Traders work on the New York Stock Exchange floor on November 12, 2024 in New York City.
The S&P 500 and the Dow Jones Industrial Average ended Wednesday's session near the flatline as the postelection rally lost some steam. Traders also contemplated a key inflation report that was in line with expectations.
The S&P 500 inched higher by 0.02% to close at 5,985.38, while the 30-stock Dow ticked up 47.21 points, or 0.11%, to 43,958.19. The blue-chip index added as much as 230 points earlier on Wednesday. The Nasdaq Composite ended the day with a 0.26% decline and closed at 19,230.74.
The October consumer price index accelerated a tad to a 2.6% annual rate, matching the consensus estimate from economists polled by Dow Jones. Core prices, which exclude food and energy from the reading, rose 3.3% last month, which also matched estimates. After the inflation report, fed funds futures trading suggested a high likelihood that central bank policymakers would cut rates again in December, according to the CME FedWatch tool.
"It's time to stop worrying about the Fed and inflation," said David Russell, global head of market strategy at TradeStation. "Stocks have been on autopilot since the election and today's numbers do nothing to hurt the trend. December is still in play for a cut."
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The major averages fell Tuesday as the market took a breather from its postelection rally. The Dow lost about 382 points, or 0.9%. The S&P 500 declined 0.3%, while the tech-heavy Nasdaq Composite inched down 0.1%.
These moves followed a rally on Wall Street after the election of Donald Trump last week that sent stocks to record highs. The Dow closed above 44,000 for the first time on Monday, while both the S&P 500 and Nasdaq Composite also earned fresh records. The gains also extended to cryptocurrencies, briefly sending bitcoin above $93,000 on Wednesday on hopes that Trump will make good on a slew of promises to the industry.
Other notable economic data releases later this week include the producer price index data and retail sales numbers, which will be announced Thursday and Friday, respectively.
Money Report
S&P 500, Dow close near the flatline
The S&P 500 and the Dow Jones Industrial Average closed little changed on Wednesday as Wall Street's postelection rally wavered.
The S&P 500 added 0.02% to close at 5,985.38, while the Nasdaq Composite slipped 0.26% to 19,230.74. The Dow Jones Industrial Average added 47 points, or 0.11%, to finish at 43,958.19.
— Brian Evans
Market raises expectations for December rate cut following inflation report
The October inflation reading released Wednesday raised market expectations that the Federal Reserve will be cutting benchmark interest rates again in December.
Following the October consumer price index release, which showed the 12-month inflation rate at 2.6%, meeting forecasts, traders upped odds for a quarter percentage point reduction to about 82%, according to the CME Group's FedWatch gauge. A day earlier, the market-implied probability was at just 59%.
Traders then expect the Fed to skip January and then cut again in March.
—Jeff Cox
Semiconductor stocks struggle
Semiconductor stocks dragged on the broader market on Wednesday.
The VanEck Semiconductor ETF (SMH) and iShares Semiconductor ETF (SOXX) both lost more than 1% in the session. That put each fund on pace to notch their fourth straight losing day.
Notably, artificial intelligence darling Nvidia slipped around 1% during afternoon trading.
That action can help explain broader market movement. Indeed, the tech-heavy Nasdaq Composite was the worst performing of the three major indexes in afternoon trading.
— Alex Harring
Crowdstrike climbs 4% as cybersecurity stocks outperform
Cybersecurity stocks are having a strong day Wednesday in what has been a muted session for equities overall.
The Global X Cybersecurity ETF (BUG) was up 1% in afternoon trading. The fund was boosted by a gain of 1.4% by Crowdstrike and 1.1% for Zscaler.
The SPDR S&P Kensho Future Security ETF (FITE), which combines cybersecurity and and defense companies, climbed 2.2%, thanks in part to Rocket Lab's surge.
— Jesse Pound
Consumers staying selective this holiday season, says Morgan Stanley
There might be a little more holiday cheer this winter with consumers expected to spend more than they did last year, according to Morgan Stanley.
To be sure, consumers remain selective and continue to expect discounts.
"The set up for the consumer remains tricky as higher-income consumers continue to drive spending while lower-income consumers feel the impact of multiple years of elevated prices. As such, consumers are not planning to go on a spending spree across categories and will continue to allocate budgets selectively," strategist Michelle Weaver wrote in a Wednesday note.
As a result, Weavers expects industries exposed to lower-priced goods to perform better than those exposed to "big-ticket items."
— Hakyung Kim
Nelson Peltz thinks postelection euphoria won’t last
Billionaire investor Nelson Peltz thinks the stock market may be getting ahead of itself after Donald Trump secured a second presidential term.
"Trees don't grow to the sky, definitely not uninterrupted," he told CNBC's Sara Eisen at Wednesday's Delivering Alpha conference in New York. "There will be something that will upset it. I think we've got euphoria from the election. On the other hand, you look at the international stocks, we've gotten slayed over the last week."
"You've got two different markets... You've got these 20 companies that are swinging the cat around the room. And then you've got these other companies," he said.
— Jeff Cox
Republicans win House control and complete full sweep of power in Washington
Republicans will maintain control of the U.S. House of Representatives, NBC News reported Wednesday, as Donald Trump's return to the White House will see his party take full control of Washington.
The majority is one of the more narrow divides in recent history for the Congress' lower chamber, but the makeup will allow Trump to more swiftly confirm his cabinet picks and attempt to fulfill his legislative agenda. Trump ran on extending tax cuts from his first term and deregulation.
— Brian Evans
Rivian, Cava, Rocket Lab among stocks making biggest midday moves
Check out the companies making headlines in midday trading.
- Cava Group — Shares of the Mediterranean-inspired food chain popped 7% after third-quarter results came out stronger than expected. Cava's earnings of 15 cents per share exceeded the 11 cent consensus estimate from analysts polled by LSEG, while its revenue of $244 million revenue came out above the $234 million estimate.
- Rocket Lab — Shares of the space infrastructure company soared 35% after Rocket Lab posted a third-quarter revenue of $104.8 million, which exceeded analysts' expectations and reflected a 55% increase from the same period a year ago. The company also announced the first customer for its Neutron vehicle and forecast revenue for its fourth quarter in a range above what analysts had predicted.
- Charter Communications, Liberty Broadband — Cable operator Charter Communications agreed to acquire Liberty Broadband in an all-stock deal. Charter shares rose 5.6%, while Liberty Broadband slid 3%.
For the full list, read here.
— Pia Singh
Bank stocks rally
Bank stocks outperformed on Wednesday, continuing to climb on the back of last week's presidential election results.
Exchange-traded funds from State Street tracking regional banks (the KRE) and the banking sector more broadly (the KBE) each rose roughly 1%. By comparison, the S&P 500 ticked higher by 0.3%.
Bank stocks have largely surged since Donald Trump emerged victorious in the race for the White House, with investors viewing the Republican's expected posture toward deregulation as beneficial for the group. To be sure, it hasn't been a straight shot up, with both ETFs posting declines in Tuesday's session.
The regional bank ETF has climbed more than 14% in November alone, while broader bank fund has jumped more than 12%. Both are tracking for their best months since July.
— Alex Harring
Dallas Fed President Logan advises to 'proceed with caution' on cuts
Dallas Federal Reserve President Lorie Logan urged caution on policy in a speech Wednesday in an environment where the longer-term interest rate trajectory could be higher than normal.
Logan said she generally sees inflation heading lower and the labor market easing but stable. Yet she said there are risks to the Fed's policymaking "voyage" that need to be considered, in which inflation could hold above the Fed's 2% target.
"I anticipate the [Federal Open Market Committee] will most likely need more rate cuts to finish the journey. But it's difficult to be sure how many cuts may be needed and how soon they may need to happen," she said during an appearance in her home district.
If the Fed cuts rates past the "neutral" level that neither boosts nor restricts growth, "inflation could reaccelerate and the FOMC could need to reverse direction. In these uncertain but potentially very shallow waters, I believe it's best to proceed with caution," said Logan who will not have a vote on the FOMC until 2026.
—Jeff Cox
Dollar index reaches highest point since April
The dollar index rose 0.4% Wednesday to 106.50, its strongest level since April 16, when it reached 106.517.
Meanwhile, the euro fell 0.6% against the dollar to 1.0569. This market the euro's lowest point against the greenback since Nov. 2, 2023, when it traded as low as 1.0564.
— Hakyung Kim
Small caps resume postelection rally
Small-cap benchmark Russell 2000 jumped nearly 1% Wednesday, resuming its postelection rally after a pause in the previous session.
Small companies, which are more domestic-oriented and cyclical, are seen as beneficiaries from President-elect Donald Trump's tax cuts and protectionist policies.
The index rallied 8.6% last week and it fell 1.8% Tuesday after a number of strong days.
— Yun Li
Bitcoin tops $90,000
Bitcoin extended its postelection rally Wednesday, breaking above $90,000. The flagship cryptocurrency was last up 1% at $90,796.
— Fred Imbert
Stocks open little changed
Stocks were roughly flat shortly after the opening bell on Wednesday, as investors weighed fresh inflation data and how much cardio the postelection rally has left.
The S&P 500 ticked up 0.1%, while the Nasdaq Composite added 0.09%. The Dow Jones Industrial Average advanced 22 points, or 0.09%.
— Brian Evans
CPI rises 2.6% in October, as expected
Consumer prices rose slightly in October, though the increase was in line with expectations.
The consumer price index gained 0.2% month over month and 2.6% from the year-earlier period, as expected. Excluding food and energy, CPI rose 0.3% month over month, also matching Dow Jones estimates.
— Fred Imbert
Evercore ISI names Apple a top pick heading into 2025
Apple could see gains next year in the aftermath of last month's release of Apple Intelligence, according to Evercore ISI.
Analyst Amit Daryanani named Apple as one of its top five ideas for 2025, saying that the impact of AI on iPhone sales could spell long-term upside. Notably, the analyst said it could reach a stock price of $300.
"We continue to think this will be a long-tailed upgrade cycle with iPhone growth improving as more AI features are added and strength will likely sustain into the iPhone 17 cycle," he told clients in a Wednesday note.
"Beyond AI, we continue to expect solid growth out of Services (low teens) and Wearables (HSD) in FY25 along with continued strength in margins," Daryanani continued. "This growth coupled with steadily accelerating iPhone y/y growth should enable Apple stock to work higher as we go through 2025."
While shares have fallen more than 1% in the past one month, they've risen more than 16% this year.
— Sean Conlon
Redburn Atlantic downgrades Starbucks to sell
Starbucks may be facing some pullback from here, according to Redburn Atlantic.
Shares slumped more than 1% in the premarket after analyst Edward Lewis downgraded shares of the coffeehouse chain to sell. His updated price target implies around 22% downside from Tuesday's close.
While the analyst believes CEO Brian Niccol's "Back to Starbucks" plan will spur growth, he still sees challenges ahead in its path to recovery. This also comes after the company posted disappointing fiscal fourth-quarter results.
"There is merit in the plan and we do model a return to positive comps in FY25," he said in a Wednesday note. "However, as has been the case at Starbucks of late, the recovery will come at a cost not adequately reflected in consensus, in our view."
Shares have risen about 3% this year and more than 3% in the past one month.
— Sean Conlon
European markets flat ahead of U.S. inflation data
European stocks traded around the flatline Wednesday, with global markets focused on upcoming U.S. inflation data.
Shares of Just Eat Takeaway stock soared 20% shortly after the open Wednesday after the company said it had struck a deal to sell its U.S. unit Grubhub to Wonder for $650 million. Siemens Energy was also a best performer on the index, its shares rocketing 19.1% Wednesday morning after the German energy company upgraded its mid-term financial targets.
Shares of ABN Amro traded 1% lower after the Dutch lender posted a 9% fall in quarterly net profit, compared to a year earlier. Shares of Allianz were up 1.1% after the financial services group beat expectations with a 22% rise in third-quarter net profit.
Read the European markets blog here
— Holly Ellyatt
Stocks making the biggest moves after hours
Check out the companies making headlines in extended trading.
Spotify Technology – Shares of the music-streaming service jumped about 8%. Total monthly active users for the third quarter came in at 640 million, reflecting an 11% jump from a year earlier and beating FactSet consensus estimates of 639.0 million. Still, Spotify fell short of the Street's expectations on the top and bottom lines in the period.
Skyworks Solutions — The semiconductor company slipped nearly 2% after posting an earnings beat in the fiscal fourth quarter. Skyworks reported adjusted earnings of $1.55 per share, while analysts polled by LSEG had forecast $1.52 per share. Revenues of $1.02 billion came in line with estimates. Meanwhile, the company's forward guidance for the first quarter came in lighter than expectations.
Cava — The fast-casual chain popped 14% after reporting a top- and bottom-line beat in the third quarter. Cava announced earnings of 15 cents per share on revenues of $244 million. Meanwhile, analysts had forecast earnings of 11 cents per share and $234 million in revenues, per LSEG.
The full list can be found here.
— Hakyung Kim
Stock futures are flat Tuesday night
U.S. stock futures were little changed Tuesday night.
Futures tied to the Dow Jones Industrial Average fell just 16 points, or 0.04%. S&P 500 futures and Nasdaq 100 futures ticked down 0.05% and 0.09%, respectively.
— Hakyung Kim
Correction: An earlier version of this blog post misstated the day of the week.
