Market Recap: Wall Street Slips as Investors Await Crucial Inflation Data
Major Indexes Close Lower Amid Cautious Trading
On Tuesday, December 10, 2024, U.S. stock markets experienced a rare back-to-back loss as investors exercised caution ahead of Wednesday’s crucial inflation report. The S&P 500 (^GSPC) dipped 0.3% to close at 6,034.91, while the Dow Jones Industrial Average (^DJI) fell 154.10 points, or 0.3%, to 44,247.83. The tech-heavy Nasdaq Composite (^IXIC) also slipped 0.3%, ending the session at 19,687.24 .
This cautious sentiment comes as market participants eagerly await the latest consumer inflation data, which could significantly influence the Federal Reserve’s decision on interest rates at its upcoming meeting next week.
Key Market Movers and Corporate News
Several notable stocks made significant moves during the trading session:
1. Oracle (ORCL): The tech giant’s shares plummeted 6.7% after reporting quarterly growth that fell slightly short of analysts’ expectations. Despite record demand for its AI-related cloud infrastructure business, the high expectations set by the stock’s 80% year-to-date gain led to a sell-off .
2. Alaska Air Group (ALK): The airline’s stock soared 13.2% after raising its profit forecast for the current quarter, citing stronger-than-expected holiday travel demand. The company also announced plans to buy back up to $1 billion of its stock and launch new services from Seattle to Tokyo and Seoul .
3. Boeing (BA): Shares climbed 4.5% following the announcement that the company is resuming production of its bestselling 737 Max plane after a seven-week strike .
4. The Hershey Co. (HSY): The chocolate maker’s stock jumped 10.9% on news that Mondelez International (MDLZ) is considering acquiring the company .
5. NVIDIA (NVDA): The AI chip giant’s stock fell 2.6% after Chinese regulators opened an investigation into the company over possible antitrust violations related to its acquisition of Mellanox .
Upcoming Market Events and Economic Indicators
Investors are closely watching two critical events that could significantly impact market direction:
1. Consumer Inflation Report: Wednesday’s update on consumer inflation is the most anticipated economic data this week. Economists expect it to show similar increases as the previous month .
2. Federal Reserve Meeting: The Fed’s upcoming meeting next week is drawing attention, with many investors expecting the year’s third cut to interest rates. The CME FedWatch tool currently shows an 86% probability of a 25 basis point cut in December, potentially bringing the total reduction in the Fed fund rate to 1% in 2024 .
Market Sentiment and Future Outlook
Despite the recent pullback, the S&P 500 remains on track for one of its best years of the millennium. The anticipation of interest rate cuts has been a significant driver of the market’s performance this year .
However, investors remain cautious due to ongoing concerns:
1. U.S.-China Trade Tensions: Market participants continue to monitor the implications of trade disputes on major tech stocks .
2. Inflation Trajectory: The gradual reduction in inflation rates and solid U.S. economic fundamentals are fueling hopes for a “soft landing” .
3. Sector Performance: Nine out of 11 broad sectors of the S&P 500 ended in negative territory, with Financials, Communication Services, and Utilities experiencing notable declines .
As we approach the end of 2024, market volatility may persist as investors digest new economic data and adjust their expectations for 2025. The upcoming inflation report and Fed decision will likely set the tone for market sentiment in the near term.
Looking Ahead
With the holiday season approaching and the year coming to a close, investors will be closely monitoring consumer spending patterns, retail sales data, and any surprises in corporate earnings. The interplay between economic indicators, Fed policy, and geopolitical developments will continue to shape market dynamics as we move into the new year.
