Stock Market Today: Indexes Dip Ahead of Crucial Inflation Data
Market Overview: December 10, 2024
As of Tuesday, December 10, 2024, the U.S. stock market is experiencing a slight downturn, with major indexes settling lower ahead of crucial inflation data set to be released tomorrow. Investors are closely watching these developments, as they could significantly impact the Federal Reserve’s monetary policy decisions.
Major Index Performance
The three major U.S. stock market indexes closed in negative territory on Monday, setting a cautious tone for Tuesday’s trading:
– S&P 500 (SPY): Closed at 6,052.85, down 0.6%
– Dow Jones Industrial Average (DIA): Finished at 44,401.93, falling 0.5% or 240.59 points
– Nasdaq Composite (QQQ): Ended at 19,736.69, declining 0.6% or 123.08 points
Key Factors Influencing the Market
1. Anticipation of Inflation Data: Investors are eagerly awaiting the November Consumer Price Index (CPI) report, scheduled for release on Wednesday. Economists expect the CPI to tick up slightly to 2.7% year-over-year, from 2.6% in October. The core CPI, excluding food and energy, is anticipated to remain steady at 3.3% .
2. Federal Reserve Interest Rate Expectations: Market participants are hopeful for another reduction in the benchmark lending rate in December. The CME FedWatch tool currently shows an 86% probability of a 25 basis point cut, potentially bringing the total reduction to 1% in 2024 .
3. Geopolitical Tensions: Heightened risks in the Middle East, particularly the recent toppling of Bashar Al-Assad’s government in Syria, are contributing to market uncertainty .
4. Chinese Monetary Policy Shift: The Chinese Politburo’s announcement of a “moderately loose” monetary policy strategy for the coming year has provided some support to global equity markets .
Notable Stock Movements and Corporate News
1. M&A Activity: Omnicron Group has agreed to buy Interpublic Group (IPG) in a deal valued at $13.3 billion, excluding debt. Additionally, Mondelez International (MDLZ) is reportedly exploring an acquisition of Hershey Co. (HSY), causing HSY shares to jump 10.9% .
2. Tech Sector: Major tech stocks are facing pressure, with companies like NVIDIA Corporation (NVDA) experiencing declines.
3. Health Insurance Rally: Previously beaten-down health insurance stocks saw gains, with Molina Healthcare (MOH), Centene (CNC), and Elevance Health (ELV) closing up more than 3%. UnitedHealth Group (UNH) also rose by 2% .
4. Macy’s (M): The retailer’s stock closed up more than 1% following reports that activist investor Barington Capital has built a position in the company and plans to push for changes .
5. SolarEdge Technologies (SEDG): Shares soared 11.7% after the company announced it has started shipping domestically produced batteries .
6. Workday (WDAY): The stock climbed 5.1% following confirmation that it will be added to the S&P 500 Index later this month .
Upcoming Market Events
1. Earnings Reports: Key companies reporting earnings on December 10 include AutoZone (AZO), Ferguson Enterprises (FERG), GameStop (GME), and Ollie’s Bargain Outlet Holdings (OLLI) .
2. Economic Data: All eyes are on the November CPI report, which will be crucial in determining the Federal Reserve’s next moves regarding interest rates.
Market Outlook
As we move further into December, the stock market remains sensitive to inflation data and Federal Reserve policy decisions. The upcoming CPI report will be pivotal in shaping investor sentiment and potentially influencing the Fed’s approach to interest rates in the near term.
Investors should also keep an eye on geopolitical developments, particularly in the Middle East, as well as ongoing M&A activity, which could provide opportunities in specific sectors. As always, it’s advisable to maintain a diversified portfolio and stay informed about both macroeconomic trends and individual company performances.
Remember, while short-term market fluctuations can be unsettling, focusing on long-term investment goals and strategies often yields the best results in the dynamic world of stock market investing.
