Stocks finished mixed Thursday, with the Dow finally edging into positive territory, as markets extended their reaction to yesterday's surprisingly hawkish Federal Reserve rate decision.
The Dow Jones Industrial Average gained 15.37 points, or 0.04% to end the session at 42,342.24, barely breaking 10-day losing streak, the longest negative run since 1974.
The S&P 500 lost 0.09% to close 5,867.08 and the tech-heavy Nasdaq slipped 0.10% to finish the day at 19,372.77.
“Yesterday’s FOMC meeting brought back some unwanted clouds of uncertainty over monetary policy next year,” said Adam Turnquist, chief technical strategist for LPL Financial. “At a minimum, market expectations have shifted toward a shallower- and slower-than-anticipated rate-cutting cycle.”
Turnquist said the Fed cannot take all the blame for the selling pressure as a reality check from overbought conditions, deteriorating market breadth, and rising rates appeared overdue.
“Technically, the near-term risk remains to the upside for 10-year Treasury yields and the dollar, creating potential headwinds for stocks,” Turnquist said.
“Based on this backdrop and the recent technical damage to the broader market, including a notable deterioration in market breadth over the last few weeks, we recommend waiting for support to be established and for momentum to improve before stepping up to buy this dip," he added.
Updated at 11:50 AM EST
Short memories
Micron Technology shares are falling the most in four years after the memory chip maker, which also produces key HBM components for AI hyperscalers, posted a muted near-term revenue outlook that clouded an otherwise solid first quarter earnings report.
Micron, however, said the HBM market would likely rise to $100 billion by 2030, and was confident it could capture around 20% of the overall total.
Micron shares were marked 15.8% lower in late-morning trading and changing hands at an early August low of $87.48 each.
Related: Analysts overhaul Micron stock price targets after earnings, outlook
Updated at 10:10 AM EST
Safe as houses?
Existing home sales rose to the highest level in eight months in November, rising 4.8% from October levels to a seasonally-adjusted pace of 4.15 million units.
The gains, however, must be put into the context of the September tally, which was the lowest in fourteen years, and the lack of new inventory on the market amid the ongoing increase in mortgage rates.
House prices, meanwhile, hit a fresh record high of $406,100, a 4.7% increase from the same period last year.
Existing home sales rose in November and were higher than expected.
— CMG Venture Group (@CmgVenture) December 19, 2024
🔹 Existing Home Sales: 4.15M vs. 4.08M est. (3.96M prior*)
🔸 Existing Home Sales (MoM): +4.8% vs. +3.0% est. (+3.4% prior*)
🔸 Median Home Price: $406.1K (+4.7% YoY) pic.twitter.com/ofrZ6WN2ZD
Updated at 9:33 AM EST
Rebounding bell
The S&P 500 was marked 52 points, or 0.91% higher in the opening minutes of trading, with the Nasdaq rising 210 points, or 1.08%
The Dow, meanwhile, clawed back around 370 points from last night's 1,100 point slump, while the mid-cap Russell 2000 gaining 26 points, or 1.19%.
S&P 500 Opening Bell Heatmap (Dec 19, 2024)$SPY +1.01%🟩$QQQ +0.95%🟩$DJI +0.93%🟩$IWM +1.31% 🟩 pic.twitter.com/1XF2MsYHJR
— Wall St Engine (@wallstengine) December 19, 2024
Updated at 8:36 AM EST
Still solid
Around 220,000 Americans filed for jobless benefits last week, the Labor Department reported, a 22,000 decline from the prior period and the lowest since early November.
The Commerce Department, meanwhile, lifted its final estimate for third quarter GDP growth to 3.1% from 2.8%, thanks in part to stronger-than-expected consumer spending that offset limp corporate profits.
Stocks extended their premarket gains in the wake of the data, with the S&P 500 called 36 points higher and the Nasdaq priced for a 132 point gain.
Continuing Claims down a touch pic.twitter.com/DSgOY3gu7e
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) December 19, 2024
Updated at 7:06 AM EST
BoE holds steady
The Bank of England held its key lending rate steady at 4.75% following its final policy meeting in the year, a close decision that reflects the growth and inflation challenges facing the U.K.'s post-Brexit economy.
The 6-3 vote to hold rates unchanged followed a spike in November inflation that paralleled a surprise contraction in the broader economy,.
"With the heightened uncertainty in the economy we can't commit to when or by how much we will cut rates in the coming year," BoE Governor Andrew Bailey said in a statement.
The Monetary Policy Committee voted by a majority of 6-3 to maintain #BankRate at 4.75%. Find out more: https://t.co/FWuXvEhN0R pic.twitter.com/9724Z6Edhd
— Bank of England (@bankofengland) December 19, 2024
Stock Market Today
The S&P 500 slumped to a one-month low by the close of trading Wednesday, giving back nearly 3% from the prior session and shedding around $1.8 trillion in market value in the wake of the Fed's final rate cut of the year.
The selloff, the biggest post-Fed decline on record, was tied to the central bank's forecast of just two rate cuts through the whole of 2025, around half their September estimate. The move came amid what it called "somewhat elevated" inflation and a resilient domestic economy.
"The Fed meeting brought back some unwanted clouds of uncertainty over monetary policy next year," said Adam Turnquist, chief technical strategist for LPL Financial in Charlotte.
"At a minimum, market expectations have shifted toward a shallower- and slower-than-anticipated rate-cutting cycle," he added. "Technically, the near-term risk remains to the upside for 10-year Treasury yields, creating a likely headwind for stocks."
Benchmark 10-year note yields, which were trading at around 4.391% prior to the Fed decision yesterday, were last marked at 4.522% in overnight trading, with 2-year notes trading at 4.319%.
The U.S. dollar index, which surged to a two-year high against a basket of its global peers following yesterday's rate cut, was last marked 0.13% lower at 107.892.
Heading into the start of the trading day on Wall Street, stock futures suggest a modest rebound from last night's selloff, with contracts tied to the S&P 500 priced for a 13-point opening-bell gain.
Related: Fed rate cut bets crumble after December policy meeting
Those linked to the Dow Jones Industrial Average, which at last night's close extended its losing streak to 10 sessions, the longest since 1974, are priced for an 85-point advance. The tech-focused Nasdaq is called 50 points higher.
Stocks on the move include Micron Technology (MU) , which slumped 15% in premarket trading following a disappointing near-term outlook for the memory chip market in last night's quarterly report.
FedEx (FDX) shares were also active, rising 0.11% ahead of the package delivery group's fiscal-second-quarter earnings after the closing bell.
In overseas markets, Europe's Stoxx 600 was marked 1.33% lower in Frankfurt in a follow-on move to last night's selloff on Wall Street, while Britain's FTSE 100 was marked 1.4% lower ahead of today's Bank of England rate decision.
More Wall Street Analysts:
- Veteran analyst who forecast Rocket Lab's stock rally updates price target
- Analysts revamp Ciena stock price target after AI outlook
- Top analyst revisits Micron stock price target ahead of Q1 earnings
Overnight in Asia, the Bank of Japan left its benchmark lending rate unchanged at its final policy meeting of the year, with Governor Kazuo Ueda hinting that rate hikes in January are unlikely, sending the yen sharply lower against the dollar.
The Nikkei 225 closed 0.69% lower while the regionwide MSCI ex-Japan benchmark fell 1.4% into the close of trading.
Related: Veteran fund manager delivers alarming S&P 500 forecast
