconductor Manufacturing Co. (TSM): Despite reporting a 34% jump in November sales, the company’s stock slid alongside other chip manufacturers like Nvidia (NVDA), Broadcom (AVGO), and Micron (MU).
Upcoming Market Events to Watch
1. Federal Reserve Interest Rate Decision: Scheduled for December 18, this decision will be crucial in determining the market’s direction for the remainder of the year and into 2025.
2. Consumer Inflation Report: Set to be released later today, this report will provide vital insights into the state of the economy and potentially influence Fed policy.
3. Earnings Reports: As the fourth quarter of 2024 nears its end, investors should keep an eye on upcoming earnings releases from major companies, which could significantly impact market sentiment.
Market Outlook and Investor Sentiment
The current market environment reflects a cautious optimism tempered by uncertainty. The recent pullback from record highs achieved last Friday indicates that investors are reassessing their positions in light of upcoming economic data and policy decisions.
Small Business Optimism: The National Federation of Independent Business (NFIB) small business optimization index came in at 101.7 for November, surpassing the 50-year average of 98 for the first time in 34 months. This suggests an improving outlook among small business owners, with 14% saying it’s a good time to expand – the highest since June 2021.
As we move towards the end of 2024, market participants will be closely monitoring inflation trends, Federal Reserve policy, and corporate earnings to gauge the potential for continued economic growth and market performance in the coming year.
Investors are advised to stay informed about these key economic indicators and maintain a diversified portfolio to navigate the potential market volatility in the days ahead.
