Market Recap: Why Was the Market Up Today? Stock Market Update for December 18, 2024
S&P 500, Nasdaq, and Dow Jones Performance
On Wednesday, December 18, 2024, the U.S. stock market showed mixed performance as investors eagerly awaited the Federal Reserve’s final interest rate decision of the year. The S&P 500 closed at 6,053.21, up 2.60 points or 0.04%, while the Nasdaq Composite slightly dipped by 0.01% to 20,106.53. The Dow Jones Industrial Average outperformed, gaining 144.79 points or 0.33% to finish at 43,594.69.
Despite the Dow’s positive performance today, it’s worth noting that it had experienced a nine-day losing streak prior to this session, the longest negative run since 1978. However, the index remains just under 4% from its record highs set earlier this month, highlighting the overall resilience of the market.
Federal Reserve Decision and Market Implications
The focal point of today’s trading session was the Federal Reserve’s announcement of its interest rate decision. As widely expected, the Fed delivered a 25 basis point rate cut, bringing the new policy rate range to 4.25-4.5%. This move marks a significant shift in monetary policy and has important implications for the stock market going forward.
Investors are now closely analyzing the Fed’s guidance for 2025 and the updated projections from individual policymakers. The market is particularly interested in how much the Fed might revise its view on future rate cuts, with current market expectations for the end of 2025 rates being around 3.90%, higher than the Fed’s previous projection of 3.4%.
Upcoming Market Events and Economic Indicators
Looking ahead, several key economic events and indicators are on the horizon:
1. Housing Market Data: November housing starts and permits data will be released, providing insights into the real estate sector’s health.
2. Q3 Current Account: This report will offer a comprehensive view of the U.S. economy’s international transactions.
3. Corporate Earnings: Major companies like Micron Technology, Lennar, and General Mills are set to report their earnings, which could influence market sentiment.
Major Stock News and Market Movers
Several stocks made significant moves today, catching investors’ attention:
1. Nvidia (NVDA): The AI giant saw its stock rise over 3% after hitting a two-month low on Tuesday.
2. Tesla (TSLA): The electric vehicle maker’s stock dropped 2.8% following a 14% gain over the previous three sessions.
3. Quantum Computing Inc. (QUBT): Emerged as a top gainer, surging 35.72% to $22.77.
4. D-Wave Quantum Inc. (QBTS): Another quantum computing player, up 19.64% to $10.05.
5. Oklo Inc. (OKLO): The energy sector saw movement with Oklo rising 19.17% to $22.76.
In the automotive sector, a potential merger between Honda (7267.T) and Nissan (7201.T) is making headlines. This move could create a $54 billion company with an annual output of 7.4 million vehicles, positioning it as the world’s third-largest auto group by vehicle sales.
Market Outlook and Investor Sentiment
As we approach the end of 2024, the stock market remains in a delicate balance between optimism for 2025 and caution regarding current economic indicators. The VIX volatility gauge has moved back above 15 this week for the first time in a month, indicating some nervousness in the market.
Treasury yields have also seen an uptick, with the 10-year yield remaining above 4.4%. This movement in bond yields reflects changing expectations about future Fed policy and could continue to influence stock market performance in the coming weeks.
In conclusion, today’s market performance, coupled with the Fed’s decision and guidance, sets the stage for an intriguing end to 2024 and a potentially dynamic start to 2025. Investors should stay alert to upcoming economic data releases and corporate earnings reports, as these will likely play crucial roles in shaping market trends in the near term.
