Overview:
On Tuesday, October 8, 2024, U.S. stock markets rebounded from Monday’s losses, with all major indices closing higher as investors bought back into technology stocks. The Dow Jones Industrial Average gained 0.30% to close at 42,080.37, the S&P 500 rose by 0.97% to 5,751.13, and the Nasdaq Composite led the charge, climbing 1.45% to 18,182.92. This recovery was largely driven by easing Treasury yields and optimism ahead of upcoming inflation data and the start of the third-quarter earnings season.
Investors were drawn to high-growth stocks in the technology sector as lower debt costs made them more attractive. Major tech names like Nvidia, Apple, Tesla, and Meta Platforms posted gains, while Palantir Technologies and Palo Alto Networks surged by 6.6% and 5.1%, respectively.
Fear & Greed Index:
Greed – The easing of Treasury yields and strong buying in the tech sector fueled positive investor sentiment, leading to a recovery from the previous session’s losses.
Key Indices (Closed Prices):
- Dow Jones Industrial Average: +0.30% at 42,080.37
- S&P 500: +0.97% at 5,751.13
- Nasdaq Composite: +1.45% at 18,182.92
Sector Performance:
Winners:
- Information Technology: The sector led gains, rising 2.1%, supported by notable performances from Nvidia (+4.1%), Palantir Technologies (+6.6%), and Palo Alto Networks (+5.1%).
Losers:
- Energy: The S&P energy index fell 2.6%, marking its largest one-day loss since August 20, as oil prices retreated after Monday’s rally.
- Materials: The sector declined 0.4%, pressured by slipping metal prices amid waning optimism over China’s stimulus measures.
Key Movers:
- Nvidia (NVDA): Rose 4.1%, marking its largest one-day percentage gain in a month, as investors flocked to high-growth tech stocks.
- Palantir Technologies (PLTR): Surged 6.6% on strong demand for its data analytics platform.
- Apple (AAPL) and Tesla (TSLA): Gained 1.4% and 1.8%, respectively, helping to bolster the tech-heavy Nasdaq.
- PepsiCo (PEP): Gained 1.9% after reporting adjusted earnings per share that exceeded estimates, despite trimming its forecast for annual sales growth.
- Alibaba Group (BABA): Fell 7.5% along with other U.S.-listed Chinese companies, as optimism over China’s economic stimulus measures faded.
Economic Data:
- Treasury Yields: Eased slightly after surging on Monday, providing relief to high-growth sectors like technology. Investors continue to focus on the Federal Reserve’s interest rate path, with traders pricing in an 89% chance of a 25-basis-point rate cut at the Fed’s November meeting.
- Inflation Data: Investors are eagerly awaiting the release of Consumer Price Index (CPI) data this Thursday, which is expected to offer further clues on the Federal Reserve’s monetary policy direction.
Outlook:
With the third-quarter earnings season kicking off later this week, investors are focused on the performance of major financial institutions like JP Morgan Chase, Wells Fargo, and BlackRock. The market remains optimistic, with the estimated earnings growth rate for the S&P 500 projected at 5% for the quarter. Additionally, inflation data due this Thursday could provide more insight into the likelihood of a Federal Reserve rate cut at its upcoming meeting.