Stock Market Today: Mixed Performance Amid Inflation Anticipation
Market Overview: December 11, 2024
As of Wednesday, December 11, 2024, the U.S. stock market is showing mixed performance, with investors eagerly awaiting key inflation data. The market’s recent end-of-year rally has hit resistance, causing major indexes to oscillate between small gains and losses. This cautious sentiment comes as traders brace for the release of November’s Consumer Price Index (CPI), a crucial indicator that could influence the Federal Reserve’s upcoming interest rate decision.
Major Index Performance
The S&P 500 (SPX) is currently trading at 6,034.91, down 0.3% from the previous session. Similarly, the Dow Jones Industrial Average (DJI) has dipped 0.4% to 44,247.83. The tech-heavy Nasdaq Composite (IXIC) is showing slightly more resilience, up 0.2% at 19,687.24. These movements reflect a market that’s taking a breather after reaching record highs last Friday in a post-election rally.
Key Economic Data and Fed Watch
Investors are keenly focused on the upcoming CPI report, scheduled for release later today. Economists polled by Dow Jones expect the inflation gauge to rise 0.3% from October and 2.7% year-over-year. The core CPI, which excludes volatile food and energy prices, is anticipated to increase 0.3% month-over-month and 3.3% from a year ago.
This data is crucial as it’s one of the last major economic releases before the Federal Reserve’s policy meeting on December 18. Currently, Fed funds futures are pricing in a more than 85% likelihood of an interest rate cut at this gathering, according to CME’s FedWatch Tool.
Corporate Earnings and Stock Movements
Several companies have reported earnings, influencing individual stock performances:
1. Oracle (ORCL): The cloud-computing provider’s stock tumbled after reporting lower-than-expected adjusted quarterly earnings and revenue, despite CEO Safra Catz citing “record level AI demand.”
2. Taiwan Semiconductor Manufacturing Co. (TSM): The world’s largest contract chipmaker reported a 34% jump in November sales, driven by strong AI demand. However, its shares slid alongside other chip stocks like Nvidia (NVDA), Broadcom (AVGO), and Micron (MU).
3. Alphabet (GOOGL): Shares jumped after the company unveiled Willow, a quantum computing chip with groundbreaking computational capabilities.
4. G-III Apparel Group Ltd. (GIII) and United Natural Foods Inc. (UNFI) both reported earnings that beat expectations, with their stock prices climbing 10.4% and 20%, respectively.
Sector Performance and Market Breadth
The market is showing mixed sector performance. The Technology Select Sector SPDR (XLK), Real Estate Select Sector SPDR (XLRE), and Materials Select Sector (XLB) experienced declines of 1.4%, 1.6%, and 1% respectively. On the positive side, the Communication Services Select Sector SPDR (XLC) rose 1.8%.
Market breadth indicates a bearish tilt, with decliners outnumbering advancers on the NYSE by a 1.88-to-1 ratio. The Nasdaq showed a similar trend with a 1.61-to-1 ratio favoring declining issues.
Bond Market and Cryptocurrency Update
In the bond market, Treasury yields continued to rise, with the 10-year yield climbing to 4.24%. This increase reflects investors’ evolving expectations regarding interest rates.
The cryptocurrency market saw Bitcoin (BTCUSD) slide to about $96,000, retreating from its recent milestone of crossing $100,000 for the first time last week. The pullback comes amid ongoing enthusiasm for the pro-crypto stance of President-elect Donald Trump and his incoming cabinet.
Looking Ahead: Market Catalysts
As we move forward, market participants will be closely watching several key events:
1. The release of November’s CPI data today
2. The Producer Price Index (PPI) report later this week
3. The Federal Reserve’s policy meeting on December 18
4. Ongoing corporate earnings reports, including Adobe’s results expected after today’s market close
These events will likely shape market sentiment and could potentially influence the direction of stocks as we approach the end of the year. Investors should remain vigilant and prepared for potential market volatility in response to these upcoming economic indicators and policy decisions.
