Stock Market Recap: S&P 500 and Nasdaq Rise as Fed Decision Looms
The U.S. stock market experienced a mixed session on Monday, December 16, 2024, as investors eagerly awaited the Federal Reserve’s final policy decision of the year. The S&P 500 and Nasdaq Composite continued their upward momentum, while the Dow Jones Industrial Average struggled to break its losing streak.
Market Performance
At the closing bell:
– The S&P 500 (^GSPC) rose 22.99 points, or 0.4%, to 6,074.08
– The Nasdaq Composite (^IXIC) surged 247.17 points, or 1.2%, to a record high of 20,173.89
– The Dow Jones Industrial Average (^DJI) slipped 110.58 points, or 0.3%, to 43,717.48
– The Russell 2000 (^RUT) index of smaller companies gained 15.10 points, or 0.6%, to 2,361.99
Why Was the Market Up Today?
The stock market’s positive performance today can be attributed to several factors:
1. Tech Sector Strength: Technology stocks led the way, with companies like Broadcom (AVGO) experiencing gains amid excitement about their artificial intelligence offerings.
2. Anticipation of Fed Rate Cut: Investors are widely expecting a 25 basis point rate cut from the Federal Reserve’s meeting on December 17-18. This anticipation has been driving market optimism.
3. Bitcoin Rally: The cryptocurrency market saw Bitcoin hit a new all-time high above $107,000 before pulling back, which boosted sentiment in related stocks.
4. AI-Related Stocks Surge: Companies involved in artificial intelligence, such as IonQ (IONQ) and SoundHound AI (SOUN), saw significant gains, with IonQ up 23.59% and SoundHound AI rising 16.44%.
Major Stock Movements
Notable stock performances included:
– Tesla (TSLA): Shares rose 6.14% to $463.02
– Alphabet (GOOGL, GOOG): Class C shares gained 3.54% to $198.16
– NVIDIA (NVDA): Despite the tech rally, NVIDIA saw a slight decline of 1.68% to $132.00
– Palantir Technologies (PLTR): The stock remained relatively stable with a minor decrease of 0.42% to $75.75
Upcoming Market Events
Investors are closely watching several key events that could impact the market in the coming days:
1. Federal Reserve Meeting: The Fed’s decision on interest rates, expected on Wednesday, is the most anticipated event. Market participants are pricing in a 95.3% probability of a 25 basis point rate cut.
2. Economic Data Releases: Upcoming reports include the Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge, and November retail sales data, which will provide insights into consumer resilience.
3. Earnings Reports: General Mills (GIS) is set to release its Q2 earnings, which could offer a glimpse into the consumer goods sector’s performance.
Market Outlook
As 2024 draws to a close, the stock market has shown remarkable resilience. The S&P 500 is up 27.3% for the year, while the Nasdaq has surged an impressive 34.4%. However, analysts caution that the market’s direction in the coming year will largely depend on the Fed’s policy decisions and the ability to achieve a “soft landing” for the economy.
Tom Lee, head of research at Fundstrat Global Advisors, remains optimistic about the market’s prospects, citing cooling inflation and the anticipation of interest rate cuts as key drivers for investor bullishness.
As we head into the final weeks of 2024, investors should keep a close eye on the Fed’s commentary, upcoming economic data, and potential year-end portfolio adjustments by institutional investors. The market’s ability to maintain its current momentum will likely hinge on these factors and the ongoing developments in the AI and tech sectors.
In conclusion, while the stock market showed mixed results today, the overall trend remains positive, with technology and AI-related stocks leading the charge. As always, investors are advised to stay informed and maintain a diversified portfolio in the face of potential market volatility.
