Stocks finished mixed Wednesday, with the Nasdaq reaching a record close, as investors picked through a key November inflation report that could test market bets on an end-of-year rate cut from the Federal Reserve.
The Dow Jones Industrial Average lost 99.27 points, or 0.22%, to end the session at 44,148.56, while the S&P 500 gained 0.82% to close at 6,084.19 and the tech-heavy Nasdaq advanced 1.77% to end at 20,034.89 and post an all-time high and a closing record.
Tesla shares rose nearly 6% to $424.77, lifting the electric vehicle maker’s stock price past its prior high reached in 2021.
The company's stock, which doubled in valued last year, is up about 71% in 2024, with almost all of those gains coming since Donald Trump’s election victory last month, according to CNBC.
Facebook parent Meta Platforms (META) and online retail and entertainment giant Amazon (AMZN) also surged to record highs.
Updated at 2:12 PM EST
Bond demand
Bond yields are active after one of the strongest auctions of 10-year notes in nearly a decade, suggesting investors aren't concerned with rising U.S. debt levels or inflation pressures heading into the near to medium term.
The Treasury generated a total of $105.3 billion in bids for the $39 billion in re-opened notes on offer, a level that translates to a bid-to-cover ratio of 2.7, the highest since 2016.
Foreign investors, meanwhile, took down around 70% of the sale, well ahead of the 61.7% recorded at the last benchmark sale in November.
Here's a fun factoid: The US Treasury's auction of 10-year notes just drew the highest bid-to-cover since June 2016. I guess bond investors aren't worried that the US has too much debt? pic.twitter.com/MuxZvs2UFA
— Robert Burgess (@BobOnMarkets) December 11, 2024
Updated at 12:09 PM EST
Nasdaq peak
The Nasdaq topped the 20,000 point mark for the first time on record Wednesday, extending the tech-focused benchmark's 2024 gain to around 35.6%.
The index topped the 10,000 point for the first time on June 10, 2020, around 20 years and three months after peaking past the 5,000 point mark on March 9, 2000.
The Nasdaq just hit 20,000 for the first time in history. pic.twitter.com/fGp4hb5tBU
— Brew Markets (@brewmarkets) December 11, 2024
Updated at 11:48 AM EST
Records in sight
The S&P 500 is moving to within a few points of its early December all-time peak, and was last marked 50.4 points, or 0.84% higher on the session following a November inflation report that all but locked-in the chances for a Fed rate cut next week in Washington.
At the same time, five meagcap tech stocks: Apple, Amazon (AMZN) , Alphabet (GOOGL) and Meta Platforms (META) , as well as bluechips Costco Wholesale (COST) and Netflix (NFLX) , hit new intra-day highs.
Once again, big tech is leading, with every member of the Magnificent 7 strongly in the green," said Louis Navellier of Navellier Calculated Investing."The discussion is shifting to how many cuts in '25, with many analysts saying as few as a single cut, given we're still not close to the 2% target, and it's not easy to see how current rates are restraining the economy, given all-time highs in stocks and home prices, along with a still strong labor market."
FUNDSTRAT'S TOM LEE PREDICTS S&P 500 TO HIT 7,000 MID-2025 BUT CLOSE LOWER AT 6,600
— Wall St Engine (@wallstengine) December 11, 2024
Lee sees tailwinds like a Fed put and Trump policies boosting markets early in 2025, alongside $SPY EPS growth estimates of $275-$300.
However, he warns of a weaker second half due to history… pic.twitter.com/Lxka87Vcll
Updated at 11:03 AM EST
Tesla triumph
Tesla shares are on pace for a fresh all-time high following a series of positive sales figures from China and a price target boost from Goldman Sachs analyst Mark Delaney.
"While we see some fundamental headwinds to the core auto business over the near to medium term and see valuation as full, we also believe the stock could remain at a higher multiple to reflect the long-term opportunity tied to FSD/robotics given broader market interest in potential AI beneficiaries," the analyst said.
Tesla shares were last marked 2.55% higher in late-morning trading and changing hands at $411.84 each, a move that extends their post-election rally to around 68%.
Related: Goldman Sachs analyst reboots Tesla stock price target with record high in sight
Updated at 9:53 AM EST
Lower Loonie
The Bank of Canada lowered its benchmark lending rate by half a percentage point to 3.25% following its regular policy meeting in Ottawa, a move that matched analysts' forecast and marks the fifth consecutive reduction since early summer
"The Governing Council has reduced the policy rate substantially since June, and those cuts will be working their way through the economy," BoC Governor Tiff Macklem said in a statement. "Going forward, we will be evaluating the need for further reductions in the policy rate one decision at a time."
The Canadian dollar, which opened this morning at the lowest level in four-and-a-half years, was last trading 0.27% higher at 1.4126 following the rate decision.
#BREAKING: Bank of Canada drops key interest rate https://t.co/0h9Pm1VZcu
— CTV News (@CTVNews) December 11, 2024
Updated at 9:36 AM EST
Solid open
The S&P 500 was marked 32 points, or 0.53% higher in the opening minutes of trading, with the Nasdaq rising 160 points, or 0.82%.
The Dow added 114 points to last night's close while the mid-cap Russell 2000 rose 17 points, or 0.69% following the November inflation report.
Benchmark 2-year Treasury note yields were last trading at 4.105% while 10-year notes were pegged at 4.215%
"CPI was a bit higher than anticipated but the underlying details were more favorable. Higher prices for new and used vehicles point to lingering hurricane effects on demand and supply, while housing costs showed the smallest increase since 2021," said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.
"The data have given the Fed the “all clear” for next week, and today’s inflation data keep a January cut in active discussion,
she added.
S&P 500 Opening Bell Heatmap (Dec 11, 2024)$SPY +0.45%🟩$QQQ +0.78%🟩$DJI +0.19%🟩$IWM +0.76%🟩 pic.twitter.com/6fx2ScT1tM
— Wall St Engine (@wallstengine) December 11, 2024
Updated at 9:06 AM EST
Broad gains
Broadcom (AVGO) shares jumped higher in premarket following a report from the tech-focused website The Information that it's working with Apple (AAPL) to develop a new AI chip.
Bernstein SocGen Group analyst Stacy Rasgon, meanwhile, issued a new note on Broadcom that reiterated his $195 price target and 'outperform rating' on the stock.
Broadcom shares were marked 3.6% higher in premarket trading to indicate an opening bell price of $177.21 each.
$AVGO +4.1% premarket $AAPL pic.twitter.com/Pn49P7OHxw
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) December 11, 2024
Updated at 8:40 AM EST
Rate cut cement?
U.S. inflation ticked higher in November, data indicated Wednesday, while core price pressures held at multi-year lows, suggesting an incomplete picture for the Federal Reserve's end-of-year interest rate decision next week.
The Commerce Department said its headline Consumer Price Index for November was pegged at an annual rate of 2.7%, accelerating from the 2.6% pace recorded in October and reaching the highest level since July.
U.S. stocks added to earlier following the data release, with futures contracts tied to the S&P 500 suggesting a 25 point opening-bell gain and those linked to the Dow priced for a 75 point bump. The Nasdaq is called 125 points higher.
Benchmark 2-year Treasury note yields eased 3 basis points to 4.134% while 10-year notes rose 1 basis points to 4.221%.
Overall US CPI moved up to 2.75% in November, up from 2.60% YoY in October and 2.44% in September.
— Charlie Bilello (@charliebilello) December 11, 2024
US Core CPI (ex-Food/Energy) remained at 3.30% in November, the highest reading since May.https://t.co/l5IYmkf6Ih pic.twitter.com/ncphDqSSxx
Updated at 7:55 AM EST
Macy's discount
Macy's (M) shares slumped lower in heavy premarket volume after the retailer slashed its annual profit forecast amid the heavy promotions needed to attract price-minded shoppers over the holiday season.
Macy's, which is facing pressure from a host of activist investors seeking to streamline the group and sell off some of its iconic retail assets such as Bloomingdales, lowered its full-year profit forecast by 19 cents at the higher end of its prior range to between $2.34 to $2.69 per share.
Macy's shares were marked 10.2% lower in premarket trading to indicate an opening bell price of $15.02 each.
Macy's misses, guides lower, should probably just hit the bid on one of these buyout offers.$M was nice enough to re-state prior guidance to include the expenses a "rogue employee" was hiding.
— Jeff Macke (@JeffMacke) December 11, 2024
Sees 2.25 - 2.50. Analysts were at 2.73
Seriously, just sell the chain already. pic.twitter.com/kDOKKKiS8X
Stock Market Today
Stocks ended lower on Tuesday, with the S&P 500 trimming its December gain to around 0.34%, as investors grew increasingly cautious into today's inflation reading. A broader move higher in Treasury yields, following a mixed set of figures from as $58 billion sale of 3-year notes, added to the downside pressure.
The Commerce Department is expected to report that headline inflation pressures ticked modestly higher last month, with economists looking for a year-on-year advance of 2.7%. Core inflation, which strips out food and energy costs, likely held at 3.3%.
Faster readings for either gauge, however, could blunt wages on the Fed's next rate move, which will be unveiled alongside new growth and inflation projections next week in Washington.
"Fed messaging has intentionally left wiggle room in their decision making for the December meeting by repeating that they believe they are still restrictive – cutting towards a neutral rate rather than an accommodative one," said Lauren Goodwin at economist and chief market strategist at New York Life Investments.
"This allows for further cuts without the tone being overly dovish against the backdrop of a still-strong economy," she added.
Olivier Douliery/Bloomberg via Getty Images
At present, the CME Group's FedWatch suggests an 86.1% chance of a quarter point rate cut, with the next move lower likely in March.
Benchmark 2-year Treasury note yields were last marked 1 basis point higher at 4.166% while 10-year paper rose 2 basis points to 4.238% ahead of a $39 billion auction of re-opened notes later in the session.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.31% higher at 106.743 amid the recent moves in Treasury yields and a report that suggests China may allow its yuan to drift lower in order to compensate for planned tariffs from President-elect Donald Trump.
Related: Jobs report stokes Fed interest rate cut bets
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500 suggest a modest 9 point opening bell gain, while those linked to the Dow Jones Industrial Average are priced for a 45 point decline.
The tech-focused Nasdaq, meanwhile, is called 52 points higher with Nvidia (NVDA) , Tesla (TSLA) and Palantir Technologies (PLTR) some of the more active names in premarket.
On the deal front, Kroger (KR) and Albertsons (ACI) shares were little-changed in premarket after a judge blocked their planned $25 billion merger on competition grounds.
U.S. Steel (X) , meanwhile, was marked 0.23% lower amid expectations that President Joe Biden will block its planned takeover by Japan's Nippon Steel following a report from the Committee on Foreign Investment in the United States later this month.
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In overseas markets, stocks were little-changed ahead of today's U.S. inflation report, as well as rate decisions from the European Central Bank and the Swiss National Bank tomorrow.
The region-wide Stoxx 600 was marked 0.01% lower in mid-day Frankfurt trading, with Britain's FTSE 100 edged 0.04% higher in London.
Overnight in Asia, Japan's Nikkei 225 ended 0.012% higher while the regional MSCI ex-Japan benchmark fell 0.54% into the close of trading.
Related: Veteran fund manager delivers alarming S&P 500 forecast
