Nasdaq Today- Dow Closes Higher, Micron Falls on Weak Outlook
Nasdaq Today– Stocks finished mixed on Thursday as markets continued to react to the Federal Reserve’s surprisingly hawkish rate decision from the previous day. While the Dow Jones Industrial Average managed to edge into positive territory, the broader market showed signs of caution following the Fed’s latest monetary policy outlook.
Dow Breaks Losing Streak, But Market Sentiment Remains Cautious
The Dow Jones Industrial Average gained 15.37 points, or 0.04%, to close at 42,342.24, breaking a 10-day losing streak—the longest negative run since 1974. Despite the modest gain, the broader market sentiment remained volatile. The S&P 500 lost 0.09%, finishing at 5,867.08, while the tech-heavy Nasdaq slipped 0.10% to end the session at 19,372.77.
Adam Turnquist, chief technical strategist at LPL Financial, highlighted that “yesterday’s FOMC meeting brought back some unwanted clouds of uncertainty over monetary policy next year.” He added that “at a minimum, market expectations have shifted toward a shallower- and slower-than-anticipated rate-cutting cycle.”
Fed’s Hawkish Outlook Weighs on Market Sentiment
The Federal Reserve’s decision to hold rates steady, accompanied by its forecast of a more gradual rate-cutting cycle, has sparked concerns about the future direction of monetary policy. With inflation still considered “somewhat elevated” and the economy remaining resilient, the central bank has dialed back its expectations for rate cuts in 2025. This shift in outlook has contributed to a sense of caution among investors, particularly as the Fed’s revised projections came alongside an assessment that the U.S. economy remains on solid footing despite rising rates.
Turnquist also pointed to broader market dynamics, noting that “the near-term risk remains to the upside for 10-year Treasury yields and the dollar, creating potential headwinds for stocks.” He recommended waiting for support to be established and momentum to improve before considering buying into the current market dip.
Micron Technology Faces Sharp Decline After Tepid Outlook
One of the day’s biggest losers was Micron Technology, whose stock price dropped sharply following its earnings report. The memory chip maker, which also produces crucial components for AI hyperscalers, posted a muted near-term revenue outlook despite a solid first-quarter earnings report. As a result, Micron’s shares fell 15.8%, marking their biggest decline in four years. At one point, Micron shares traded as low as $87.48, a price not seen since early August.
While Micron remains optimistic about the long-term growth of the HBM market, forecasting it will grow to $100 billion by 2030 and capturing around 20% of the market, the company’s short-term guidance has left investors wary.
Home Sales Show Signs of Recovery Despite Rising Mortgage Rates
In the housing market, existing home sales saw a significant rebound in November, rising 4.8% from October levels to a seasonally adjusted pace of 4.15 million units. This increase marked the highest level of sales in eight months, signaling some recovery in the sector. However, these gains must be viewed in context. September’s figures had been the lowest in 14 years, and inventory remains scarce due to the ongoing rise in mortgage rates.
Despite these challenges, the positive data provided a glimmer of hope for the housing market, which has been under pressure from rising borrowing costs.
Jobless Claims and GDP Growth Remain Strong
On the economic front, U.S. jobless claims continued to decline. The Labor Department reported that around 220,000 Americans filed for jobless benefits last week, a drop of 22,000 from the previous period and the lowest level since early November. This decline suggests a resilient labor market, which could continue to support consumer spending and economic growth in the face of rising interest rates.
Additionally, the Commerce Department revised its estimate for third-quarter GDP growth upwards to 3.1%, up from an initial estimate of 2.8%. This increase was largely driven by stronger-than-expected consumer spending, which helped offset weaker corporate profits. In response to the positive economic data, stocks extended their premarket gains, with the S&P 500 set to open 36 points higher and the Nasdaq up by 132 points.
Bank of England Holds Rates Steady Amid Economic Uncertainty
Across the Atlantic, the Bank of England (BoE) held its key lending rate steady at 4.75% following its final policy meeting of the year. The decision came after a surprise contraction in the U.K.’s broader economy and a rise in inflation in November. The BoE’s vote to maintain rates was split 6-3, reflecting the ongoing challenges facing the post-Brexit economy.
BoE Governor Andrew Bailey commented that “with the heightened uncertainty in the economy we can’t commit to when or by how much we will cut rates in the coming year,” signaling that the central bank will proceed cautiously in managing inflation and growth.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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