Market Recap: Tech Stocks Drive S&P 500 to New Heights on December 2, 2024
Major Indexes Close Mixed as Tech Sector Shines
The U.S. stock market kicked off December with a mixed performance on Monday, December 2, 2024, as technology stocks propelled the S&P 500 to another record high. The S&P 500 rose 0.2% to close at 6,047.15, marking its 54th record high of the year. Meanwhile, the Dow Jones Industrial Average fell 0.3% to 44,782.00, and the tech-heavy Nasdaq Composite gained 1% to finish at 19,403.95.
Tech Giants and AI-Related Stocks Lead the Charge
The day’s rally was largely driven by technology and artificial intelligence (AI) related stocks. Super Micro Computer (SMCI) was the standout performer, soaring 28.7% after an internal investigation found no evidence of misconduct by its management or board. The company, which makes servers used in AI technology, also announced plans to strengthen its governance.
Other tech giants contributed significantly to the market’s gains:
– Microsoft (MSFT) rose 1.8%
– Meta Platforms (META) climbed 3.2%
– Amazon (AMZN) advanced 1.4%, benefiting from expectations of record-breaking Cyber Monday sales
Market Movers and Sector Performance
While tech stocks shone, other sectors and companies faced challenges:
– Intel (INTC) initially gained but closed down 0.5% following the announcement of CEO Pat Gelsinger’s retirement
– PG&E (PCG) dropped 5% after announcing plans to sell $2.4 billion in stock and preferred shares
– Retailers showed mixed results, with Target (TGT) falling 1.2% and Walmart (WMT) rising 0.2%
Economic Data and Upcoming Events
Investors digested new economic data, including a report showing that the U.S. manufacturing sector contracted again in November, albeit less than economists expected. This information comes ahead of a crucial week for economic indicators:
– October job openings report (Tuesday)
– Weekly unemployment benefits data (Thursday)
– November jobs report (Friday)
These reports are expected to provide insights into the labor market’s health and potentially influence the Federal Reserve’s future policy decisions.
Global Market Influences
International markets also played a role in shaping investor sentiment:
– Chinese stocks led global gains, with the Shanghai Composite rising 1.1%, boosted by improving manufacturing conditions
– European markets were mixed, with Germany’s DAX gaining 1.6% while France’s CAC 40 remained largely unchanged
Looking Ahead: Key Factors to Watch
As we move further into December, several factors are likely to influence market dynamics:
1. Job Market Data: Friday’s nonfarm payrolls report will be crucial in assessing the labor market’s strength and potential implications for Fed policy.
2. Federal Reserve Outlook: Investors are closely monitoring economic indicators for clues about potential interest rate cuts in 2025.
3. Holiday Shopping Season: Early indicators from Black Friday and Cyber Monday will provide insights into consumer spending trends.
4. Geopolitical Developments: President-elect Trump’s recent threats of tariffs against developing economies could impact global trade relations.
5. Earnings Reports: As the year-end approaches, any significant earnings announcements could sway market sentiment.
Conclusion
The market’s performance on December 2, 2024, reflects a continuing trend of tech-driven growth amidst a complex economic landscape. As Mark Hackett, chief of investment research at Nationwide, noted, “We now find ourselves in the middle of this Goldilocks zone, where economic health supports earnings growth while remaining weak enough to justify potential Fed rate cuts.” Investors will be closely watching the upcoming economic data releases and global developments to gauge the market’s direction in the final month of 2024.
