Market Recap: Wall Street Mixed as Investors Weigh Fed Comments and Earnings
Major Indexes Performance and Key Highlights
On Tuesday, November 19, 2024, the U.S. stock market closed with mixed results as investors digested recent comments from Federal Reserve Chairman Jerome Powell and awaited key earnings reports. The S&P 500 and Nasdaq Composite managed to eke out gains, while the Dow Jones Industrial Average (DJI) ended slightly lower.
Here’s a breakdown of the major index performances:
– S&P 500: Closed at 5,893.62, up 0.4%
– Nasdaq Composite: Finished at 18,791.81, rising 0.6%
– Dow Jones Industrial Average: Fell 0.1% to close at 43,389.60
The market’s performance was influenced by Powell’s recent speech, where he indicated that the central bank is not in a hurry to cut interest rates further. This statement caused a shift in market expectations, with the probability of a December rate cut dropping from 82.5% to 58.4%, according to the CME FedWatch tool.
Sector Performance and Market Breadth
Ten out of eleven broad sectors in the S&P 500 ended in positive territory. Notable gainers included:
– Energy Select Sector SPDR (XLE): Up 1.3%
– Communication Services Select Sector SPDR (XLC): Rose 1%
– Consumer Discretionary Select Sector SPDR (XLY): Gained 0.9%
– Real Estate Select Sector SPDR (XLRE): Increased by 0.9%
– Utilities Select Sector SPDR (XLU): Advanced 0.9%
Market breadth was positive, with advancers outnumbering decliners on the NYSE by a 1.71-to-1 ratio. The CBOE Volatility Index (VIX), often referred to as the fear gauge, fell 4.5% to 15.58, indicating a decrease in market anxiety.
Corporate Earnings in Focus
Walmart (WMT) was a standout performer, climbing 4.2% after beating analysts’ expectations for both profit and revenue. The retail giant reported broad-based strength across categories and raised its full-year forecasts for sales and profit.
In contrast, Lowe’s (LOW) saw its stock drop 3.4% despite topping profit and revenue forecasts. This decline may have been influenced by a report showing a decrease in new home construction starts.
Upcoming Market Events and Earnings Releases
Investors are eagerly anticipating several key earnings reports this week, including:
– Nvidia (NVDA): Set to report on Wednesday, the chip giant’s results are highly anticipated due to its significant role in the AI sector.
– Target (TGT): Also reporting on Wednesday, providing insights into the retail sector.
– Deere & Company (DE): Scheduled to release earnings on Thursday, offering a glimpse into the agricultural equipment market.
These reports are expected to provide valuable insights into various sectors and potentially impact market sentiment.
Global Market Influences and Geopolitical Factors
While U.S. markets showed resilience, European stocks faced pressure due to geopolitical tensions. Reports of Ukraine firing U.S.-made ATACMS missiles at Russia and statements from Russian President Vladimir Putin regarding nuclear weapon use thresholds contributed to investor unease.
This global uncertainty led to a flight to safety, with U.S. Treasury yields declining and gold prices rising. The 10-year Treasury yield fell to 4.37% from 4.41% the previous day.
Looking Ahead: Market Expectations and Fed Policy
Despite the recent hawkish tone from the Federal Reserve, market participants remain optimistic about potential rate cuts in 2024. Current projections suggest a full 1% reduction in interest rates over the course of the year.
As the last significant week of the third-quarter 2024 earnings season unfolds, investors will be closely monitoring corporate results and guidance for signs of economic health and potential market direction.
In conclusion, the market’s mixed performance on November 19, 2024, reflects the complex interplay of Fed policy expectations, corporate earnings, and global geopolitical factors. As investors navigate these waters, the upcoming earnings reports and economic data releases will be crucial in shaping market sentiment and determining the trajectory of stock prices in the near term.
