The Nasdaq took the high road to a record close Monday, while the Dow took the low road for the eighth consecutive day in the final full trading week of the year as investors geared up Wednesday's Federal Reserve interest rate decision.
The Dow Jones Industrial Average fell 110.58 points, or 0.25%, to end the session at 43,717.48, posting its longest run of losses since 2018.
The S&P 500 added 0.38% to close at 6,074.08 and the tech-heavy Nasdaq advanced 1.24% to finish the day at 20,173.89.
Bill Adams, chief economist for Comerica Bank, believes the Fed will cut the federal funds rate a quarter percent to a range of 4.25% to 4.50% at this week's decision. The FOMC will likely signal that rate cuts will continue in 2025, but at a slower pace than between September and December.
"Data releases this week will likely show consumer spending and business activity picked up as election uncertainty faded," he said in his weekly commentary. "S&P Global's flash estimate of the December Services PMI will likely point to continued growth, and the Manufacturing PMI a return to expansion for the industry."
Adams said that retail sales and personal consumption expenditures were likely solid in the kick-off of the holiday shopping season.
Total and core PCE inflation likely continued to run a bit above the Fed's target in November, he added.
Updated at 12:45 PM EST
Tech records
The Nasdaq hit a fresh intra-day high of 20,143.54 points Monday, as was last marked 1.07% higher on the session, as tech stocks continue to dominate the broader market rally heading into the final weeks of the year.
Micron Technology (MU) shares are one of the day's standout performers, rising 6.6% ahead of the memory chip maker's first fist quarter earnings after the close of trading on Wednesday.
Google parent Alphabet (GOOGL) also hit a fresh all-time peak of $199.78 each, with a market value of $2.43 trillion. The stock was last marked 4.2% higher on the session at $199.43 each.
Related: Top analyst revisits Micron stock price target ahead of Q1 earnings
Updated at 9:54 AM EST
Hot economy
S&P Global's first estimate of business activity in the U.S. this month jumped to 56.6, a near 2 increase from the final November and well ahead of the 50-point mark that separates growth from contraction.
The stronger-than-expected reading added to another move higher in Treasury yields, with 2-year notes rising to 4.243% and 10-year notes rising to 2 basis points to 4.393%.
Factory activity, however, fell below the 50-point mark to 48.3, likely as a result of uncertainty tied to President-elect Donald Trump's tariff plans.
"December saw raw material prices spike sharply higher amid supplier-led price rises and higher shipping costs, in a reflection of busier supply chains in advance of threatened protectionism in the new year," said S&P Global Market Intelligence's chief business economist Chris Williamson.
Services PMI best since March 2022
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) December 16, 2024
Services PMI in the United States increased to 58.50 points in December from 56.10 points in November of 2024 pic.twitter.com/k6vU5PEHOV
Updated at 9:34 AM EST
Solid open
The S&P 500 was marked 19 points, or 0.1% higher in the opening minutes of trading ,with the Nasdaq rising 105 points, or 0.53%.
The Dow gained 11 points while the mid-cap Russell 2000 slipped 4 points, or 0.18%.
S&P 500 Opening Bell Heatmap (Dec 16, 2024)$SPY +0.30%🟩$QQQ +0.59%🟩$DJI FLAT$IWM -0.27%🟥 pic.twitter.com/V32Dc5ZaZM
— Wall St Engine (@wallstengine) December 16, 2024
Stock Market Today
Stocks ended modestly lower on Friday, with the S&P 500 drifting into a weekly loss and the Nasdaq retreating back below the 20,000-point mark amid a notable surge in Treasury bond yields tied to concern about President-elect Donald Trump's economic agenda.
Benchmark 10-year Treasury note yields, which move in the opposite direction of prices, rose 24.5 basis points last week, the market's biggest five-day move in more than a year. The paper was last seen trading at 4.381% heading into the start of the New York session.
Traders also pared bets on Fed rate cuts into 2025, and while they have locked in a quarter point reduction from the central bank on Wednesday, the CME Group's FedWatch suggests not more than two more cuts over the coming 12 months.
Rate sensitive 2-year notes were last marked a 4.232% in overnight trading, around 1 basis point lower from Friday's close, with the U.S. dollar index marked 0.02% lower against a basket of its global peers.
Investors may be also content to protect the hard-fought gains recorded this year as the move into the traditionally thin late-December markets, with the S&P 500 now up nearly 26.4% since January.
U.S. stocks are also trading at the highest valuation gap compared with their international peers on record: Domestic indexes now represent an all-time high of 65% of global market value.
Related: Donald Trump's plans will test Fed interest rate cut bets in 2025
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500 suggest a 9-point opening bell gain, while those linked to the Dow Jones Industrial Average are priced for a 34-point advance.
The tech-focused Nasdaq, meanwhile, is called 55 points higher, with Nvidia (NVDA) , Palantir (PLTR) and Tesla (TSLA) active in premarket trading.
MicroStrategy (MSTR) shares were also active, rising 5.7% in premarket trading following news that the bitcoin holding company will be inserted into the Nasdaq starting on Dec. 23.
Bitcoin prices, meanwhile, briefly topped $106,000 each in overnight trading and were last marked at $104,695 each, taking their 2024 gain to around 137%.
More Wall Street Analysts:
- Top analysts unveil their S&P 500 forecasts for 2025
- Analysts overhaul MicroStrategy stock price target amid bitcoin rally
- Google analysts sent scrambling by startling break-up news
In overseas markets, Europe's Stoxx 600 was marked 0.3% lower in midday Frankfurt trading following a muted reading of December business activity and a surprise downgrade from Moody's on French government debt late Friday.
Britain's FTSE 100, meanwhile, slipped 0.31% in London with investors focused on the final Bank of England rate decision of the year later in the week.
Overnight in Asia, Japan's Nikkei 225 edged 0.03% lower in Tokyo with a Bank of Japan rate meeting coming Thursday. A series of muted economic data readings from China pulled the MSCI ex-Japan index 0.32% lower into the close of trading.
Related: Veteran fund manager delivers alarming S&P 500 forecast
