Stock Market Recap: Nasdaq Surges Past 20,000 as Tech Giants Rally
Market Performance: Major Indexes Hit New Highs
The U.S. stock market saw significant gains on Wednesday, December 11, 2024, with the Nasdaq Composite breaking through the 20,000-point barrier for the first time in history. This milestone comes as tech giants continue to dominate market performance, driving overall gains across major indexes.
The S&P 500 rose 0.9% to 6,084.19, while the Dow Jones Industrial Average dipped slightly by 0.2% to 44,148.56. The star of the day was undoubtedly the Nasdaq, which surged 1.8% to close at 20,034.89, marking a historic moment for the tech-heavy index.
Tech Giants Lead the Charge
The rally was primarily fueled by strong performances from several key tech stocks:
1. Google-parent Alphabet (GOOGL) jumped about 5%, reaching an all-time high.
2. Tesla (TSLA) also saw a significant boost, rising 5.9% to close at $424.77, a new record for the electric vehicle maker.
3. Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), and Meta (META) all posted solid gains, contributing to the Nasdaq’s record-breaking performance.
Economic Data and Market Sentiment
Investors were buoyed by the latest Consumer Price Index (CPI) report, which showed that 12-month inflation rose to 2.7% in November, matching economists’ estimates. This data reinforced expectations that the Federal Reserve might cut its benchmark fed funds rate at its upcoming policy meeting on December 18.
Market participants are now pricing in a 95% chance of a quarter-point rate cut next week, up from 86% before the inflation report’s release. This optimism has been a key driver of the recent market rally.
Notable Stock Movements
Several companies made headlines with significant stock movements:
1. Netflix (NFLX) hit a new all-time high, up about 3% to around $940, following a price target increase from JPMorgan.
2. Macy’s (M) shares fell approximately 10% after the company released its delayed third-quarter earnings report and adjusted its full-year outlook.
3. General Motors (GM) saw its stock rise nearly 3% in extended trading after announcing it would no longer fund robotaxi development by self-driving car company Cruise.
Looking Ahead: Upcoming Market Events
Investors are keeping a close eye on several upcoming events that could impact market performance:
1. The Federal Reserve’s interest rate decision on December 18, with expectations of a potential rate cut.
2. Adobe’s earnings report, scheduled for release after the closing bell on Wednesday.
3. Ongoing developments in artificial intelligence, particularly in the tech sector, as companies like Salesforce continue to push AI initiatives.
Why Was the Market Up Today?
The market’s strong performance can be attributed to several factors:
1. Tech sector dominance: The continued rally in big tech stocks, particularly in AI-related companies, has been a major driver of market gains.
2. Positive economic data: The CPI report aligning with expectations has boosted investor confidence in the Fed’s ability to manage inflation.
3. Rate cut expectations: The increased likelihood of a Fed rate cut next week has fueled optimism among investors.
4. Strong corporate performances: Companies like Netflix and Tesla reaching new highs have contributed to overall market sentiment.
As we move towards the end of 2024, the stock market continues to show resilience and growth, with technology companies leading the way. Investors will be closely monitoring the Federal Reserve’s decisions and upcoming corporate earnings reports for further indications of market direction.
