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US stocks were little changed on Thursday as investors waited for a Jerome Powell speech to set the tone for interest rate cuts and assessed the impact of a Republican sweep of political power.
The Dow Jones Industrial Average (^DJI) hugged the flat line, while the S&P 500 (^GSPC) slipped 0.2%. The Nasdaq Composite (^IXIC) was down 0.4%, coming off a mixed day for the three major gauges.
Though the mood is muted, stocks are still riding high near records after the latest consumer inflation data kept hopes for a December rate cut aloft. That optimism broadly held after a reading on wholesale inflation showed prices firmed slightly more than expected in October.
Initial jobless claims fell last week to 217,000, their lowest level since May, and less than the 220,000 claims expected by economists.
The focus is on how the Federal Reserve chair sees inflation developing as investors gauge the odds of rates going back to staying higher for longer. The market is already weighing the potential upward pressure on prices from President-elect Donald Trump’s policies.
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
Republicans held onto their slim majority in the House of Representatives, handing Trump and his party a “trifecta” — unified control of power across Washington. The sweep limits curbs on implementing the incoming president’s aggressive economic agenda, which has helped spur the post-election breakneck rally in stocks.
Worries about Trump’s America-first plans helped drag Chinese stocks down as much as 20% from their October high in Hong Kong, with tech hardest hit.
In corporates, Disney’s (DIS) quarterly earnings beat estimates as its streaming unit swung to a profit. The stock jumped 8% in early trading after revenue also topped Wall Street expectations.
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Tesla slides 3% as post-election ‘Trump trade’ wanes
Tesla (TSLA) shares declined more than 3.5% on Thursday as investors are taking profits off the table following a massive surge in the ‘Trump trade’ favorite.
With Thursday’s slide, the stock is still up more than 25% since Donald Trump’s White House victory last week over optimism that CEO Elon Musk’s close ties to the President-elect will loosen regulations around autonomous driving.
Meanwhile, on Wednesday the electric vehicle giant issued its sixth recall this year. The company recalled 2,400 Cybertruck pickups due to a faulty part could lead to a loss of power and increase the risk of a collision.
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Tapestry jumps 11%, Capri sinks after companies end merger plans
Tapestry (TPR) shares soared on Thursday to an 11-year high after the parent of Coach and Capri Holdings (CPRI) called off its merger plans.
The fashion companies mutually decided to abandon their $8.5 billion tie-up, citing regulatory hurdles.
In a statement, Capri said that “the required closing condition of receiving necessary US regulatory approvals was unlikely to be met by the merger agreement’s outside date of February 10, 2025.”
Shares of Capri fell 2% while Tapestry stock jumped as much as 11%.
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Disney pops 10% after earnings beat, guidance tops estimates
Yahoo Finance’s Alexandra Canal reports:
Disney (DIS) on Thursday reported fiscal fourth quarter earnings per share and revenue that topped Wall Street estimates, as its direct-to-consumer business built on recent momentum and swung to a profit.
Strong guidance for the next two years also fueled investor optimism, sending shares up over 10% in early trading following the results.
Read more here.
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Dow, S&P 500, Nasdaq tick higher with Powell speech on deck
The major averages opened mixed on Thursday as investors awaited a speech from Fed Chairman Jerome Powell while assessing a Republican sweep in Congress.
The Dow Jones Industrial Average (^DJI) ticked up 0.2%, while the S&P 500 (^GSPC) gained slightly. The Nasdaq Composite (^IXIC) also rose 0.1%.
Republicans won control of the House on Wednesday, completing their 2024 election “trifecta.”
Investors have been watching a rising US Dollar Index (DX-Y.NYB) and the impacts it could have on the markets. Commodities like oil and gold, which are invoiced in dollars, have been under pressure in recent days.
Bitcoin (BTC-USD) held above $91,000 on Thursday morning after climbing past $93,400 in the prior session.
The world’s largest cryptocurrency has been at the center of the Trump trade, which has catalyzed moves across a range of assets after Donald Trump’s White win last week.
The token is up more than 30% since Election Day.
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Initial jobless claims drop to lowest level since May
Initial jobless claims fell by 4,000 to their lowest level since May, at 217,000 for the week ending Nov. 9. The reading was less than the 220,000 claims expected by economists.
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