Market Recap: S&P 500, Nasdaq, and Dow Jones Close Lower Amid Tech Concerns and Anticipation of Fed Decision
As Tuesday, December 10, 2024, draws to a close, Wall Street experienced a day of mixed performances, with major indexes retreating from recent highs. Investors grappled with geopolitical developments, central bank expectations, and sector-specific news, leading to a cautious sentiment in the market.
Market Performance
The S&P 500 closed at 6,052.85, down 0.6% for the day. The Nasdaq Composite finished at 19,736.69, sliding 0.6%, while the Dow Jones Industrial Average tumbled 0.5% to end at 44,401.93. This pullback comes after three successive weeks of positive closes, highlighting the delicate balance in current market conditions.
Tech Sector Woes
The technology sector faced significant headwinds, with Nvidia Corporation (NVDA) at the forefront of today’s declines. The chip giant’s stock plummeted 2.6% following news that China’s State Administration for Market Regulation has opened an antitrust investigation into the company. This probe, centered around Nvidia’s acquisition of Mellanox and related agreements, has raised concerns about regulatory pressures on U.S. tech firms with substantial exposure to China.
Adding to the tech sector’s troubles, Advanced Micro Devices (AMD) saw its stock fall 3.3% after BofA Global Research downgraded its rating to “neutral” from “buy.” These developments contributed to a 0.3% decline in the semiconductor index.
Upcoming Market Events
All eyes are now on the Federal Reserve’s upcoming meeting scheduled for December 17-18. The CME FedWatch tool currently indicates an 86% probability that the central bank will cut the Fed funds rate by another 25 basis points in December. If realized, this would bring the total reduction in the Fed funds rate to 1% for 2024.
Investors are eagerly awaiting the release of the Consumer Price Index (CPI) data on Wednesday, December 11. This crucial inflation report is among the last major datasets before the Fed meeting and could significantly influence the central bank’s monetary policy path.
Major Stock News
Despite the overall market decline, several stocks made notable moves:
1. Tesla (TSLA) shares increased by 1.2% after the company announced a new, lower-cost battery expected to enhance electric vehicle affordability.
2. Energy stocks rallied alongside oil prices, with Chevron (CVX) and ExxonMobil (XOM) posting gains of 1.1% and 0.9%, respectively.
3. Workday (WDAY) and Apollo Global Management (APO) saw their stocks rise by 8.1% and 3.5%, respectively, following news of their planned inclusion in the S&P 500 index.
4. Interpublic Group (IPG) advanced 9.5% after reports surfaced that marketing conglomerate Omnicom (OMC) was in advanced talks to acquire the advertising company. Omnicom shares, however, were down 6% on the news.
5. U.S.-listed shares of Chinese companies gained after the Chinese Politburo hinted at a shift to looser monetary policy next year. Alibaba (BABA) was up 8%, PDD Holdings (PDD) climbed 11.3%, and Baidu (BIDU) added 7.1%.
Looking Ahead
As we move further into December, market participants remain cautious but optimistic. The upcoming Federal Reserve decision, coupled with key economic data releases, will likely set the tone for the remainder of the year. Investors are advised to stay vigilant and focus on diversification to navigate the complexities of the current economic landscape.
With geopolitical tensions, particularly between the U.S. and China, continuing to simmer, and the global economy showing signs of both resilience and vulnerability, the market’s path forward remains uncertain. However, the potential for a more dovish Fed stance and ongoing corporate innovations provide reasons for cautious optimism as we approach the end of 2024.
