Market Recap: S&P 500 and Nasdaq Edge Higher, Dow Slips in Holiday-Shortened Week
Major Indexes Performance
As the holiday-shortened week kicked off on Monday, December 23, 2024, U.S. stock markets showed mixed performance. The S&P 500 and Nasdaq Composite managed to eke out gains, while the Dow Jones Industrial Average slipped slightly. Here’s a breakdown of the major index movements:
– S&P 500 (^GSPC): Up 0.73% to 5,974.07
– Nasdaq Composite (^IXIC): Rose 0.98% to 19,764.89
– Dow Jones Industrial Average (^DJI): Gained 0.16% to 42,906.95
– Russell 2000 (^RUT): Fell 0.22% to 2,237.44
Key Market Drivers and Stock Movers
Several factors contributed to today’s market movements:
1. Tech Sector Strength: Large technology companies, particularly chip manufacturers, helped support the gains in the S&P 500 and Nasdaq. Nvidia Corporation (NVDA) saw a 3.69% increase, while Broadcom Inc. (AVGO) also posted significant gains.
2. Automotive Industry Developments: Honda Motor Co., Ltd. (HMC) shares surged 12.73% following news of potential talks about a combination with Nissan Motor Co., Ltd. (NSANY) and possibly including Mitsubishi Motors Corporation (MMTOF).
3. Healthcare Sector News: Eli Lilly and Company (LLY) saw its stock rise after the U.S. Food and Drug Administration approved its weight-loss drug Zepbound for treating obstructive sleep apnea in adults.
4. Semiconductor Industry Update: Qualcomm Incorporated (QCOM) shares increased by 1.7% after winning a legal battle against Arm Holdings plc (ARM) regarding chip licensing.
5. Retail Sector Challenges: Walmart Inc. (WMT) experienced a 3.3% drop in share price following accusations from the U.S. consumer finance watchdog regarding junk fees imposed on delivery drivers.
Upcoming Market Events
As we move through this holiday-shortened week, investors should keep an eye on the following:
1. Holiday Trading Schedule: The stock market will close early on Tuesday, December 24, and remain closed on Wednesday, December 25, for Christmas.
2. Potential “Santa Claus Rally”: Historically, the last five trading days of the year and the first two of the following year have yielded an average S&P 500 gain of 1.3%, known as the “Santa Claus Rally.”
3. Federal Reserve Policy Outlook: Investors continue to digest the Federal Reserve’s recent projections for interest rate cuts in 2025, with markets currently expecting approximately two 25-basis-point reductions.
4. Economic Data Releases: While the economic calendar is light this week, traders will be watching for any surprise announcements or data that could impact market sentiment.
Market Sentiment and Outlook
Despite the recent rally, market sentiment remains cautious as investors grapple with the Federal Reserve’s less dovish stance on rate cuts for 2025. The cooler-than-expected inflation report released on Friday helped stocks recoup some losses, but overall market dynamics suggest a period of consolidation may be ahead.
Trading volumes are expected to thin in the coming days due to the holiday season, which could lead to increased volatility. As we approach the end of the year, market participants will be closely monitoring any developments that could impact the potential “Santa Claus Rally” and set the tone for early 2025 trading.
In conclusion, while the market showed resilience on Monday with tech stocks leading the way, investors remain cautious about the pace of future rate cuts and potential economic headwinds. As we enter the final trading days of 2024, all eyes will be on whether the traditional year-end rally materializes and how it might shape market momentum heading into the new year.
