S&P 500 and Nasdaq Reach Near Two-Week Highs
The benchmark S&P 500 and tech-heavy Nasdaq reached near two-week highs on Wednesday, driven by lower Treasury yields that boosted megacap stocks. Investors are eagerly awaiting inflation reports and earnings from major lenders later in the week.
Microsoft, Alphabet, Amazon.com, and Meta Platforms all saw gains as US Treasury yields decreased. Nvidia also experienced a 1.1% increase after TSMC, the world’s largest contract chipmaker, beat revenue expectations for the fourth quarter.
Communication services stocks rose to a near two-year high, leading sectoral gains.
Uncertainty Surrounding Monetary Policy
Equities have remained range-bound as investors reassess their expectations of monetary policy easing due to mixed economic data and conflicting signals from Federal Reserve officials.
All eyes are now on the upcoming December consumer and producer inflation reports, which could influence the central bank’s monetary policy trajectory.
“Unless you see inflation come in higher than expected, there is going to be an inclination to move sooner rather than later (on rate cuts),” said Thomas Hayes, chairman at Great Hill Capital.
Banking Giants Expected to Report Lower Profits
JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo are expected to report lower fourth-quarter profits as they allocate funds to cover souring loans and increased depositor payments.
The banking giants’ stocks slipped on Wednesday, pushing the S&P 500 bank index to a one-week low.
“The secret to happiness is low expectations, and that’s exactly what we have going into earning seasons,” Hayes added.
Crypto Stocks Experience Decline
Crypto stocks, including Coinbase, Bitfarms, and Riot Platforms, all experienced a decline of over 4%. This came after the US securities regulator announced that a fake social media message regarding the approval of exchange-traded funds was posted on its account.
Boeing Recovers, DocGo Drops
Boeing saw a 1.7% increase in stock price, recovering from a significant tumble in the previous sessions. CEO Dave Calhoun acknowledged errors made by the planemaker as more than 170 jets remained grounded.
On the other hand, DocGo’s stock dropped by 27.8% after Fuzzy Panda Research disclosed a short position on the health services company.
Market Overview
At 9:45 a.m. ET, the Dow Jones Industrial Average increased by 115.94 points, or 0.31%, reaching 37,641.10. The S&P 500 rose by 12.16 points, or 0.26%, to 4,768.66, while the Nasdaq Composite saw a gain of 39.30 points, or 0.26%, reaching 14,897.01.
The NYSE recorded more advancing issues than decliners with a ratio of 1.29-to-1, while the Nasdaq had a ratio of 1.01-to-1.
The S&P index had 20 new 52-week highs and no new lows, while the Nasdaq recorded 37 new highs and 24 new lows.
Hot Take: Mixed Market Performance Amidst Inflation Reports and Earnings Season
The benchmark S&P 500 and Nasdaq reached near two-week highs driven by lower Treasury yields. However, uncertainty surrounding monetary policy remains as investors reassess their expectations amidst mixed economic data and signals from the Federal Reserve. All eyes are on the upcoming inflation reports that could impact the central bank’s policy trajectory.
Banking giants are expected to report lower profits due to loan provisions and increased depositor payments. Crypto stocks experienced a decline following a fake social media message regarding the approval of exchange-traded funds. Boeing recovered while DocGo faced a significant drop in stock price.
The market continues to fluctuate as investors navigate through earnings season and await key economic indicators.
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