Updated 4:50 PM EST by Rob Lenihan
Stocks finished lower Thursday, as investors continue to worry about the inflationary impact of proposed Trump administration policies while taking a cautious approach on stock market risk following last week's run of record highs.
The Dow Jones Industrial Average lost 207.33 points, 0.47%, to end the session at 43,750.86, while the S&P 500 slipped 0.60% to close at 5,949.17, and the tech-heavy Nasdaq dropped 0.64% to finish the day at 19,107.65.
The producer price index, which measures what producers get for their products, increased a seasonally adjusted 0.2% in October, up one-tenth of a percentage point from the previous month.
“We should expect a bit more volatility in producer prices, especially as businesses manage supply chains amid the risk of tariffs,” said Jeffrey Roach, chief economist for LPL Financial. “The consumer impacts from tariffs vary widely and are industry-specific as businesses often apply for exclusions or bear part of the costs.”
Roach noted that consumer prices actually decelerated down to 1.7% in late 2019 after businesses adjusted to the trade war with China.
Updated at 3:15 PM EST
Patient Powell
Fed Chair Jerome Powell told an audience in Dallas that the central bank will be patient on future rate cuts, given the strength of the economy and the stubborn nature of inflation, setting up a potential conflict with the incoming Trump administration.
"... the economy is not sending any signals that we need to be in a hurry to lower rates," Powell said in prepared remarks to a business forum. "The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully."
"Inflation is running close to our 2% goal, but it's not there yet, and we are determined to finish the job," he added.
Stocks extended declines in the wake of this remarks, with the S&P 500 down 37 points, or 0.62% and the Dow falling 238 points.
Benchmark 10-year note yields rose 1 basis point to 4.453% while rate-sensitive 2-year notes were pegged at 4.360%.
Related: Fed Chair Powell digs in for a fight as markets debate Trump economic plan
Updated at 12:46 PM EST
Gimme credit
Tesla (TSLA) shares slumped lower in afternoon trading following a report from Reuters that suggested President-elect Donald Trump's transition team is looking at eliminating tax credits for electric vehicle purchases.
Curiously, the report also indicated that Tesla has supported the plan, although Elon Musk has said in the past that his rivals rely more on government support from the Inflation Reduction Act.
“I guess that there would be some impact, but I think it would be devastating for our competitors and for Tesla slightly,” Musk told investors in July. “But long term, [it] probably actually helps Tesla."
Tesla shares were last marked 3.75% lower on the session at $317.83 each, General Motors (GM) edged 0.23% higher and Ford (F) slipped 0.2%. EV maker Rivian slumped 10.7%
*TRUMP PLANS TO KILL $7,500 EV TAX CREDIT, HAS SUPPORT FROM TESLA
— Geiger Capital (@Geiger_Capital) November 14, 2024
Elon is literally putting the country above his own financial interests at this point…
Hard to say otherwise. Patriot. pic.twitter.com/NP7U3PEjpq
Updated at 12:09 PM EST
Afternoon red
Stocks are giving back earlier gains heading into the afternoon session, while Treasury yields are slipping modestly lower ahead of Fed Chair Powell's appearance on an economic panel in Dallas to 3:00 pm Eastern time.
Benchmark 10-year Treasury notes were last marked 5 basis points lower on the session at 4.410%, with 2-year notes pegged at 4.271%.
The S&P 500, meanwhile, slipped 14 points, or 0.24% while the Nasdaq fell 40 points, or 0.2%.%
GS: Market Pricing Has Shifted Towards Our More Positive US Growth View pic.twitter.com/Lvivivibio
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) November 14, 2024
Updated at 10:33 AM EST
Chips up
Nvidia is pacing gains for the chip sector in early trading following a host of price target updates ahead of its third quarter earnings next week and two bullish updates from key supply-chain players ASML and Foxconn.
Taiwan-based Foxconn, which is also Apple's (AAPL) biggest iPhone assembler, posted stronger-than-expected third quarter earnings and repeated its outlook for 'significant' 2024 growth. ASML, meanwhile, said demand for its EUV chip design machines would grow at a double-digit rate until the end of the decade.
Nvidia shares were last marked 1.24% higher at $148.08 each, pacing the 0.85% advance for the PHLX Semiconductor index.
Related: Analysts revise Nvidia stock price targets as supply players update outlook
Updated at 9:37 AM EST
Flat open
The S&P 500 was marked 5 points, or 0.09% higher in the opening minutes of trading, with the Nasdaq gained 36 points, or 0.19%
The Dow was marked 73 points higher while the mid-cap Russell 2000 gained 10 points, or 0.4%.
S&P 500 Opening Bell Heatmap (Nov. 14, 2024)$SPY +0.07%🟩$QQQ +0.02%🟩$DJI +0.22%🟩$IWM +0.51%🟩 pic.twitter.com/WioRuayFRl
— Wall St Engine (@wallstengine) November 14, 2024
Updated at 8:36 AM EST
Data dump
Around 217,000 Americans filed for new jobless benefits last week, the Labor Department report, down 4,000 from the prior period and lower than the Street's 223,000 forecast.
The Commerce Department, meanwhile, reported that factory gate inflation rose 0.2% last month, with the year-on-year gain ticking modestly higher to 2.4%. The core reading of 3.5%, however, was the fastest since March of last year.
Stocks were little-changed in the wake of the data release, with the S&P 500 called 5 points higher and the Nasdaq priced for a 2 point bump.
Benchmark 10-year Treasury bond yields were holding at 4.457% while 2-year notes were pegged at 4.298%.
— Logan Mohtashami (@LoganMohtashami) November 14, 2024
Updated at 7:00 AM EST
Disney boost
Walt Disney (DIS) shares powered higher in early trading after the media and entertainment group posted stronger-than-expected third-quarter earnings and boosted its full-year profit outlook.
Disney earned $1.14 a share, topping Wall Street forecasts by 4 cents, with revenue rising 6% to $22.57 billion. Core streaming subscribers rose to 122.7 million.
The group also sees "double digit" percent earnings growth for the current and coming financial year.
Disney shares were marked 6.1% higher in premarket trading to indicate an opening bell price of $108.50 each.
The Walt Disney Company, $DIS, Q4 24 Results:
— EarningsTime (@Earnings_Time) November 14, 2024
🟢 +5.8% Pre Market
📊 Adj EPS: $1.14 🟢
💰 Revenue: $22.57B 🟢
📈 Net Income: $460M
🔍 23% growth in total segment operating income with notable gains in streaming & theatrical success for "Inside Out 2" and "Deadpool & Wolverine." pic.twitter.com/hvZ1cRuDer
Stock Market Today
Stocks ended modestly higher Thursday but gave back gains late in the session as Treasury bond yields moved higher following the Commerce Department's October inflation report.
Headline CPI ticked higher last month, to 2.6%, but readings for core and monthly pressures were largely in line with forecasts, keeping bets alive for an end-of-year interest-rate cut from the Federal Reserve.
The move higher in yields suggests, however, that investors see inflation remaining firmly above the Fed's 2% forecast next year as Trump's trade, tariff, tax and immigration policies take hold, limiting the central bank's ability to lower rates further in the world's biggest economy.
"Investors are preoccupied — and rightfully so — with inflation risks from tariffs, " said Jeffery Roach, chief economist at LPL Financial.
"In general, a tax from tariffs, or any other policy, creates a deadweight loss to the economy. Businesses and consumers feel the impact; employment typically shrinks, and our foreign trading partners often retaliate."
Olivier Douliery/Bloomberg via Getty Images
Fed Chairman Jerome Powell, who speaks as part of a panel later this afternoon in Dallas, could address that concern as markets look for further guidance on the central bank's policy path.
In the meantime, asset prices are leading the way, with the U.S. dollar index rising 0.5% overnight to trade north of the 107 mark against a basket of six global currencies for the first time since last October and scaling the highest levels in nearly two years.
Benchmark 10-year Treasury note yields, meanwhile, jumped another 3 basis points to 4.469% heading into the start of the New York trading session, with rate-sensitive 2-year notes holding at around 4.299%.
Related: Mr. Musk goes to Washington on a $2 trillion mission
Stocks are set for another muted open on Wall Street, ahead of producer price inflation and weekly jobless claims data at 8:30 a.m. U.S. Eastern Time. That's thanks in part to the rise in Treasury yields and the broader political uncertainty tied to President-elect Donald Trump's cabinet choices and their potential impact on foreign trade.
Futures contracts tied to the S&P 500 suggest a modest 8-point opening-bell gain, while those linked to the Dow Jones Industrial Average are priced for a 44-point bump.
The tech-focused Nasdaq, meanwhile, is called 26 points higher, with Nvidia (NVDA) rising 0.76% in premarket trading following a bullish update from chip-sector bellwether ASML. (ASML)
More Wall Street Analysts:
- Analysts reboot Snap stock price target after earnings
- Analysts reset Meta stock price target after earnings
- Analysts update Reddit stock price target after earnings
In overseas markets, the regional Stoxx 600 benchmark rose 0.54% in early Frankfurt trading, with Britain's FTSE 100 rising 0.23% in muted London trading.
Overnight in Asia, China stocks extended heavy declines following Trump's naming of Sen. Marco Rubio (R-Florida) as his nominee for secretary of state. The CSI 300 fell 1.7% and the tech-focused Shenzen index was down 2.8%. Stocks in Hong Kong were down 2%.
In Japan, the Nikkei 225 fell 0.48% in Tokyo, extending its losses into a third session, with tech stocks leading the declines.
Related: Veteran fund manager sees world of pain coming for stocks
