Stock market today: Nasdaq tops 20,000 for first time as Big Tech surge leads stocks higher

Updated Wed, Dec 11, 2024, 10:16 AM 1 min read

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  Inflation ‘may remain stubbornly sticky’

  The latest inflation data came in line with expectations.

  This only further boosted the market’s confidence that the Federal Reserve will cut interest rates once more to end 2024. But it also underscored that inflation hasn’t been making much progress toward the Fed’s 2% inflation target in recent months.

  “The Federal Reserve can feel largely pleased with the progress made on lowering high levels of inflation over the last couple years,” BlackRock global CIO of fixed income Rick Rieder wrote in a note on Wednesday. “But the bulk of this progress is behind us now and inflation may remain stubbornly sticky near current levels for a time.”

  EY chief economist Gregory Daco told Yahoo Finance he sees “stickiness in the underlying inflation dynamics.”

  Given this dynamic, economists are continuously clamoring that Fed chair Powell is likely to tease out at a slow and steady approach to interest rate cuts moving forward during his press conference next week.

  “There’s going to be signaling that the next few rate cuts are going to be longer spaced, and that there is going to be a bit of a pause until the next rate cut, especially in light of the expected policy environment,” Daco said.

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  Tesla hits record high amid ‘Magnificent 7’ rally

  The “Magnificent Seven” tech stocks are roaring in Wednesday’s post inflation print rally.

  Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) are all up more than 1% while Apple (AAPL) stock is also in the green.

  At some point in the session, Alphabet, Tesla, Meta, Amazon and Apple all touched intraday record highs. Meanwhile, Roundhill’s Magnificent Seven ETF (MAGS), which tracks all seven stocks, is also at a record high. Up more nearly 3% on Wednesday, the group was far outpacing the 0.9% gain in the S&P 500 (^GSPC).

  This is a continuation from the trend seen since the start of December. In the past month, the Magnificent Seven ETF is up nearly 9% while the S&P 500 is up just more than 1%.

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  Trending tickers: Macy’s, SMCI

  Here are some of the top trending tickers on the Yahoo Finance homepage…

  Macy’s (M): Macy’s stock fell around 5% on Wednesday, somewhat recovering from earlier double-digit losses. The company reported its official third quarter results upon the conclusion of an internal investigation into an employee hiding up to $151 million of expenses that led to a delay in reporting.

  As Yahoo Finance’s Brooke DiPalma reports, the tepid earnings report was broadly in line with the preliminary results shared last month.

  Macy’s reported adjusted earnings per share of $0.04, which beat Wall Street’s expectation of $0.03. Net sales declined 2.4% from a year ago to $4.74 billion, versus $4.75 billion expected. Same-store sales declined 1.3%, compared to estimates of 1.39%.

  The company lowered its full-year profit guidance as it closes stores in a turnaround push. It now expects adjusted profit per share of $2.25 to $2.50, versus its prior forecast of $2.34 to $2.69.

  Super Micro Computer (SMCI): The stock extended declines, falling over 8% despite comments from CEO Charles Liang, who said Tuesday that he does not believe the company will be delisted from the Nasdaq.

  As Yahoo Finance’s Laura Bratton has reported, shares have been on a wild ride in recent months as the company continues to grapple with the the fallout from an August report by short seller firm Hindenburg Research. The report pointed to alleged accounting malpractices, violations of export controls, and shady relationships between top executives and Super Micro partners.

  Shares had started the week under pressure after JPMorgan (JPM) analyst Samik Chatterjee on Monday maintained an Underweight rating on the stock. Shares are down about 50% over the past six months.

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  Moderation in housing inflation an ‘encouraging development’

  Housing prices have remained stubbornly high, proving to be a sticky category for inflation.

  But the latest Consumer Price Index (CPI) out Wednesday showed the pace of housing cost increases has begun to ease. Yahoo Finance’s Dani Romero reports:

  Data from the Bureau of Labor Statistics showed shelter costs, the largest component of CPI, rose 0.3% compared to the previous month in November. This was lower than October’s 0.4% increase. On an annual basis, shelter costs rose 4.7% in November, down from October’s year-over-year gain of 4.9% and the smallest 12-month increase since early 2022.

  Still, the shelter component accounted for 40% of November’s overall monthly CPI increase.

  “Finally, the slow grind lower in shelter inflation continued to play out last month, which is an encouraging development,” Jeff Schulze, head of economic and market strategy at ClearBridge Investments, wrote in a note to clients after the release.

  Economists have long expected a slowdown in rent increases, a trend that has been reflected in other data, but the broad cooldown in rents has not appeared in the CPI report. This discrepancy can be partly attributed to the BLS collecting rent data every six months, leading to a lag in reporting.

  The government said the index for rent rose 0.2% in November, the lowest since July 2021.

  Read more here.

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  Bitcoin mania: Prices leap to trade around $100,700 a token

  Bitcoin (BTC-USD) prices rocketed higher on Wednesday to cross the critical $100,00 mark again after November’s CPI report met expectations.

  In mid-morning trade, the largest cryptocurrency rose 5% to trade at around $100,700 a token.

  Other smaller cryptocurrencies and crypto-adjacent names mimicked bitcoin’s moves to the upside.

  Ethereum (ETH-USD) rose nearly 7% to trade around $3,800 a coin.

  Meanwhile, shares of MicroStrategy (MSTR), which owns nearly 280,000 bitcoins, climbed around 6%. The company recently announced the purchase of an additional 51,780 bitcoins for $4.6 billion. MicroStrategy’s bitcoin holdings are now worth $16.5 billion.

  Coinbase (COIN), which allows crypto trading on its platform, also saw shares rise roughly 6%.

  Bitcoin took a breather on Tuesday after prices enjoyed a record-setting rally on the heels of Donald Trump’s presidential win. His coming administration is viewed as generally more friendly to the alternative asset class.

  In July, Trump attended a bitcoin conference in Nashville and has since pledged to usher in more supportive regulation. His promises also included appointing a crypto Presidential Advisory Council and replacing current SEC Chair Gary Gensler, who has since announced he will step down on Jan. 20.

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  Markets price in all-but-certain rate cut next week

  Consumer price increases met expectations in November — but overall, inflation still remains hot.

  The sticky nature of the print “is a little disconcerting,” Paul Ashworth, chief North America economist at Capital Economics, wrote on Wednesday. “But we don’t expect it to persuade the Fed to skip another 25bp rate cut at next week’s FOMC meeting.”

  Immediately following the report, markets continued to price in another 25 basis point cut at the central bank’s meeting next week, with the odds of a cut rising to 98.1% from about an 89% chance one day prior.

  “As markets came into today’s figure with fears of an upside surprise, the in-line number is being received very positively,” wrote Seema Shah, chief global strategist at Principal Asset Management. “But overall, the Fed will be concerned by the very stubborn nature of inflation and will be increasingly cautious about the upside inflation risks that President-elect Trump’s policies may bring.”

  Trump’s proposed policies, such as high tariffs on imported goods, tax cuts for corporations, and curbs on immigrationm are considered by economists to be potentially inflationary. Those policies could further complicate the Fed’s path forward for interest rates.

  “We expect the Fed to move off autopilot in January, adopting a more cautious tone, and slowing its pace of cuts to just every other meeting,” Shah said.

  Assuming a 25 basis point cut next week, markets are pricing in another two to three cuts in 2025, according to the latest Bloomberg data.

  Read more here.

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  Stocks open higher as inflation data meets forecasts

  US stocks enjoyed broad-based gains early Wednesday as consumer prices rose as forecast in November, cementing bets the Federal Reserve will cut interest rates at its policy meeting next week.

  The Dow Jones Industrial Average (^DJI) moved up about 0.2%, while the S&P 500 (^GSPC) jumped nearly 0.5%. The tech-heavy Nasdaq Composite (^IXIC) added to the across-the-board gains, rising roughly 0.8%.

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  November inflation data meets forecasts

  New inflation data out Wednesday showed consumer prices rose as forecast in November, reflecting another month where price increases made little progress toward the Federal Reserve’s 2% target.

  The latest data from the Bureau of Labor Statistics showed that the Consumer Price Index (CPI) increased 2.7% over the prior year in November, a slight uptick from October’s 2.6% annual gain in prices. The yearly increase matched economist expectations.

  The index rose 0.3% over the previous month, matching economists’ expectations but higher than the 0.2% seen in October.

  On a “core” basis, which strips out the more volatile costs of food and gas, prices in October climbed 0.3% over the prior month, matching October, and 3.3% over last year for the fourth consecutive month.

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  Good morning. Here’s what’s happening today.