Market Recap: Nasdaq Hits Record High as Fed Meeting Looms
Major Indexes Performance
As of Monday, December 16, 2024, the U.S. stock market showed mixed performance across major indexes. The Nasdaq Composite hit a new all-time high, crossing the 20,000-point mark for the first time in history. The tech-heavy index was up 1.2% in recent trading, continuing its impressive four-week winning streak.
The S&P 500 also showed positive momentum, rising 0.5% and approaching its own record high. However, the Dow Jones Industrial Average (DJIA) was down 0.1%, potentially marking its eighth consecutive day of losses. The Dow’s recent performance contrasts with its peers, having gained 16% year-to-date compared to the Nasdaq’s 34% surge.
Upcoming Market Events
The most significant event on investors’ radar this week is the two-day Federal Reserve policy meeting, starting Tuesday, December 17. Market watchers are keenly anticipating the Fed’s decision on interest rates, with widespread expectations of a rate cut. This would follow similar moves in September and November.
Investors will be paying close attention not only to the rate decision but also to the Fed officials’ commentary on the economy’s health and the outlook for rates in 2025. The yield on 10-year Treasuries, currently holding steady at around 4.40%, will be a key indicator to watch as it correlates with interest rate expectations.
Major Stock News and Movements
Several notable stocks made headlines on Monday:
1. Broadcom (AVGO): The chipmaker saw a remarkable near-10% gain, joining the exclusive club of companies with a market capitalization exceeding $1 trillion following a strong earnings report.
2. Tesla (TSLA): The electric vehicle giant’s stock surged 5% to a new record high after Wedbush raised its price target.
3. MicroStrategy (MSTR): Shares rose 6% as bitcoin surged to a record high of $107,400. The company will be included in the Nasdaq 100 Index starting next Monday.
4. Super Micro Computer (SMCI): The stock dropped 7% following news of its removal from the Nasdaq 100 and reports of potentially raising capital.
5. Honeywell International (HON): Shares advanced nearly 3% as the company announced it is considering spinning off its aerospace unit.
Other tech giants like Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), and Meta Platforms (META) also saw gains, while Nvidia (NVDA) experienced a 2% drop.
Cryptocurrency and Commodities
The cryptocurrency market saw significant action, with bitcoin surging to $107,400, marking a 50% gain since the recent presidential election. Investors are optimistic about potential crypto-friendly policies from the incoming Trump administration.
In the commodities market, gold futures remained stable at around $2,670 an ounce, while crude oil futures dipped by approximately 0.5%.
Market Outlook
As we approach the end of 2024, the U.S. stock market remains robust, with major indices near record highs. However, some analysts, including U.S. Equity Strategist Mike Wilson, advise investors to prepare for potential volatility and even a market correction in the near future.
The divergence between the performance of large-cap tech stocks and the broader market suggests a narrowing foundation for the current rally. This situation, coupled with the upcoming Fed decision and global economic factors, indicates that investors should remain vigilant and prepared for potential market fluctuations as we move into 2025.
