Stock Market Today: Investors Eye Fed Decision as Markets Slide
Market Overview: Why Is the Market Down Today?
As of Wednesday, December 18, 2024, the stock market is experiencing a downturn, with major indexes sliding as investors anxiously await the Federal Reserve’s interest rate decision. The Dow Jones Industrial Average has extended its losing streak to nine consecutive days, marking its longest decline since 1978 . This recent pullback comes after a robust post-election rally that saw stocks hitting record highs.
Current Performance of Major Market Indexes
– S&P 500 (SPX): Down 0.4% to 6,050.61
– Nasdaq Composite (COMP): Fell 0.3% to 20,109.06
– Dow Jones Industrial Average (DJIA): Dropped 0.6% to 43,449.90
Despite the recent dip, it’s worth noting that the S&P 500 has surged an impressive 27% in 2024, potentially setting up for one of its best performances this century .
Upcoming Market Events: All Eyes on the Federal Reserve
The most significant event impacting the market today is the Federal Reserve’s two-day policy meeting, which began on December 17. Investors are eagerly anticipating the Fed’s decision on interest rates, expected to be announced at 11:00 AM ET on December 18 .
Key points to watch:
1. Interest Rate Decision: The market widely expects the Fed to cut its benchmark interest rate, following cuts in September and November.
2. Economic Projections: The Fed will release updated long-term economic projections, providing crucial insights into their outlook for 2025.
3. Rate Cut Expectations: The futures market is currently pricing in three quarter-point cuts by December 2025, with some analysts predicting even more aggressive cuts .
Major Stock News and Market Movers
1. Tesla (TSLA): Shares are up 4% amid optimism about the company’s prospects under a potential Trump administration, given CEO Elon Musk’s relationship with the president-elect .
2. Nvidia (NVDA): The AI investor favorite has slipped into correction territory, down 3% in early trading .
3. Broadcom (AVGO): The chipmaker’s stock fell 5%, giving back some of its recent gains following strong earnings .
4. UnitedHealth Group (UNH): Has been a significant drag on the Dow, contributing about 750 points to its recent 1,564-point drop .
5. Other notable movers: Amazon (AMZN) is losing ground, while Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), and Meta Platforms (META) are showing gains .
Market Breadth and Sector Performance
The recent market performance has been characterized by narrowing breadth:
– For 12 consecutive days, declining stocks in the S&P 500 have outnumbered gainers, the longest streak on record since at least 1999 .
– Only 40.6% of S&P 500 stocks are trading above their 50-day moving averages, the lowest reading since May .
– Financials in the S&P 500 are down 4.4% since the start of December, with utilities and energy sectors performing even worse .
Looking Ahead: What’s Next for the Stock Market?
As investors digest the Fed’s decision and economic projections, market volatility may persist. Key factors to watch include:
1. Inflation trends: Recent data shows inflation reaccelerating, which could impact the Fed’s rate cut plans.
2. Economic growth: The economy has shown stronger-than-expected performance, with GDP increasing 2.8% in the third quarter .
3. Labor market conditions: Unemployment remains lower than previously forecast, potentially influencing the Fed’s decisions.
In conclusion, while the stock market is currently experiencing some turbulence, the overall performance in 2024 has been strong. Investors should stay tuned to the Federal Reserve’s announcements and continue monitoring key economic indicators for insights into future market trends.
