Wall Street Mixes Gains and Losses as Key Stocks React to Corporate News
The S&P 500 Index ($SPX) (SPY) closed up +0.39% on Monday, while the Dow Jones Industrials Index ($DOWI) (DIA) fell -0.13%. The Nasdaq 100 Index ($IUXX) (QQQ) saw an increase of +0.71%.
Corporate News Boosts Tech Stocks
On Monday, stock markets showed mixed results. The Dow Jones Industrials hit a 1-1/2 week low, largely influenced by notable declines in key companies. However, positive corporate news sparked a rise in technology stocks. Tesla surged by over +5% after Bloomberg revealed that members of President-elect Trump’s transition team plan to prioritize a federal framework for fully self-driving vehicles within the Transportation Department. Additionally, Advanced Micro Devices (AMD) climbed more than +3% following an announcement that IBM would supply MI300x accelerator chips for its cloud network. Bond yields also declined, providing further support for equity markets.
Dow’s Decline Driven by Major Players
The Dow Jones Industrials struggled, led by Nike’s -2% fall after TD Cowen lowered its price target for the sneaker giant, citing cautious outlooks based on recent market analyses. Nvidia also contributed to the Dow’s decline, dropping over -1% due to reports that the company requested suppliers to redesign server racks for its new Blackwell graphics processing units due to overheating concerns.
Housing Market Shows Unexpected Strength
U.S. economic data on Monday revealed that the November NAHB housing market index unexpectedly increased by +3, reaching a 7-month high of 46, contradicting expectations for a dip to 42.
Market Focus Shifts to Upcoming Reports
Looking ahead, the markets will await data on U.S. housing starts and building permits on Tuesday for further direction. Quarterly earnings from Walmart and Lowe’s will also be closely examined to assess consumer spending trends. Wednesday’s spotlight will be on Nvidia’s earnings to ascertain the ongoing demand for its AI chips, following news of design adjustments for its graphics processing units.
Positive Earnings Outlook
So far, of the 90% of S&P 500 companies that have reported third-quarter earnings, 75% have exceeded expectations, a figure slightly below the three-year average. Bloomberg Intelligence notes these companies have reported a yearly earnings increase of +8.5% in Q3, significantly surpassing pre-season forecasts.
Rate Cut Discussions Continue
Market predictions indicate a 58% chance for a -25 basis point rate cut during the upcoming December 17-18 FOMC meeting.
International Markets Show Weakness
Global stock markets also faced challenges on Monday, with the Euro Stoxx 50 closing down -0.09%. China’s Shanghai Composite Index fell to a 1-1/2 week low, down -0.21%, while Japan’s Nikkei Stock 225 dropped to a 2-week low with a -1.09% decline.
Interest Rate Movements
December 10-year T-notes (ZNZ24) closed up +4 ticks on Monday. The yield on 10-year T-notes fell -2.9 basis points to 4.401%. T-notes rebounded from early losses, driven by reports indicating President-elect Trump’s advisers prefer Kevin Warsh for the Treasury Secretary position. Warsh, a former Fed governor known for his cautious stance on national debt, is viewed as a stabilizing candidate who may temper extreme tariff proposals.
European Bond Yields Mixed
European government bond yields experienced mixed results on Monday. The yield on the 10-year German bund rose by +1.8 basis points to 2.373%, while the 10-year UK gilt yield fell by -0.6 basis points to 4.465%. Statements from ECB officials highlighted concerns that rising international tensions could amplify inflationary pressures, necessitating potential interest rate hikes.
Potential Recession Risks Cited
ECB Governing Council member Stournaras warned that if the U.S. implements additional tariffs, it could weaken economic activity and push the Eurozone toward recession.
Anticipated ECB Rate Decisions
Market forecasts predict a definitive 100% chance of a -25 basis point rate cut by the ECB at its December 12 meeting, with a 17% probability of a -50 basis point cut at the same time.
Notable Movements in U.S. Stocks
Super Micro Computer (SMCI) led gains, closing up more than +13% as it nears a deadline for a delayed reporting requirement. Tesla (TSLA) benefited from positive news about self-driving vehicles, climbing over +5%. Henry Schein (HSIC) rose more than +7% following a report urging company board changes and cost-cutting measures.
Advanced Micro Devices (AMD) increased by over +3%, buoyed by IBM’s supply deal for accelerator chips. Moderna (MRNA) gained over +7% after HSBC upgraded its stock with a price target of $58. Dell Technologies (DELL) saw an uptick of more than +3% after Mizuho raised its price target from $135 to $155, and Shift4 Payments (FOUR) climbed over +3% as it was set to replace R1 RCM in the S&P MidCap 400 Index.
On the decline, Palantir Technologies (PLTR) dropped more than -6% amid insider selling. Nike (NKE) fell over -2% due to the lowered price target from TD Cowen. Nvidia (NVDA) was down by more than -1% due to reported supply chain issues.
Neurogene (NGNE) faced a significant decline of more than -44% after pausing the use of its treatment for Rett syndrome. IQVIA Holdings (IQV) and Biogen (BIIB) also slipped, with downgrades from analysts impacting their stock prices.
Upcoming Earnings Reports
A number of companies are expected to report earnings on November 19, including Amer Sports Inc (AS), AZEK Co Inc (AZEK), Dolby Laboratories Inc (DLB), Jacobs Solutions Inc (J), Keysight Technologies Inc (KEYS), Lowe’s Cos Inc (LOW), Medtronic PLC (MDT), Valvoline Inc (VVV), Walmart Inc (WMT), and XP Inc (XP).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
