Market Recap: Stocks Retreat from Records as Nvidia Falters and Inflation Data Looms
Major Indexes Close Lower Amid Tech Sector Weakness
On Monday, December 9, 2024, U.S. stock markets retreated from their recent record highs, with all major indexes closing in negative territory. The pullback was primarily driven by weakness in the technology sector, particularly a significant drop in Nvidia’s stock price.
The Dow Jones Industrial Average fell 240.59 points, or 0.5%, to close at 44,401.93. The S&P 500 declined 37.42 points, or 0.6%, ending the session at 6,052.85, while the Nasdaq Composite dropped 123.08 points, or 0.6%, to finish at 19,736.69.
Tech Giants and Market Movers
Nvidia (NVDA) was the day’s biggest loser among major tech stocks, tumbling nearly 3% following news that China is investigating the chip giant for potential antitrust violations. This development weighed heavily on the broader technology sector.
Despite the overall market decline, some notable stocks bucked the trend:
1. Apple (AAPL) rose 1.36% to $246.14, marking its 21st record close of the year.
2. Amazon (AMZN) gained 0.5%, flirting with a new all-time high before retreating slightly.
3. Hershey (HSY) surged nearly 11% amid takeover rumors, with reports suggesting Mondelez International (MDLZ) is considering an acquisition.
Upcoming Market Events and Economic Data
Investors are closely watching for upcoming economic data releases that could influence market sentiment and Federal Reserve policy decisions:
1. Inflation Data: The Consumer Price Index (CPI) report for November is scheduled for release later this week, which could impact expectations for future interest rate cuts.
2. Federal Reserve Meeting: The CME FedWatch tool currently shows an 86% probability that the central bank will cut the Fed funds rate by another 25 basis points in December, potentially bringing the total reduction to 1% in 2024.
Sector Performance and Market Breadth
Sector performance was mixed, with Consumer Discretionary and Communication Services showing strength, while Energy and Utilities sectors faced pressure. The CBOE Volatility Index (VIX) decreased 5.7% to 12.77, indicating relatively low market fear.
Market breadth was slightly positive, with advancing issues outnumbering decliners on both the NYSE and Nasdaq, despite the overall index declines.
International Markets and Commodities
In international news, stocks in Hong Kong jumped after top Chinese leaders agreed on a “moderately loose” monetary policy, potentially signaling support for economic growth.
Oil prices rose, with U.S. crude climbing to near $68.10 a barrel. Gold also saw gains, reflecting ongoing geopolitical uncertainties.
Looking Ahead: Market Expectations
As we move further into December, market participants will be focusing on:
1. The potential for a year-end rally, often referred to as the “Santa Claus rally.”
2. Upcoming earnings reports from key companies, including C3.ai and MongoDB.
3. The impact of potential interest rate cuts on various sectors and overall market performance.
Why was the market up today? While the major indexes closed lower, there were pockets of strength, particularly in consumer staples and some tech giants. The market’s recent rally has been driven by optimism surrounding potential interest rate cuts and strong corporate earnings.
As we approach the end of 2024, investors should remain vigilant, keeping an eye on economic data releases, Fed policy decisions, and individual stock performances that could shape market trends in the coming weeks.
