Stock Market Today: Nasdaq Hits 20,000 as Tech Rally Continues
Market Performance and Key Indexes
On Thursday, December 12, 2024, the stock market is showing mixed performance as investors digest recent inflation data and anticipate the Federal Reserve’s upcoming decision on interest rates. The tech-heavy Nasdaq Composite reached a significant milestone yesterday, surpassing the 20,000 mark for the first time in history, driven by a strong rally in major technology stocks.
As of the latest update, futures for the major indexes are slightly lower:
– S&P 500 futures are down 0.2%
– Dow Jones Industrial Average futures have slipped 0.2%
– Nasdaq 100 futures are down 0.3%
Despite this minor pullback, the overall market sentiment remains positive, with both the S&P 500 and Nasdaq hovering near their all-time highs. The recent surge in stock prices has been fueled by investor enthusiasm for artificial intelligence technologies and expectations of potential interest rate cuts by the Federal Reserve.
Inflation Data and Fed Rate Cut Expectations
The Consumer Price Index (CPI) report released yesterday showed that inflation rose 0.3% month-over-month in November, matching economists’ expectations. The annual inflation rate stood at 2.7%, also in line with estimates. Core inflation, which excludes volatile food and energy prices, came in at 3.3% year-over-year, as anticipated.
This in-line inflation reading has bolstered market confidence that the Federal Reserve will cut interest rates at its upcoming meeting. According to the CME FedWatch tool, there is now a 99% probability of a quarter-point rate cut in December, up from 86% before the CPI data release.
Upcoming Market Events
Investors are closely watching several key events that could impact market performance in the coming days:
1. Producer Price Index (PPI) Release: The PPI report for November is due today, providing further insights into inflationary pressures at the wholesale level.
2. Federal Reserve Policy Meeting: The Fed’s decision on interest rates, expected next week, will be crucial in determining market direction.
3. Initial Jobless Claims: Today’s release of weekly jobless claims data will offer more information on the state of the labor market.
4. Earnings Reports: Major companies like Broadcom, RH (formerly Restoration Hardware), and Costco Wholesale are set to report their earnings after the market close today.
Major Stock News and Movers
Several stocks are making headlines and experiencing significant price movements:
– Adobe (ADBE): Shares plunged nearly 10% in pre-market trading following a disappointing revenue forecast, highlighting challenges in monetizing AI investments.
– GameStop (GME): The video game retailer saw a 5.2% gain after reporting a profit for the third quarter, attributed to cost-saving efforts.
– Broadcom (AVGO): The stock jumped 3.5% following reports that Apple is developing its first AI-focused server chip with the company.
– Macy’s (M): The department store chain slumped 12% after cutting its annual profit forecast due to weak demand expectations for the holiday shopping season.
– Tesla (TSLA): The electric vehicle maker’s stock rose 1.8% in early trading, continuing its strong performance this year.
Market Outlook and Investor Sentiment
The stock market’s performance in 2024 has been largely positive, with both the S&P 500 and Nasdaq reaching new heights. This bullish trend has been supported by several factors, including the artificial intelligence boom, expectations of Fed rate cuts, and the aftermath of former President Donald Trump’s election victory in November.
However, some analysts caution that current valuations are elevated, with expectations running high. As we approach the end of the year, investors may become more discerning and selective in their investment choices, carefully weighing risks and rewards in this dynamic market environment.
In conclusion, while the stock market today shows some signs of consolidation, the overall trend remains positive. Investors will be closely monitoring upcoming economic data, Fed decisions, and corporate earnings to gauge the market news today and determine why the market is up today or potentially facing headwinds in the near future.
