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Wall Street closed higher on Monday as market participants are keenly waiting for the outcome of the Fed’s FOMC meeting. Moreover, two key inflation data will be released this week that will also provide light on current economic conditions. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) advanced 0.4% or 157.06 points to close at 36,404.93, marking its highest close since Jan 12, 2022. Notably, 22 components of the 30-stock index ended in positive territory, while 8 ended in negative zone.
The tech-heavy Nasdaq Composite finished at 14,470.75, rising 0.2% due to strong performance of large-cap technology stocks. The tech-laden index posted its highest close since Apr 4, 2022.
The S&P 500 gained 0.4% to finish at 4,622.44, reflecting its highest close since Mar 29, 2022. In intraday trading, the broad-market index reached its 52-week high of 4,623.71. Ten out of 11 broad sectors of the benchmark ended in positive territory while one in negative zone.
The Consumer Staples Select Sector SPDR (XLP), the Industrials Select Sector SPDR (XLI) and the Technology Select Sector SPDR (XLK) rose 1%, 1% and 0.9%, respectively, while the Communication Services Select Sector SPDR (XLC) declined 0.8%.
The fear-gauge CBOE Volatility Index (VIX) was up 2.3% to 12.63. A total of 11.32 billion shares were traded on Monday, higher than the last 20-session average of 10.89 billion. Advancers outnumbered decliners on the NYSE by a 1.2-to-1 ratio. On Nasdaq, a 1.2-to-1 ratio favored declining issues.
Fed’s FOMC Meeting in Focus
The Fed has been conducting its last FOMC meeting of 2023 on Dec 12-13. Most of the market participants are confident that the Fed is through with its current rate hike cycle. The CME FedWatch is currently showing almost 100% probability that the central bank will keep the benchmark interest rate unchanged at 5.25-5.5%. More importantly, the tool is also showing a 45% probability that the central bank will initiate the first rate cut of 25 basis points as early as March 2024.
The Fed raised the benchmark interest rate sharply by 5.25% from March 2022 to November 2023. Despite adopting extreme monetary hardness, the fundamentals of the U.S. economy remain solid. In this regard, market participants are keenly waiting for the Fed Chairman Jerome Powell’s post-FOMC statement to find any clue regarding time line of first rate cut in 2024.
Labor Market Cooling but Not Tumbling
The resilient labor market has been showing signs of cracks over the last four weeks. The weekly jobless claims for the last four weeks remained soft. The Department of Labor reported that job openings totaled a seasonally adjusted 8.73 million for October, a decrease of 617,000 or 6.6% month over month.
On the other hand, the Department of Labor reported that the U.S. economy added 199,000 nonfarm workers in November compared with the consensus estimate of 170,000. The metric for October was 150,000. The unemployment rate fell to 3.7% in November from 3.9% in October. The consensus estimate was also 3.9%.
Expectations of Future Inflation Rate Decline
The University of Michigan reported that Americans expect the inflation rate to cool down to 3.1% next year from 4.5% in November. The metric for December marked the lowest level since March 2021. Expectations of inflation over the next five years fell to 2.8% in December from 3.2% in November. The metric for November was the highest since 2011.
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Stock Market News for Dec 12, 2023
Wall Street closed higher on Monday as market participants are keenly waiting for the outcome of the Fed’s FOMC meeting. Moreover, two key inflation data will be released this week that will also provide light on current economic conditions. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) advanced 0.4% or 157.06 points to close at 36,404.93, marking its highest close since Jan 12, 2022. Notably, 22 components of the 30-stock index ended in positive territory, while 8 ended in negative zone.
The tech-heavy Nasdaq Composite finished at 14,470.75, rising 0.2% due to strong performance of large-cap technology stocks. The tech-laden index posted its highest close since Apr 4, 2022.
The major gainer of the tech-laden index was Broadcom Inc. (AVGO - Free Report) . The stock price of the company climbed 9%. Broadcom currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 gained 0.4% to finish at 4,622.44, reflecting its highest close since Mar 29, 2022. In intraday trading, the broad-market index reached its 52-week high of 4,623.71. Ten out of 11 broad sectors of the benchmark ended in positive territory while one in negative zone.
The Consumer Staples Select Sector SPDR (XLP), the Industrials Select Sector SPDR (XLI) and the Technology Select Sector SPDR (XLK) rose 1%, 1% and 0.9%, respectively, while the Communication Services Select Sector SPDR (XLC) declined 0.8%.
The fear-gauge CBOE Volatility Index (VIX) was up 2.3% to 12.63. A total of 11.32 billion shares were traded on Monday, higher than the last 20-session average of 10.89 billion. Advancers outnumbered decliners on the NYSE by a 1.2-to-1 ratio. On Nasdaq, a 1.2-to-1 ratio favored declining issues.
Fed’s FOMC Meeting in Focus
The Fed has been conducting its last FOMC meeting of 2023 on Dec 12-13. Most of the market participants are confident that the Fed is through with its current rate hike cycle. The CME FedWatch is currently showing almost 100% probability that the central bank will keep the benchmark interest rate unchanged at 5.25-5.5%. More importantly, the tool is also showing a 45% probability that the central bank will initiate the first rate cut of 25 basis points as early as March 2024.
The Fed raised the benchmark interest rate sharply by 5.25% from March 2022 to November 2023. Despite adopting extreme monetary hardness, the fundamentals of the U.S. economy remain solid. In this regard, market participants are keenly waiting for the Fed Chairman Jerome Powell’s post-FOMC statement to find any clue regarding time line of first rate cut in 2024.
Labor Market Cooling but Not Tumbling
The resilient labor market has been showing signs of cracks over the last four weeks. The weekly jobless claims for the last four weeks remained soft. The Department of Labor reported that job openings totaled a seasonally adjusted 8.73 million for October, a decrease of 617,000 or 6.6% month over month.
On the other hand, the Department of Labor reported that the U.S. economy added 199,000 nonfarm workers in November compared with the consensus estimate of 170,000. The metric for October was 150,000. The unemployment rate fell to 3.7% in November from 3.9% in October. The consensus estimate was also 3.9%.
Expectations of Future Inflation Rate Decline
The University of Michigan reported that Americans expect the inflation rate to cool down to 3.1% next year from 4.5% in November. The metric for December marked the lowest level since March 2021. Expectations of inflation over the next five years fell to 2.8% in December from 3.2% in November. The metric for November was the highest since 2011.