Stock Market Today: Nasdaq Hits 20,000 as Tech Rally Continues
The stock market continues its impressive run on Thursday, December 12, 2024, with major indexes hovering near all-time highs. This surge is primarily driven by a robust rally in technology stocks and growing optimism about potential interest rate cuts by the Federal Reserve.
Market Performance
As of the latest trading session:
– The S&P 500 is up 0.9% at 6,068.97 points
– The Dow Jones Industrial Average has gained 0.21% to 44,339.36 points
– The Nasdaq Composite has surged 0.95% to 19,874.76 points, after crossing the 20,000 mark for the first time in the previous session
This remarkable performance comes on the heels of Wednesday’s Consumer Price Index (CPI) report, which showed inflation rising 0.3% month-over-month in November, in line with economists’ expectations. The annual inflation rate stands at 2.7%, indicating the Federal Reserve’s efforts to control inflation are bearing fruit .
Fed Rate Cut Expectations
The in-line inflation data has bolstered market confidence in an imminent interest rate cut by the Federal Reserve. According to the CME FedWatch tool, there’s now a 96% probability of a 25 basis point cut at the Fed’s upcoming meeting. This expectation has contributed significantly to the market’s bullish sentiment .
Technology Sector Leads the Charge
The technology sector continues to be the primary driver of market gains. Notable performances include:
– Alphabet (GOOGL) and Tesla (TSLA), both up about 5% and trading at all-time highs
– Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), and Meta (META) all posting solid gains
Upcoming Market Events
Investors are eagerly anticipating several key events that could impact market direction:
1. Producer Price Index (PPI) report: Due later today, this data will provide further insights into inflationary pressures.
2. Weekly jobless claims: Also scheduled for release today, this report will offer a snapshot of the labor market’s health.
3. Earnings reports: Major companies including Broadcom, RH, and Costco Wholesale are set to release their financial results after market close .
Political Influence on Markets
The recent victory of former President Donald Trump in the November presidential election has added another layer of optimism to the market. Analysts believe his policies on lower corporate taxes and eased regulations could potentially boost corporate performance .
Notable Stock Movements
Several individual stocks are making significant moves:
– GameStop (GME): Up 5.2% after reporting a profit for the third quarter, attributed to cost-saving efforts.
– Broadcom (AVGO): Jumped 3.5% following reports that Apple is developing its first server chip designed for artificial intelligence in collaboration with the company.
– Macy’s (M): Slumped 12% after cutting its annual profit forecast due to weak demand expectations for the holiday shopping season .
Market Outlook
Despite the overall bullish sentiment, some analysts urge caution. Mark Hackett, chief of investment research at Nationwide, notes, “While seasonality and technical tailwinds are supportive through year-end, investors are likely to be more discerning and selective next year as risk and reward are scrutinized” .
As the market continues to reach new heights, investors are advised to stay informed about economic indicators, corporate earnings, and policy decisions that could influence market direction in the coming weeks and months.
The stock market’s performance today reflects growing confidence in the U.S. economy’s strength and the potential for a more accommodative monetary policy. However, as always, investors should remain vigilant and diversified in their approach to navigate potential volatility in this dynamic market environment.
