Traders work at the New York Stock Exchange on Dec. 17, 2024.
The Dow Jones Industrial Average jumped on Wednesday as traders looked ahead to the Federal Reserve's December interest rate decision.
The Dow was higher by about 126 points, or 0.2%. The 30-stock average posted a nine-day losing streak on Tuesday, its longest since 1978. If the Dow were to fall for a 10th day on Wednesday, it would be its worst losing streak since an 11-day slide in 1974.
The S&P 500 inched up 0.1%. The Nasdaq Composite was higher by 0.07%.
Nvidia, which fell into correction territory earlier this week, climbed more than 4%. Nvidia entered the Dow last month. Broadcom, the chip stock seeing big inflows this month as investors dumped Nvidia, pulled back 3%.
Get top local stories in DFW delivered to you every morning. >Sign up for NBC DFW's News Headlines newsletter.
The Dow's worst funk in 46 years was mostly caused by a rotation out of old economy shares and into technology stocks, a sector that the century-old measure underweights compared to broader market metrics. Despite the streak, the Dow sits roughly 3% from an all-time high. Other measures of the market are holding up this month, with the S&P 500 in the green for December and sitting less than 1% from an all-time high. The Nasdaq is up nearly 5% this month as investors flooded into tech shares, while shunning the Dow.
"We never say 'we told you so' because as soon as investors take that posture the market has a way of smacking them down," said Laffer Tengler Investments CEO Nancy Tengler. "But we will point out we have argued the tech trade, in general, is not over, and that we are in the early innings of a sustainable bull market."
The Fed's policy decision is due at 2:00 p.m. ET. Fed funds futures trading currently shows a 95% chance that the central bank will cut interest rates by a quarter percentage point, according to the CME FedWatch tool.
Money Report
Investors will also be paying close attention to Fed policymakers' Summary of Economic Projections and Fed Chair Jerome Powell's press conference, seeking clues about what might happen in the months ahead. The central bank is widely expected to temper expectations of more rate cuts in the approaching year, particularly as inflation remains stubborn.
"I think we'll get a cut ... but I think the language and the tenor will probably be as hawkish as we've seen from Powell in a while," said Ross Mayfield, investment strategist at Baird. "While they're not going to act on policy that hasn't yet been made, I think that they will be a little hesitant to commit to, say, four-plus rate cuts in 2025 when there's so much unsettled."
In turn, hawkish commentary on Wednesday could tee up stocks for a selloff. But Mayfield added he was optimistic that volatility around Fed meetings usually doesn't linger for very long.
Correction: An earlier version of this story misstated Nvidia's monthly performance.
Goldman says buy shares of MSCI
MSCI could have more upside potential heading into 2025, according to Goldman Sachs.
Shares traded marginally higher on Wednesday on the heels of analyst George Tong upgrading the stock to buy from neutral. His updated price target now reflects more than 18% upside potential, as of Tuesday's close.
"We believe conditions on the buy-side, which generates approximately 80% of total revenue at MSCI, are improving following 4-6 quarters of underperformance marked by fund closures, restructurings and consolidations caused by macro uncertainty, market volatility and elevated AUM outflows from active managers," the analyst wrote in a recent note to clients.
Moving into next year, Tong added that he expects momentum to continue due to a broadening of returns beyond the large-cap tech sector under the administration of President-elect Donald Trump. He also anticipates that organic revenue growth related to environmental, social and governance will see a reacceleration.
"We expect ESG organic revenue growth to reaccelerate in 2025, as well, driven by increased ESG visibility in the US post-election allowing fund managers to lean into strategies that will still see tailwinds in a Trump policy environment, and by regulatory tailwinds from SFDR in the EU that has already prompted sizable ESG equity inflows," he continued.
MSCI shares have had a positive run this year, posting year-to-date gains of more than 9%. The stock has also gained nearly 12% in the past three months.
— Sean Conlon
Nvidia exits correction territory
Nvidia's rally on Wednesday pulled the megacap technology stock out of a correction.
Shares of the artificial intelligence darling surged more than 4% in morning trading. If that holds, it would mark the stock's biggest one-day gain in around one month.
Wednesday's advance also propelled the stock outside of correction territory. That generally refers to a share price range that's at least 10% off of the stock's all-time closing high.
Nvidia was the best performer in the Dow and fourth-biggest gainer in the S&P 500 as of late Wednesday morning.
— Alex Harring, Adrian van Hauwermeiren
Housing starts, permits show a mixed bag in November
Building permits rose in November even as both housing starts and completions declined, the Census Bureau reported Wednesday.
Privately owned units authorized for construction totaled a seasonally adjusted annual rate of 1.505 million, up 6.1% from October and better than the Dow Jones consensus estimate for 1.43 million.
On starts, though, the total of 1.289 was off 1.8% from the month before and below the forecast for 1.34 million. Completions totaled 1.6 million, down 1.9%. However, single-family completions came to 1.038 million, better by 3,3% from October.
—Jeff Cox
Dow inches higher
The Dow Jones Industrial Average inched higher shortly after the opening bell on Wednesday, as Wall Street awaits the final Federal Reserve decision of 2024.
The 30-stock Dow gained 83 points, or 0.1%. The Nasdaq Composite ticked down 0.1%, while the S&P 500 pulled back 0.08%.
— Brian Evans
Nissan shares pop on reports of potential merger with Honda Motor
Nissan shares moved higher while Honda Motor stock slipped in the premarket, following media reports that the two Japanese automakers are considering a potential merger. Nissan shares gained 23.7% in the previous session, notching the firm's best day since at least 1985.
A report in the Nikkei newspaper said Honda and Nissan are considering operating under a holding company and will soon sign a memorandum of understanding.
Vivek Vaidya, global client leader for mobility at research firm Frost & Sullivan, told CNBC the merger was triggered by Nissan's financial underperformance. Nissan in November had posted disappointing second-quarter results and cut its full year revenue and operating outlook.
For more on the merger talks, read here.
— Pia Singh
General Mills, Nvidia among Wednesday's biggest premarket movers
These are the stocks making the biggest moves before the bell:
- General Mills — The maker of consumer food products such as Cheerios and Cocoa Puffs sank 4% after trimming its outlook for 2025.
- Jabil — The electronics components stock surged nearly 10% on stronger-than-expected fiscal first quarter earnings and guidance. The company lifted its full-year revenue and EPS guidance.
- Nvidia — Shares rose nearly 3% after four straight losing sessions. The chipmaker entered correction territory after falling 10% from its all-time high earlier in the week.
Read the full list of stocks here.
— Samantha Subin
Mortgage demand drops for the first time in 5 weeks
Mortgage rates moved markedly higher last week, causing overall mortgage demand to drop.
Total application volume fell 0.7% compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. That was the first decline in five weeks.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 6.75% from 6.67%, with points remaining unchanged at 0.66 (including the origination fee) for loans with a 20% down payment. That rate was just 8 basis points higher the same week one year ago.
The driver of the drop was refinance demand. It fell 3% for the week but was still 41% higher than the same week one year ago. While mortgage rates aren't that much lower now than they were a year ago, it may be that refinance volume is so low in general that any slight move makes for a large comparison.
— Diana Olick
Market performance on Fed days has been weakest under Chair Powell, Bespoke Investment Group says
Market performance on Fed days has been weakest during Powell's tenure as chair, as compared to the three other Fed chairs coming before him, according to a tweet from Bespoke Investment Group. The tweet added that this statistic was especially true in the last trading hour of the day.
On average, the S&P 500 rose just 0.11% under Powell. Under Yellen, the S&P 500 averaged a 0.16% rise, while this rose to 0.26% under Greenspan's tenure. Market performance on Fed days was at its highest under Bernanke's tenure, averaging a 0.50% advance.
— Lisa Kailai Han
Ten out of 11 sectors ended Tuesday's session negative
Ten of the 11 GICS sectors ended Tuesday in the red, led to the downside by industrials, which slipped 0.9%.
On the other hand, the consumer discretionary sector was the only one to end the day higher and gained 0.28%.
All sectors are still positive for the year, led by communication services, up 44.08%. Health care, which has added just 1.73%, is the laggard.
— Lisa Kailai Han, Christopher Hayes
Stocks futures are little changed
Stock futures traded near flat Tuesday night.
Futures tied to the Dow Jones, S&P 500 and Nasdaq 100 were all marginally below the flatline shortly after 6 p.m. ET.
— Lisa Kailai Han
