Markets Wrap: Dow Drops 150 Points as Wall Street Awaits CPI Report

Stock Market Wrap

Markets Wrap: Dow Drops 150 Points as Wall Street Awaits CPI Report

Dec 10, 2024

Market Overview:

U.S. stocks, bonds, and the dollar experienced modest movements as traders await key inflation data for insights into the Federal Reserve’s next rate decision. The S&P 500 saw fluctuations, ultimately closing with a slight 0.1% loss. The Nasdaq 100 and Dow Jones Industrial Average also slipped, down 0.3% and 0.35% respectively.

The market’s focus remains on the upcoming Consumer Price Index (CPI) release, which could significantly impact rate cut expectations. Analysts predict another 0.3% monthly increase in core CPI, with year-over-year core inflation expected to hold at 3.3%. This data will be pivotal for the Federal Reserve’s final policy meeting of the year, where swap trading suggests an 80% probability of a 25-basis-point rate cut.

Treasury yields climbed slightly, with the 10-year yield rising by two basis points to 4.22%. The Bloomberg Dollar Spot Index added 0.1%, reflecting cautious sentiment ahead of the CPI report.

Corporate News:

Alphabet Inc.: Shares surged 5.6% following the announcement of a quantum computing breakthrough using its Willow quantum chip.
Oracle Corp.: The stock tumbled 6.7% after fiscal Q2 results fell short of expectations, despite a strong performance earlier this year.
Taiwan Semiconductor Manufacturing Co.: November sales increased 34%, driven by robust AI-related demand.
Boeing Co.: Resumed assembly of its bestselling aircraft after a 53-day strike, with deliveries in November at their lowest in four years.
Walgreens Boots Alliance Inc.: Reportedly in acquisition talks with Sycamore Partners amidst ongoing financial struggles.
C3.ai Inc.: Reported better-than-expected quarterly revenue and raised its full-year sales forecast.
Eli Lilly & Co.: Announced a $15 billion stock buyback program and a 15% increase in its quarterly dividend, supported by strong growth in its weight-loss drug Zepbound.
Alaska Air Group Inc.: Revealed global expansion plans and upgraded its profit forecast.
MongoDB Inc.: Posted strong Q3 results but announced the departure of CFO Michael Gordon, raising analyst concerns despite Guggenheim’s positive outlook.

Key Developments to Watch:

Wednesday’s CPI release will be critical, with investors divided on the potential market reaction. A softer inflation reading could fuel a year-end rally, while a higher-than-expected figure may increase volatility.
Fed officials are expected to monitor CPI closely for any signs of stalled inflation progress, which could influence the likelihood of a rate cut.

The overall market sentiment reflects caution, with some analysts viewing current bullishness as a contrarian indicator, suggesting potential overbought conditions heading into 2025.

*All data in this blog is sourced from reputable media outlets such as CNBC, Yahoo Finance, and Bloomberg. If any content infringes on copyright, please notify us for immediate removal.