Market Recap: S&P 500 and Dow Dip, Nasdaq Gains in Holiday-Shortened Week
Major Indexes Performance
As the holiday-shortened week kicked off on Monday, December 23, 2024, the U.S. stock market experienced mixed performance across major indexes. The S&P 500 and Dow Jones Industrial Average (DJIA) both closed lower, while the Nasdaq Composite managed to eke out gains. Here’s a breakdown of the day’s market performance:
– S&P 500: Closed at 5,925.38, down 0.09% or 5.47 points
– Dow Jones Industrial Average: Fell 0.58% or 247.19 points to 42,593.07
– Nasdaq Composite: Gained 0.27% or 52.79 points, reaching 19,625.38
The day’s trading was characterized by choppy movements and thin volume, typical of the holiday season. Art Hogan, chief market strategist at B Riley Wealth, noted, “It’s a Monday with very few catalysts to drive broad market sentiment, and we’re going to have low volume, likely volatile trading as we work our way out of this year.”
Key Market Drivers
Several factors influenced today’s market performance:
1. Government Shutdown Averted: The U.S. Congress passed a stopgap funding bill over the weekend, narrowly avoiding a government shutdown. This news provided some relief to investors, although its impact on the market was limited.
2. Federal Reserve Rate Cut Expectations: Investors are adjusting their expectations for interest rate cuts in 2025. Money markets now anticipate roughly two 25-basis-point reductions next year, bringing the benchmark rate to a range of 3.75% to 4.0%.
3. Inflation Data: A cooler-than-expected inflation report released on Friday helped U.S. stocks recoup some losses from the previous week. However, overall market sentiment remains cautious.
4. Holiday Trading: With U.S. stock markets closing early on Tuesday and shut for Christmas on Wednesday, trading volumes are expected to thin out, potentially leading to increased volatility.
Notable Stock Movements
Several individual stocks made significant moves on Monday:
– NVIDIA Corporation (NVDA): Gained 1.6%, contributing to the Nasdaq’s positive performance.
– Meta Platforms (META): Rose 1.4%, another tech giant boosting the Nasdaq.
– Apple Inc. (AAPL): The world’s most valuable company inched closer to the $4 trillion market capitalization milestone, with its value standing at $3.84 trillion.
– Qualcomm (QCOM): Shares rose 1.7% after a favorable jury decision in a licensing dispute with Arm Holdings.
– Walmart (WMT): Fell 3.3% following accusations from the U.S. consumer finance watchdog regarding junk fees for delivery drivers.
– Eli Lilly (LLY): Gained 1.7% after FDA approval of its weight-loss treatment for obstructive sleep apnea.
Upcoming Market Events
As we approach the end of the year, investors should keep an eye on the following:
1. “Santa Claus Rally”: Historically, the last five trading days of the year and the first two of the new year have yielded an average S&P 500 gain of 1.3%.
2. Economic Data Releases: While this week is relatively quiet in terms of major economic reports, investors will continue to monitor any data that could influence the Federal Reserve’s future rate decisions.
3. Year-End Portfolio Adjustments: Many fund managers may engage in “window dressing,” adjusting their holdings to improve the appearance of their portfolios before year-end reports.
Market Outlook
As 2024 draws to a close, the market faces a mix of optimism and caution. The recent inflation data has provided some hope for a less aggressive Fed stance in 2025, but concerns about economic growth and geopolitical tensions persist. Investors will be closely watching for signs of the anticipated “Santa Claus Rally” in the coming days.
Thierry Wizman, strategist at Macquarie, summed up the current sentiment: “Overall market sentiment is still cautious.” As we head into 2025, market participants will be keenly focused on the Federal Reserve’s rate path, corporate earnings, and potential shifts in global economic dynamics.
In conclusion, while today’s mixed performance reflects ongoing uncertainties, the market remains resilient as it navigates the complex interplay of economic indicators, policy decisions, and seasonal trends. Investors should stay vigilant and prepared for potential volatility in the short term while keeping an eye on longer-term economic trends shaping the market landscape.
