Stock Market Today: Investors Await Fed Decision as Dow Rides 9-Day Losing Streak
Market Indexes: A Mixed Picture
As of Wednesday, December 18, 2024, the U.S. stock market presents a mixed picture, with investors eagerly anticipating the Federal Reserve’s final rate decision of the year. The Dow Jones Industrial Average (DJIA) enters trading on a nine-day losing streak, the longest stretch of consecutive daily declines for the blue-chip index since 1978 . Despite this recent slump, which equates to nearly 1,600 points, the Dow is still up 15% in 2024, currently trading at 43,594.69, up 0.33% .
The S&P 500 and Nasdaq Composite are showing more resilience, with both averages up for the month. The S&P 500 is currently at 6,053.21, up 0.04%, while the Nasdaq stands at 20,106.53, down slightly by 0.01% . Year-to-date, the S&P 500 has surged an impressive 27%, while the Nasdaq Composite has jumped 34%, significantly outperforming the Dow due to their larger exposure to mega-cap tech companies .
Upcoming Market Events: All Eyes on the Fed
The most significant event on today’s economic calendar is the Federal Reserve’s rate decision, expected at 2:00 PM ET. Markets are widely anticipating a 25 basis point reduction in interest rates, which would bring the target range to 4.25% to 4.5% . However, the rate cut itself is not the only focus for investors.
Traders will be closely watching the Fed’s summary of economic projections (SEP), which includes the “dot plot” of rate projections, as well as comments from Fed Chair Jerome Powell. These will provide crucial insights into the potential rate path for 2025 . Some analysts, like those at ING, suggest that the prospect of fiscal stimulus among other policies promised by U.S. President-elect Donald Trump may force some scaling back in expected rate cuts included in dot plot projections .
Major Stock News: Tech Giants and Market Movers
In the realm of individual stocks, several companies are making headlines:
1. Nvidia (NVDA): The AI giant is up over 3% in premarket trading after hitting a two-month low on Tuesday. The stock is currently trading at $135.10, up 3.61% .
2. Tesla (TSLA): After rising over 14% in the last three sessions, Tesla has dropped 2.8% in premarket trading .
3. Birkenstock (BIRK): The company’s stock edged lower after forecasting fiscal 2025 revenue growth below market expectations .
4. Crypto-focused stocks: As bitcoin fell 2%, stocks like MARA Holdings (MARA) and Riot Platforms (RIOT) are down 1.8% and 2.4% respectively .
5. Quantum Computing Inc. (QUBT) and D-Wave Quantum Inc. (QBTS): These stocks are among the top gainers, up 35.72% and 19.64% respectively .
Market Outlook: Cautious Optimism Amid Uncertainty
As we approach the end of 2024, the stock market remains poised for a strong finish despite recent volatility. The S&P 500’s 27% gain puts the index on track for one of its best performances of the 21st century . However, investors should remain cautious as the Fed’s decision and guidance could significantly impact market sentiment.
The recent reacceleration of inflation, with the Consumer Price Index (CPI) reaching 2.7% in November, adds another layer of complexity to the Fed’s decision-making process . This economic backdrop, coupled with a stronger-than-expected labor market, may influence the Fed to adopt a more cautious stance on rate cuts in 2025.
As we navigate these uncertain waters, investors should keep a close eye on key technical levels. For the Dow, major support levels to watch are around 43,300, 41,600, and 40,000, while the 45,000 level remains a significant overhead resistance area .
In conclusion, while the stock market today presents a mixed picture, the upcoming Fed decision will likely set the tone for market performance in the near term. Investors should stay informed about market news today and remain prepared for potential volatility as we close out a remarkable year in the financial markets.
