Megacap tech and tech-related stocks helped boost the Nasdaq, while the S&P 500 posted a more modest gain and the blue-chip Dow closed in the red
The S&P 500 and the Nasdaq gained ground while Brent crude prices hit a 3-1/2-year low on Tuesday amid concerns over weakening global demand a day ahead of key inflation data.
Market participants were bracing for the Labor Department’s CPI report, and the first debate between Vice President Kamala Harris and former President Donald Trump, who are locked in a tight race for the White House.
Data from China showing a rise in exports seemed to be in anticipation of tighter tariffs from trading partners, including the incoming U.S. administration.
Megacap tech and tech-related stocks helped boost the Nasdaq, while the S&P 500 posted a more modest gain and the blue-chip Dow closed in the red.
It really feels like today is kind of a calm before the storm, according to Ryan Detrick, chief market strategist at Carson Group. We obviously have the first presidential debate between Trump and Harris later this evening, but then we have the consumer price index inflation data tomorrow and investors are kind of on strike right now with no major buying or selling.
Shares of big banks were under pressure after Fed Vice Chair for Supervision Michael Barr unveiled sweeping bank capital plan revisions.
The sector was further rattled after JPMorgan Chase issued an interest income warning as interest rates are expected to decline.
The warning from JPMorgan Chase is a reminder that there still are some cracks in the economy as we head into the end of the year, Detrick said.
Wednesday’s consumer price index report is expected to show inflation drifting closer to the Fed’s 2% target, reflecting Fed Chair Jerome Powell’s belief that price growth is under control, and softness in the labour market suggests the time has come for an interest rate cut.
Financial markets are baking in a 71% possibility that the central bank will cut its Fed funds target rate by 25 bps at the conclusion of its monetary policy meeting next week, with a 31% possibility of a supersized 50 bp rate cut, as per CME’s FedWatch tool.
Investors are firmly focused on what the Federal Reserve is going to do, and on economic reports, according to Oliver Pursche, senior VP at Wealthspire Advisors. So far, the data suggests that the most likely scenario is a soft landing or very mild recession.
The Dow Jones Industrial Average declined 92.63 points, or 0.23%, to 40,736.96; the S&P 500 added 24.47 points, or 0.45%, to 5,495.52; and the Nasdaq Composite gained 141.28 points, or 0.84%, to 17,025.88.
