Wall Street in Flux: Historic Milestones Under Threat Amid Inflation Concerns
Last week on Wall Street was a rollercoaster for investors. After the election excitement, the Dow Jones Industrial Average (DJI) and the S&P 500 Index (SPX) both surpassed notable milestones, closing above 44,000 and 6,000, respectively. Unfortunately, this momentum quickly faded as focus shifted to crucial inflation data. The October readings for the consumer price index (CPI) and producer price index (PPI) matched economists’ predictions. Consequently, following these indicators and retail sales data, all three major indexes are poised for weekly losses, with the SPX and Nasdaq Composite (IXIC) potentially facing their steepest declines since September.
In political news, NBC News announced that Republicans will control both the House and the Senate. Meanwhile, Federal Reserve Chair Jerome Powell mentioned that the central bank has ample time to formulate its interest rate strategy.
Stocks and Sectors to Watch Post-Election
Wondering how to approach trading options after the election? You’re not alone. Many are looking for guidance on sectors influenced by Trump’s victory. Notably, Tesla (TSLA) shares have surged, aided by Elon Musk’s strong backing of the president-elect. Contrarily, stocks linked to China are facing uncertainty as traders assess the implications of Trump’s proposed tariff plans. Additionally, gold prices in the U.S. have reached unprecedented levels, though the artificial intelligence (AI) rally paused as OpenAI prepped to reveal its “blueprint for U.S. AI infrastructure” in Washington D.C.
Analyst Insights to Consider
While the election was a primary driver of market activity last week, other factors also captured analysts’ attention. For example, Deutsche Bank downgraded the shares of cybersecurity software company Okta (OKTA) due to slower-than-expected growth and mixed customer feedback. At Redburn Atlantic, there were concerns about Starbucks (SBUX) not meeting expectations regarding costs. In a positive turn, Twilio (TWLO) reached two-year highs following an upgrade from Wells Fargo, and BWX Technologies (BWXT) achieved record highs after a bullish note from BofA Global Research.
Retail Earnings Ahead of Holiday Season
With last week’s inflation data now available, traders are shifting their focus to manufacturing and services statistics. As the holiday shopping season approaches, several retail companies are preparing to release their earnings reports. Lowe’s (LOW), Target (TGT), and Walmart (WMT) are among the key players entering the earnings phase.
While waiting for these reports, Schaeffer’s Senior Quantitative Analyst Rocky White offers end-of-year tax tips to enhance your portfolio strategy. Simultaneously, Senior V.P. of Research Todd Salamone reflects on potential short-term challenges that could affect the next upward movement of the SPX.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
