The Dow Jones Industrial Average and the Nasdaq headed in different directions at the close Wednesday after the Federal Reserve released minutes of its December meeting. Artificial intelligence giant Nvidia tested a key level in the wake of a huge drop. And Tesla reversed higher on the stock market today after a precipitous fall.
Dow stocks managed to eke out a 0.3% gain at the close, and were up more than 100 points. The tech-dominated Nasdaq dipped a fraction, but managed to stay above its 50-day moving average. The Dow, meanwhile, has some work to do before it catches up to that level.
The benchmark S&P 500 added 0.2% on Wednesday. Small caps remained under pressure, however, as the Russell 2000 dropped 0.5%, significantly underperforming the other indexes. But that index appears to be finding support above the 2,200 level.
Volume on both the New York Stock Exchange and the Nasdaq was lower compared with the same time on Tuesday, which saw record trading in the Nasdaq. On Wednesday, decliners outnumbered advancers by roughly 4-to-3 on the NYSE and 2-to-1 on the Nasdaq.
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Minutes of the Fed meeting held in December — when the board cut rates to a range of 4.25%-4.5% — showed that "the Committee was at or near the point at which it would be appropriate to slow the pace of policy easing." Recent data on economic activity and consumer spending had also been stronger than expected.
The Fed's mid-December inflation forecast for 2024 was slightly higher than in the November meeting. Inflation in 2025 was expected to remain at about the same rate as in 2024 and fall to 2% by 2027. The committee also expressed concerns over inflation wrought by potential tariffs from President-elect Donald Trump, according to the Wall Street Journal.
But according to the quarterly update to the Fed's Summary of Economic Projections in December, the median estimate indicated another 50 basis points in cuts this year.
Friday's payroll data for December is on watch. Economists estimate that the economy added 157,000 jobs after November's 227,000 hires.
3 p.m. ET
Rate Cuts Deemed Appropriate
On Wednesday, Fed Gov. Christopher Waller said at the Organization for Economic Cooperation and Development in Paris that rate cuts would be appropriate.
The stock market will be closed Thursday as it observes the national day of mourning for former President Jimmy Carter. The NYSE, Nasdaq and Cboe Global Markets will be closed. Bond markets will close at 2 p.m. ET.
1:55 p.m. ET
Two Stocks Give Sell Signals
In stocks, two issues triggered sell signals. Aris Water Solutions and OSI Systems fell below their 50-day moving average in heavy volume.
12:18 p.m. ET
Dow Jones Stocks: Nvidia Flat
Health care stocks weighed on the Dow. Merck and Johnson & Johnson fell 2% each.
Another Dow stock, Nvidia, rose 2% at the open but quickly erased those gains. About one hour into the session, shares were up 0.3%. The stock is trying to turn resistance at the 50-day line into a support level. In morning trading, shares held above the line.
10:46 a.m. ET
Labor Data Mixed
In economic news, the ADP jobs report showed private payrolls rose 122,000 in December but missed estimates of 134,000. Initial jobless claims of 201,000 were lower than the consensus estimate of 216,000.
The yield on the benchmark 10-year Treasury note was flat at 4.68% — still up near an April high.
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A few high-flying names of 2024 continued their descent after selling off Tuesday. Palantir headed lower for a third straight day Wednesday, approaching a key level of support at the 50-day moving average. The 2024 top S&P 500 performer earned an underweight rating from Morgan Stanley on Monday. MicroStrategy continued to struggle with its 50-day moving average.
Advanced Micro Devices fell after HSBC downgraded the stock to reduce from buy with a price target of 110, down from 200. Shares have been in a downtrend since they fell below the 50-day line in October. The Nvidia rival has invested $20 million in Absci, which uses artificial intelligence for drug discovery.
Tesla regained a modest part of the 4% it lost on Tuesday.
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Stock Market Today: Quantum Stocks Tumble
Quantum computing stocks tumbled further on Wednesday. D-Wave Quantum and IonQ dived nearly 40% each, giving up much of their recent gains. IonQ undercut its 50-day moving average in heavy volume.
The drop comes after Nvidia Chief Executive Jensen Huang said late Tuesday that quantum computing could take at least 15 years to become useful.
SolarEdge fell after Citigroup downgraded the stock to sell from neutral with a price target of 9. SolarEdge has been trending lower for a year and a half.
Instacart parent Maplebear jumped nearly 5%, clearing the 50-day moving average as it forms a cup base, on news that it will join the S&P MidCap 400 index.
Shares of Cal-Maine moved higher on earnings. Sales of $954.7 million and earnings of $4.47 per share easily beat estimates of $751.5 million and $4.05, respectively. A seasonal boost in demand for eggs and higher prices amid a bird flu outbreak helped sales.
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