Overview:
The U.S. stock market saw strong performance on Tuesday, September 24, 2024, as both the S&P 500 and Dow Jones Industrial Average closed at record highs, driven by a surge in mining and materials stocks following a sweeping stimulus package announcement from China. The Dow Jones climbed 0.20% to close at 42,208.22, while the S&P 500 rose 0.25% to end the day at 5,732.93. The Nasdaq Composite gained 0.56%, closing at 18,074.52, helped by strength in technology stocks.
China’s announcement of new stimulus measures, including interest rate cuts and direct equity market support, boosted investor confidence, especially in cyclical industries like metals and mining. Stocks such as Freeport-McMoRan, Southern Copper, and Albemarle all saw substantial gains. Despite weaker-than-expected consumer confidence data from the U.S., investor sentiment remained buoyed by China’s policy actions.
Fear & Greed Index:
Greed – Investors showed increasing confidence in risk-on assets, as stimulus from China and rising metal prices boosted market sentiment.
Key Indices (Closed Prices):
- Dow Jones Industrial Average: +0.20% at 42,208.22
- S&P 500: +0.25% at 5,732.93
- Nasdaq Composite: +0.56% at 18,074.52
Sector Performance:
- Winners:
- Materials: The sector outperformed with a 1.35% gain, supported by China’s stimulus measures. Freeport-McMoRan surged 7.93%, Southern Copper rose 7.22%, and Albemarle climbed 1.97% on higher metal prices.
- Technology: Major tech stocks saw mixed performance, with Nvidia gaining 3.9%, while Microsoft fell 1.15%. The Philadelphia Semiconductor Index rose 1.23% as chipmakers like Qualcomm and Intel posted gains of 0.54% and 1.11%, respectively.
- Losers:
- Financials: The financial sector declined, with Visa dropping 5.49% after the U.S. Department of Justice filed a lawsuit against the company for alleged antitrust violations. This contributed to a 0.92% drop in the financials sector.
Key Movers:
- Freeport-McMoRan (FCX): Rose 7.93% after metal prices surged due to China’s stimulus package aimed at pulling its economy out of a deflationary slump.
- Southern Copper (SCCO): Gained 7.22%, benefiting from higher copper prices and China’s policy actions.
- Visa (V): Dropped 5.49% after being sued by the U.S. Department of Justice for alleged antitrust violations, pressuring the financials sector.
- Alibaba (BABA): Soared 7.88%, while PDD Holdings gained 11.79%, tracking gains in Chinese-listed firms following China’s policy announcements.
Economic Data:
- Consumer Confidence: The Conference Board reported an unexpected decline in U.S. consumer confidence for September, driven by concerns about the labor market.
- Inflation Outlook: Federal Reserve Governor Michelle Bowman cautioned that key inflation measures remain “uncomfortably above” the central bank’s 2% target, highlighting the need for caution in cutting rates further.
- Jobless Claims: Investors are focused on weekly jobless claims and Personal Consumption Expenditures (PCE) data expected later in the week, which are likely to provide further clues about the strength of the labor market and inflation.
Outlook:
Despite weaker-than-expected consumer confidence data, the U.S. stock market ended Tuesday on a positive note, driven by rising commodity prices and optimism surrounding China’s economic stimulus. Materials and mining stocks are expected to continue outperforming as China’s policy measures filter through the global economy. Tech stocks also showed resilience, though financials were weighed down by concerns about Visa’s legal challenges.
Looking ahead, investors are keeping an eye on key inflation data and jobless claims reports to gauge the Fed’s next move, especially as inflation pressures remain elevated. The PCE report, in particular, is expected to be a significant driver of market sentiment later this week.