Overview:
On Thursday, December 12, 2024, Wall Street closed lower as investors evaluated key economic data and corporate updates ahead of next week’s Federal Reserve meeting. While producer prices for November rose more than expected, a moderation in service costs suggested continued disinflation. However, concerns about labor-market resilience emerged as unemployment claims unexpectedly climbed. Profit-taking in the technology sector, following recent highs, added to the pullback.
Investor sentiment remains focused on the Federal Reserve, with a 25-basis-point rate cut widely expected next week, though future rate adjustments remain uncertain.
Fear & Greed Index:
Neutral – Investors are cautiously balancing optimism about rate cuts with concerns over inflation persistence and labor-market softness.
Key Indices (Closed Prices):
- Dow Jones Industrial Average: -0.53% at 43,914.12
- S&P 500: -0.54% at 6,051.25
- Nasdaq Composite: -0.66% at 19,902.84
Sector Performance:
- Winners:
- Consumer Staples: The only sector in the green, buoyed by stability in defensive stocks.
- Losers:
- Technology: Declined, with key stocks like Nvidia (-1.4%) and Adobe (-13.7%) leading the sector lower. Adobe’s forecast of lower-than-expected 2025 revenue weighed heavily on the sector.
- Consumer Discretionary: Retail and media companies exhibited mixed performance, though Warner Bros. Discovery surged on restructuring news.
Key Movers:
- Adobe (ADBE): -13.7% – Shares plunged after forecasting fiscal 2025 revenue below Wall Street expectations, dampening sentiment in the tech sector.
- Warner Bros. Discovery (WBD): +15.4% – Soared on plans to separate its declining cable-TV business from streaming and studio operations.
- Microsoft (MSFT): +0.1% – Posted slight gains despite broader tech sector declines.
- Nordson (NDSN): -8.2% – Declined following weaker-than-expected fiscal 2025 revenue guidance.
- Centene (CNC): +1.9% – Rose after projecting 2025 profits above Wall Street estimates.
Economic Data:
- Producer Prices: November’s producer prices rose more than forecast, though moderation in service costs signaled ongoing disinflation.
- Unemployment Claims: Initial claims for unemployment benefits climbed unexpectedly, raising concerns about labor-market resilience.
Outlook:
As the Federal Reserve’s meeting approaches, markets remain focused on the trajectory of interest rate cuts and economic data trends. While technology stocks have fueled market rallies in recent months, profit-taking and mixed corporate earnings could create headwinds. Defensive sectors like consumer staples may gain traction as investors weigh risks associated with inflation and labor-market uncertainties.
