Investors became more comfortable with new inflation data as the stock market gained momentum in afternoon trades Tuesday. But the market still anxiously awaits Wednesday's Federal Reserve ruling on interest rates and further guidance on where those rates are going next year.
The Labor Department's consumer price index report prompted nervous reactions from traders as indexes jumped at first, then flattened as the morning wore on. But then the ball started rolling downhill for major stock indexes as the afternoon wore on.
The Dow Jones Industrial Average was up more than 175 points, or nearly 0.5%, as the trading day neared an end. The S&P 500 added 0.4% while the Nasdaq was up 0.6%. The small-cap Russell 2000 lagged its bigger counterparts at first but eventually joined the party and climbed 0.2%.
Meanwhile, 10-year Treasury note yields ticked down slightly. And volume on both the New York Stock Exchange and Nasdaq was down vs. the same time on Monday.
The CPI report showed an overall 0.1% inflation rate for November — just above estimates for a flat reading — compared with October. Year over year, the inflation rate fell to 3.1% from October's 3.2%, as expected. Core prices that exclude food and energy rose 0.3% vs. October, and 4% annually, both in line with estimates.
The report also showed that energy prices fell 2.3% month to month, and 5.4% from November 2022. Coincidentally, West Texas intermediate crude fell 3.6% Tuesday. Energy prices have wreaked havoc on shares of oil giants such as Exxon Mobil and Chevron. The two oil majors have conservative spending plans for 2024.
Now the markets will turn their gaze to Wednesday's Fed meeting to see whether the CPI data will have an effect on plans for interest rates. Fed governors are expected to leave interest rates alone and some market watchers see a cut in the cost of borrowing next year.
Stock Market: Oracle Plunges On Cloud Concerns
Among stocks in the news, shares of Oracle plunged more than 12% in Tuesday's trading. Late Monday, the database giant reported lighter-than-expected sales for its fiscal second quarter, raising questions about Oracle's cloud strategy. Growth slowed specifically for the company's Oracle Cloud Infrastructure business.
Toy giant Hasbro pared losses of 5% in premarket trading and was down just 1.2% in recent action. The company announced late Monday it was cutting 1,100 more jobs, on top of 800 layoffs earlier this year. Hasbro's chief executive told employees in a memo that the company was seeing weaker-than-expected toy sales through the first nine months of the year, according to the Wall Street Journal.
Shares of Microsoft posted fractional gains after a report said that a fund run by Cathie Wood made its first purchase of the software giant's stock in nine months, as the investing guru is upping her investments in artificial intelligence. Wood's ARK Next Generation Internet exchange traded fund bought more than 8,800 shares of Microsoft on Monday, Bloomberg said.
The fund also bought more than 10,000 shares of Facebook parent Meta Platforms, its first buy of that stock in about five months. Meta shares have drifted in and out of a buy zone in recent weeks. They surged back into the buy area with a 2.6% gain Tuesday.
Amazon.com shares climbed nearly 1% on the stock market today after a report said that an executive in the company's drone delivery unit has left the e-commerce giant. Sean Cassidy directed the company's drone delivery efforts and was Amazon's primary liaison with the Federal Aviation Administration. He announced his departure in a note to employees last week, CNBC reported.
And it was reported that Ford would slash production of its all-electric F-150 Lightning pickup truck by half in 2024. Ford stock was up 0.8%.
Stocks Making Moves In Buy Zones
Meanwhile, a number of stocks on the IBD 50 strengthened their positions in buy zones or moved near an entry point.
Booking Holdings climbed 1.5% Tuesday, to the top of its buy zone. The stock initially moved into buy territory Friday and surged higher Monday. Booking was in an 83-day consolidation prior to its breakout.
United Rentals jumped 1.8% and surged through its buy zone. It also climbed back into that territory on Friday. Shares initially broke out of a cup with handle on Dec. 1, but retreated before making another advance late last week.
Snowflake was hovering just above a 192.66 buy point after it ventured past that entry in Monday's trades. The stock turned slight losses to meager gains as the Tuesday trading day wore on. Snowflake started forming a long cup with handle in mid-June.
Cloudflare continued to trade tightly in a buy zone where it's hovered since Nov. 29. That's when the network services provider broke out of a cup base with an entry of 76.07. Cloudflare was recently featured in IBD's The New America.
Stock Market: Magnificent Seven Mixed
Elsewhere, the so-called Magnificent Seven stocks were seeing mixed results on the market in morning trades — on top of the gains posted by Amazon, Microsoft and Meta.
Tesla dropped nearly 3% as it works on a double-bottom base that has been forming since July. The electric-vehicle maker's insurance registrations in China dropped more than 12% last week from the week before. Tesla, however, is on pace for a record fourth quarter in sales. It also announced its Model Y vehicle has sold out.
Nvidia jumped 1.8% as the artificial intelligence player tries to reclaim the buy zone it drifted out of late last month. Nvidia worked its way out of a double-bottom base in early November before drifting back. Its buy point is 476.09.
Google parent Alphabet was off slightly and now has fallen below its 50-day moving average. The search and online ad giant is struggling to break out of a cup with handle.
And Apple moved past its 192.93 entry in the stock market Tuesday. The iPhone maker released a new Journal app as part of its latest update for the devices. Powered by AI, the app offers suggestions for those who want to keep an electronic diary of their daily activities.
