Stock Market Recap: Dow Slips, Nasdaq Hits Record High as Fed Meeting Begins
Market Performance and Key Events
On Tuesday, December 17, 2024, the U.S. stock market showed mixed performance as investors eagerly awaited the Federal Reserve’s decision on interest rates. The two-day policy meeting, which kicked off today, has kept market participants on their toes, influencing trading patterns across major indexes.
The Dow Jones Industrial Average (DJIA) continued its downward trend, falling 0.6% in early trading. This marks the ninth consecutive day of losses for the blue-chip index, its longest losing streak since June 2018. The S&P 500 also edged lower, dipping 0.4% as the trading session began.
In contrast, the Nasdaq Composite showed resilience, building on its record-breaking performance from the previous day. Despite a slight 0.4% decline in early trading, the tech-heavy index remains near its all-time high, reflecting the ongoing strength in the technology sector.
Why Was the Market Up Yesterday?
The question “why was the market up today?” is particularly relevant when looking at yesterday’s performance. The Nasdaq’s surge to a new record high on Monday was primarily driven by strong performances in the technology and consumer discretionary sectors. Amazon (AMZN) played a significant role, with its shares rising 2.4% as consumer discretionaries gained the most ground in the session.
Major Stock News and Market Movers
Several key stocks are making headlines and influencing market movements:
1. Tesla (TSLA): The electric vehicle giant continues its impressive rally, with shares up 4% in early trading. The stock has surged about 85% year-to-date, boosted by optimism surrounding CEO Elon Musk’s relationship with President-elect Donald Trump.
2. Nvidia (NVDA): The AI chip leader saw its shares decline 3%, extending a recent slump that has pushed the stock into a technical correction.
3. Honeywell International Inc. (HON): Shares rose 3.7% following the announcement that the company is exploring a separation of its aerospace business.
4. Exxon Mobil Corporation (XOM): The energy sector faced headwinds, with Exxon Mobil shares falling 2.2% as energy became the biggest losing sector of the day.
5. Broadcom (AVGO): The chipmaker’s stock slid 5%, giving back some of its recent gains following strong earnings last week.
Upcoming Market Events
The most significant event on investors’ radar is the Federal Reserve’s policy meeting, concluding on Wednesday, December 18. Market participants widely expect the Fed to announce another interest rate cut, following similar moves in September and October. Investors will be closely watching the Fed’s statements for insights into the economic outlook and potential rate trajectories for 2025.
Economic Indicators and Other Factors
1. Treasury Yields: The yield on 10-year Treasuries held steady at 4.40%, reflecting market expectations about future interest rates.
2. Cryptocurrency: Bitcoin reached a new all-time high, trading at $107,830. The cryptocurrency has gained over 50% since the recent election, driven by expectations of crypto-friendly policies from the incoming administration.
3. Commodities: Gold futures dipped 0.5% to $2,650 an ounce, while crude oil futures fell about 1.5%.
4. Retail Sales Data: Investors are awaiting the release of November retail sales data, expected to show a 0.5% monthly increase, providing insights into consumer spending habits.
Market Outlook
As 2024 draws to a close, the stock market remains poised for a strong finish. Despite recent fluctuations, the S&P 500 is on track for its best year since 2019, with a year-to-date gain of over 27%. This performance has been largely driven by technology companies, anticipation of Fed rate cuts, and optimism surrounding President-elect Trump’s corporate policies.
However, investors should remain cautious as they navigate the current market landscape. The outcome of the Fed meeting, upcoming economic data releases, and geopolitical developments could all influence market directions in the short term. As always, maintaining a diversified portfolio and staying informed about market trends will be crucial for investors looking to capitalize on opportunities while managing risks in this dynamic environment.
