Stock Market Today: All Eyes on Fed as S&P 500 Nears Record High
Market Snapshot: Indexes Poised for Gains Ahead of Fed Decision
The stock market is set for a potentially pivotal day on Wednesday, December 18, 2024, as investors eagerly await the Federal Reserve’s final policy decision of the year. The S&P 500 (^GSPC) has surged 27% in 2024, putting the index on track for one of its best performances of the 21st century and nearing record highs.
As of the market open, futures indicate a positive start:
– S&P 500 Futures: Up 0.26%
– Dow Jones Industrial Average Futures: Up 0.28%
– Nasdaq Composite Futures: Up 0.13%
Fed Decision: The Main Event
The Federal Reserve’s announcement at 11:00 AM ET is the day’s most anticipated event. While no change to the current interest rate is expected, investors will be closely analyzing the Fed’s updated economic projections for 2025.
The futures market is currently pricing in three quarter-point rate cuts by December 2025. However, some Wall Street analysts are even more optimistic:
– Goldman Sachs (GS) expects three quarter-point cuts by March 2025
– JPMorgan Chase (JPM) anticipates five quarter-point cuts by December 2025
These projections may prove optimistic, given recent inflation data. If the Fed’s outlook shows fewer rate cuts than investors expect, it could lead to market volatility.
Major Stock Movers and News
Several stocks are making significant moves in early trading:
1. Nvidia (NVDA): Down 1.22%, continuing its recent correction despite leading the AI revolution with its Blackwell chip.
2. Tesla (TSLA): Up 3.64%, extending its post-election rally on optimism about CEO Elon Musk’s relationship with the incoming administration.
3. Rigetti Computing (RGTI): Surging 32.03%, leading the day’s top gainers.
4. Teva Pharmaceutical Industries (TEVA): Up 26.47% on positive news.
5. Pfizer (PFE): Gaining 4.67%, showing signs of recovery.
Upcoming Market Events
Beyond the Fed decision, investors should keep an eye on these upcoming events:
1. MBA 30-Year Mortgage Rate (December 18, 7:00 AM EST)
2. Mortgage Market Index (December 18, 7:00 AM EST)
3. Several company earnings reports scheduled throughout the week
Market Outlook for 2025
Despite potential short-term volatility, the outlook for the Indian stock market in 2025 remains positive. ITI Mutual Fund suggests the market will stay buoyant, highlighting five sectors and themes for investors to consider.
Key Factors to Watch
As we move towards 2025, investors should keep a close eye on:
1. Inflation trends and their impact on Fed policy
2. Corporate earnings, especially in the technology sector
3. Global economic indicators and geopolitical developments
4. The continued evolution of AI and its impact on various industries
Conclusion: A Pivotal Moment for Markets
Today’s Federal Reserve decision and economic projections could set the tone for market performance heading into 2025. While the S&P 500’s impressive 2024 gains have been driven by rate cut expectations, any deviation from these expectations could lead to significant market movements.
Investors should remain vigilant and diversified, considering both the opportunities and risks present in this dynamic market environment. As always, it’s crucial to align investment strategies with individual financial goals and risk tolerance.
Stay tuned for updates as this pivotal trading day unfolds, potentially shaping the market’s direction for months to come.
