Market Recap: S&P 500 and Nasdaq Edge Higher, Inflation Data Looms
The U.S. stock market showed mixed performance on Tuesday, December 10, 2024, as investors cautiously positioned themselves ahead of crucial inflation data due Wednesday. The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) managed to eke out small gains, while the Dow Jones Industrial Average (^DJI) slipped slightly.
Market Performance
As of the market close:
– The S&P 500 rose 0.10% to 6,058.82
– The Nasdaq Composite gained 0.53% to 19,842.24
– The Dow Jones Industrial Average fell 0.18% to 44,319.92
The day’s trading was characterized by cautious optimism, with investors balancing recent market highs against upcoming economic data releases.
Key Drivers and Stock Movements
Technology stocks led the day’s gains, with several notable movements:
1. Alphabet (GOOGL, GOOG) shares surged approximately 5% after the company announced breakthroughs in quantum computing with its new Willow quantum chip.
2. NVIDIA Corporation (NVDA) saw its stock rise 1.49% to $140.88, despite news of an investigation by Chinese regulators into possible antimonopoly law violations.
3. Oracle (ORCL) experienced a significant drop of 8.61% following lower-than-expected quarterly earnings and revenue reports.
4. Other tech giants like Meta (META), Microsoft (MSFT), and Amazon (AMZN) posted slight gains.
In the chip sector, Taiwan Semiconductor Manufacturing Company (TSM) reported a 34% jump in November sales, highlighting strong AI demand. However, its stock, along with other chip manufacturers like Broadcom (AVGO) and Micron (MU), faced some downward pressure.
Economic Data and Market Sentiment
The market’s cautious stance was largely due to anticipation of Wednesday’s Consumer Price Index (CPI) report. Investors are looking for further evidence of a “soft landing” for the economy, which could justify expectations of a Federal Reserve rate cut in December.
Key economic data released on Tuesday included:
1. The NFIB Small Business Optimism Index for November, which rose to 101.7, significantly above the previous 93.7 and beating consensus expectations.
2. Nonfarm Productivity for Q3 (final) came in at 2.2%, aligning with consensus but slightly below the previous 2.5%.
3. Unit Labor Costs for Q3 (final) increased by 0.8%, lower than the expected 1.5% but a reversal from the previous -1.1%.
Upcoming Market Events
Investors are closely watching several key events in the coming days:
1. Consumer Price Index (CPI) data release on Wednesday, December 11
2. Producer Price Index (PPI) report on Thursday, December 12
3. Import and Export Prices data on Friday, December 13
Additionally, the market is anticipating earnings reports from notable companies:
– Adobe (ADBE) on Wednesday, December 11
– Costco (COST) and Broadcom (AVGO) on Thursday, December 12
Market Outlook
As the year-end approaches, market participants remain optimistic but cautious. The S&P 500 and Nasdaq are holding near record highs, supported by strong performance in the technology sector and hopes for a dovish pivot from the Federal Reserve.
However, concerns about valuations and potential economic headwinds persist. The upcoming inflation data will be crucial in shaping expectations for the Fed’s monetary policy decisions in the coming months.
Investors are advised to stay vigilant and diversified, keeping an eye on both macroeconomic trends and individual company performances as we head into the final weeks of 2024.
Conclusion
Tuesday’s market performance reflects a delicate balance between optimism in the tech sector and caution ahead of key economic data. As the week progresses, market volatility may increase, driven by inflation figures and high-profile earnings reports. Traders and investors should remain alert to these potential market-moving events in the days ahead.
