Tag: Dow Jones Industrial Average

U.S. stocks struggle to resume climb as Dow edges higher after notching 5th straight record close
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U.S. stock indexes were higher on Wednesday as Wall Street tried to build on their year-end rally with a fresh record in sight for the S&P 500 index.

How are stock indexes trading
- The S&P 500
  SPX
  was inching up 3 points, leaving it nearly flat, at 4,771
- The Dow Jones Industrial Average
  DJIA
  was rising 15 points, leaving it nearly flat, at 37,570
- The Nasdaq Composite
  COMP
  was edging up 35 points, or 0.2%, to 15,038
On Tuesday, the Dow booked a fifth straight record close, while the S&P 500 rose and the Nasdaq extended its winning streak to a ninth day.
What’s driving markets

U.S. stocks were edging higher on Wednesday with the S&P 500 less than 1% shy of the all-time closing high of 4796.56 it recorded at the start of January 2022, while the Dow industrials and Nasdaq were struggling to extend their nine consecutive daily gains.

The Wall Street large-cap benchmark S&P 500 has jumped 24.3% this year, partially powered by hopes that the U.S. economy has not been too badly damaged by the Federal Reserve’s ratcheting up of interest rates to cool inflation.

The latest leg of the rally reflects hopes that with inflation back down to 3.1%, the central bank will begin quickly trimming borrowing costs next year. Not even an concerted effort by Fed officials to counter the market’s rate-cut optimism has damped trader’s ardor.

This dismissal of less-dovish Fedspeak has left some observers bemused.

“Investors are dreaming of aggressive rate cuts in an environment of strong economic growth, and that is not the right recipe for easing inflation and keeping it sufficiently low,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “The robust economic data and high earnings expectations are not compatible with a dovish Fed,” she said.

See: Why the 60-40 portfolio is poised to make a comeback in 2024

Perhaps the current bullishness is also reflective of seasonal trends, with optimism about a festive bounce underpinning stocks. The “Santa Claus Rally” period stretches from the last five trading days of the year and first two trading days of the new year, according to the Stock Trader’s Almanac.

Since 1950, the S&P 500 has averaged a gain of 1.32% and closed higher 78.1% of the time over that period, according to Dow Jones Market Data.

SOURCE: DOW JONES MARKET DATA

In U.S. economic data, existing-home sales rose 0.8% in November to 3.82 million, the National Association of Realtors said on Wednesday. Sales of previously owned homes unexpectedly inched up last month, snapping a five-month slump as easing mortgage rates encouraged some U.S. homebuyers.

Meanwhile, U.S. consumer confidence index rose to 110 in December, up from a downwardly revised 101 in the previous month, the Conference Board said Wednesday.

“The consumer is feeling pretty well as rates move lower, employers add to their payroll, and income expectations improve,” said Jeffrey J. Roach, chief economist at LPL Financial. “So far, investors have a green light as they merge into the new year.”

That said, investors will continue seeking guidance from more economic data due later this week that may provide more clarity on the Fed’s interest-rate path in 2024. A revision of third-quarter GDP print is expected on Thursday morning, followed by Friday’s personal consumption expenditure (PCE) inflation report — the Fed’s preferred inflation gauge.

Companies in focus

Shares of Alphabet Inc.
GOOGL,
+2.82%
were jumping 3.3% on Wednesday following a report that said its Google unit plans to reorganize a large part of its advertising sales unit.

Shares of FedEx Corp.
FDX,
-10.56%
were slumping 11% after the package-delivery giant trimmed its full-year sales forecast, amid continued concerns about subdued shipping demand through the peak holiday season.

Shares of General Mills Inc.
GIS,
-2.26%
were off 2.8% after the consumer-foods company reported fiscal second-quarter profit that beat expectations, while revenue missed and the full-year outlook as consumers continue “stronger-than-expected value-seeking behaviors.”

Toro Corp.’s stock
TORO,
-2.15%
was down 2.2% despite the lawn mower company’s fourth-quarter profit and revenue beat analyst estimates.
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December 20, 2023
How Fed rate moves could impact different sectors of the stock market in 2024

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Wall Street seems to agree that U.S. stocks will climb to fresh record highs in 2024. But the most important question for investors may still be the direction and speed of interest-rate moves.

Rate-sensitive groups of stocks with lackluster fundamentals, such as financials, utilities, staples, “may be able to outperform, at least early in the year,” if one expects interest rates “to come down quickly and permanently,” said Nicholas Colas, co-founder of DataTrek Research.

But if “one expects a bumpier ride on the rate front,” then stronger groups, like technology and tech-adjacent sectors “should do better,” Colas said in a Monday client note.

The S&P 500’s utilities, consumer staples and energy sectors have been the worst performing parts of the large-cap benchmark index so far in 2023, according to FactSet data.

With an over 10% year-to-date decline, the S&P 500’s utilities sector
XX:SP500.55
has significantly underperformed the broader index’s
SPX
23.6% advance.

The S&P 500’s best performing information technology sector
XX:SP500.45
was up 56.5% for the same period. But its consumer staples
XX:SP500.30
and energy
XX:SP500.10
sectors have slumped by 2.6% and 4.1% so far this year, respectively, according to FactSet data.

Utilities and consumer staples are usually considered defensive investment sectors, or “bond proxies,” because they can help investors minimize stock-market losses in any economic downturn. Companies in these sectors usually provide electricity, water and gas, or they sell products and services that consumers regularly purchase, regardless of economic conditions.

However, utilities and consumer staples stocks were under a lot of pressure this year. A relentless climb in U.S. Treasury yields in October made defensive stocks less attractive compared with government-issued bonds, or money-market funds offering 5%, especially as the economy remained strong, pushing recession expectations out further.

Colas expects “weaker groups” to catch a stronger tailwind if rates continue to decline.

See: Markets are declaring victory over inflation for Powell, and that has some economists worried

The yield on the 10-year Treasury
BX:TMUBMUSD10Y
last week booked its biggest weekly decline in a year after the Federal Reserve signaled a pivot to rate cuts in 2024, which helped the S&P 500 score its longest weekly winning streak since 2017.

The S&P 500’s utilities and consumer staples sectors rose 0.9% and 1.6% last week, respectively, compared with the information technology sector’s 2.5% advance and communication services sector’s
XX:SP500.50
0.1% decline, according to FactSet data.

Earnings growth expectations for each S&P 500 sector in 2024 are indicated below. Sectors to the left of the dotted black line are expected to show better bottom-line results than the S&P 500 as a whole, while those to the right are expected to show weaker earnings growth.

SOURCE: FACTSET, DATATREK RESEARCH

Wall Street expects next year to see 11.5% growth in S&P 500 earnings-per-share (EPS), to $244, and 5.5% revenue growth, according to FactSet data.

However, there is a wide dispersion across S&P 500 sectors. The range goes from 2% revenue and 3% earnings growth for the energy sector, to 9% revenue and 17% earnings growth for the information technology sector, according to data compiled by DataTrek Research.

“Playing fundamentally weaker sectors therefore assumes even more good news on the rate front,” Colas said, adding that it still is riskier than sticking with “tried and true groups” like technology.

Moreover, sectors such as utilities, financials and consumer staples are not expected to show 10% earnings growth next year, while health care and big tech-dominated groups like communication services, technology and consumer discretionary, are expected to show much better than average revenue and earnings growth in 2024, said Colas, citing FactSet data.

U.S. stocks closed higher on Monday, with the Dow Jones Industrial Average
DJIA
building on its all-time high set last week. The S&P 500 gained 0.5% and the Dow Industrials closed fractionally higher. The Nasdaq Composite
COMP
finished up 0.6%, according to FactSet data.

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December 18, 2023
Fed sparking irrational market optimism over potential rate cuts, former FDIC Chair Sheila Bair warns

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Market optimism over the potential for interest rate cuts next year is dangerously overdone, according to former FDIC Chair Sheila Bair.

Bair, who ran the FDIC during the 2008 financial crisis, suggests Federal Reserve Chair Jerome Powell was irresponsibly dovish at last week’s policy meeting by creating “irrational exuberance” among investors.

“The focus still needs to be on inflation,” Bair told CNBC’s “Fast Money” on Thursday. “There’s a long way to go on this fight. I do worry they’re [the Fed] blinking a bit and now trying to pivot and worry about recession, when I don’t see any of that risk in the data so far.”

After holding rates steady Wednesday for the third time in a row, the Fed set an expectation for at least three rate cuts next year totaling 75 basis points. And the markets ran with it.

The Dow hit all-time highs in the final three days of last week. The blue-chip index is on its longest weekly win streak since 2019 while the S&P 500 is on its longest weekly win streak since 2017. It’s now 115% above its Covid-19 pandemic low.

Bair believes the market’s bullish reaction to the Fed is on borrowed time.

“This is a mistake. I think they need to keep their eye on the inflation ball and tame the market, not reinforce it with this … dovish dot plot,” Bair said. “My concern is the prospect of the significant lowering of rates in 2024.”

Bair still sees prices for services and rental housing as serious sticky spots. Plus, she worries that deficit spending, trade restrictions and an aging population will also create meaningful inflation pressures.

“[Rates] should stay put. We’ve got good trend lines. We need to be patient and watch and see how this plays out,” Bair said.

Disclaimer

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December 18, 2023
U.S. Steel Stock Soars on $14.9 Billion Acquisition by Nippon Steel

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U.S. Steel Stock Soars on $14.9 Billion Acquisition by Nippon Steel

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December 18, 2023
CNBC Daily Open: The Fed attempts to rein in markets

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A trader works, as a screen displays a news conference by Federal Reserve Board Chairman Jerome Powell following the Fed rate announcement, on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 13, 2023.

Brendan Mcdermid | Reuters

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Asia markets fall
U.S. markets mostly rose Friday amid a tumultuous day of trading, giving major indexes their seventh consecutive week of gains. However, Asia-Pacific markets slumped Monday, with Hong Kong’s Hang Seng index falling around 1%. It was dragged down by shares of SenseTime, which plunged as much as 18.25% to its all-time low on news the company’s founder had passed away.

Cooling the heat
The U.S. Federal Reserve’s last meeting, during which it indicated three rate cuts for 2024, sparked “irrational exuberance,” said FDIC Chair Sheila Bair. It seems the Fed’s aware of that, and is trying to dampen market optimism. “We aren’t really talking about rate cuts right now,” New York Federal Reserve President John Williams told CNBC.

Lowered risk appetite
For the first half of the year, family offices in Asia had bet big on risky assets, said Hannes Hofmann of Citi Private Bank. That’s because Asian family offices were anticipating a rebound in China’s economy. But as the country’s economy slows down and Asian stock markets lag behind that of the U.S., that appetite for risk’s dwindling, according a Citi Private Bank global survey.

AI job losses
There are signs humans are losing jobs to artificial intelligence. According to a recent report from ResumeBuilder, 37% of respondents say AI has replaced workers this year, while 44% report AI will result in layoffs in 2024. But experts say this trend isn’t a wholesale replacement of humans — but a redefinition of the sort of jobs we can do.

[PRO] ‘Poised to pounce’
Jefferies is “poised to pounce” on several global stocks next year, the investment bank’s analysts wrote. Three stocks, which include companies with strong cash flows and attractive risk-reward ratios, made it to Jefferies’ top choices for 2024. And all of them have at least a 60% potential upside.

The bottom line

The “everything rally” spurred by Wednesday’s Federal Reserve meeting appears to have lost its legs — not least because the Fed itself seemed slightly spooked by how aggressively markets are pricing in rate cuts for next year.

According to the dot plot, which is a projection of where Fed officials expect interest rates to be in the future, there could be three 25-basis-point cuts next year. But markets think there’s more than a 38% chance rates will plummet to a range of 3.75% to 4% — that’s six 25-basis-point cuts — by December next year, according to the CME FedWatch Tool.

On Friday, New York Federal Reserve President John Williams tried to rein in some of that exuberance.

“I just think it’s just premature to be even thinking about that,” Williams said, when asked about futures pricing for a rate cut in March.

Williams even warned rates might go up.

“One thing we’ve learned even over the past year is that the data can move and in surprising ways, we need to be ready to move to tighten the policy further, if the progress of inflation were to stall or reverse.”

That could be one reason why markets were shaky Friday. The S&P 500 was essentially unchanged, the Dow Jones Industrial Average climbed 0.2% and the Nasdaq Composite added 0.4%.

That said, Friday also saw a quarterly event known as “triple witching,” the confluence of expiring stock index futures and options, as well as individual stock options. Furthermore, the S&P and Nasdaq-100 rebalanced their indexes, meaning the weight of some stocks on the index was changed. That could have exaggerated price moves and increased volatility as investors, accordingly, rebalanced their portfolios.

Finally, perhaps investors shouldn’t be surprised or disappointed the rally’s subsiding. “The market doesn’t go up every day, no matter how strong a trend is,” Chris Larkin, managing director of trading and investing at E-Trade points out. “Pullbacks and pauses are inevitable, regardless of how big they are or how long they last.”

The corollary to that is even a decline won’t last. Barring any shocks, signs are pointing to Santa spreading cheer in markets as the year wraps up.

— CNBC’s Yun Li contributed to this report.

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December 17, 2023
Fed could be the Grinch who 'stole' cash earning 5%. What a Powell pivot means for investors.

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Yields on 3-month
BX:TMUBMUSD03M
and 6-month
BX:TMUBMUSD06M
Treasury bills have been seeing yields north of 5% since March when Silicon Valley Bank’s collapse ignited fears of a broader instability in the U.S. banking sector from rapid-fire Fed rate hikes.

Six months later, the Fed, in its final meeting of the year, opted to keep its policy rate unchanged at 5.25% to 5.5%, a 22-year high, but Powell also finally signaled that enough was likely enough, and that a policy pivot to interest rate cuts was likely next year.

Importantly, the central bank chair also said he doesn’t want to make the mistake of keeping borrowing costs too high for too long. Powell’s comments helped lift the Dow Jones Industrial Average
DJIA
above 37,000 for the first time ever on Wednesday, while the blue-chip index on Friday scored a third record close in a row.

“People were really shocked by Powell’s comments,” said Robert Tipp, chief investment strategist, at PGIM Fixed Income. Rather than dampen rate-cut exuberance building in markets, Powell instead opened the door to rate cuts by midyear, he said.

New York Fed President John Williams on Friday tried to temper speculation about rate cuts, but as Tipp argued, Williams also affirmed the central bank’s new “dot plot” reflecting a path to lower rates.

“Eventually, you end up with a lower fed-funds rate,” Tipp said in an interview. The risk is that cuts come suddenly, and can erase 5% yields on T-bills, money-market funds and other “cash-like” investments in the blink of an eye.

Swift pace of Fed cuts

When the Fed cut rates in the past 30 years it has been swift about it, often bringing them down quickly.

Fed rate-cutting cycles since the ’90s trace the sharp pullback also seen in 3-month T-bill rates, as shown below. They fell to about 1% from 6.5% after the early 2000 dot-com stock bust. They also dropped to almost zero from 5% in the teeth of the global financial crisis in 2008, and raced back down to a bottom during the COVID crisis in 2020.

Rates on 3-month Treasury bills dropped suddenly in past Fed rate-cutting cycles

FRED data

“I don’t think we are moving, in any way, back to a zero interest-rate world,” said Tim Horan, chief investment officer fixed income at Chilton Trust. “We are going to still be in a world where real interest rates matter.”

Burt Horan also said the market has reacted to Powell’s pivot signal by “partying on,” pointing to stocks that were back to record territory and benchmark 10-year Treasury yield’s
BX:TMUBMUSD10Y
that has dropped from a 5% peak in October to 3.927% Friday, the lowest yield in about five months.

“The question now, in my mind,” Horan said, is how does the Fed orchestrate a pivot to rate cuts if financial conditions continue to loosen meanwhile.

“When they begin, the are going to continue with rate cuts,” said Horan, a former Fed staffer. With that, he expects the Fed to remain very cautious before pulling the trigger on the first cut of the cycle.

“What we are witnessing,” he said, “is a repositioning for that.”

Pivoting on the pivot

The most recent data for money-market funds shows a shift, even if temporary, out of “cash-like” assets.

The rush into money-market funds, which continued to attract record levels of assets this year after the failure of Silicon Valley Bank, fell in the past week by about $11.6 billion to roughly $5.9 trillion through Dec. 13, according to the Investment Company Institute.

Investors also pulled about $2.6 billion out of short and intermediate government and Treasury fixed income exchange-traded funds in the past week, according to the latest LSEG Lipper data.

Tipp at PGIM Fixed Income said he expects to see another “ping pong” year in long-term yields, akin to the volatility of 2023, with the 10-year yield likely to hinge on economic data, and what it means for the Fed as it works on the last leg of getting inflation down to its 2% annual target.

“The big driver in bonds is going to be the yield,” Tipp said. “If you are extending duration in bonds, you have a lot more assurance of earning an income stream over people who stay in cash.”

Molly McGown, U.S. rates strategist at TD Securities, said that economic data will continue to be a driving force in signaling if the Fed’s first rate cut of this cycle happens sooner or later.

With that backdrop, she expects next Friday’s reading of the personal-consumption expenditures price index, or PCE, for November to be a focus for markets, especially with Wall Street likely to be more sparsely staffed in the final week before the Christmas holiday.

The PCE is the Fed’s preferred inflation gauge, and it eased to a 3% annual rate in October from 3.4% a month before, but still sits above the Fed’s 2% annual target.

“Our view is that the Fed will hold rates at these levels in first half of 2024, before starting cutting rates in second half and 2025,” said Sid Vaidya, U.S. Wealth Chief Investment Strategist at TD Wealth.

U.S. housing data due on Monday, Tuesday and Wednesday of next week also will be a focus for investors, particularly with 30-year fixed mortgage rate falling below 7% for the first time since August.

The major U.S. stock indexes logged a seventh straight week of gains. The Dow advanced 2.9% for the week, while the S&P 500
SPX
gained 2.5%, ending 1.6% away from its Jan. 3, 2022 record close, according to Dow Jones Market Data.

The Nasdaq Composite Index
COMP
advanced 2.9% for the week and the small-cap Russell 2000 index
RUT
outperformed, gaining 5.6% for the week.

Read: Russell 2000 on pace for best month versus S&P 500 in nearly 3 years

Year Ahead: The VIX says stocks are ‘reliably in a bull market’ heading into 2024. Here’s how to read it.

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December 17, 2023
CNBC Daily Open: The Fed tries to cool the heat

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Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on December 14, 2023, in New York City.

Angela Weiss | Afp | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Triple witching
U.S. markets mostly rose Friday amid a tumultuous day of trading, which could have been triggered by an event known as “triple witching” — the simultaneous expiration of stock options, and stock index futures and options. Europe’s Stoxx 600 index ended the day flat, giving away earlier gains of around 0.5%. But it rose 0.91% last week, its fifth week of wins.

Cooling the heat
Following the euphoria markets experienced after the U.S. Federal Reserve’s last meeting, during which it indicated three rate cuts for 2024, Fed officials seem to be dampening the enthusiasm. “We aren’t really talking about rate cuts right now,” New York Federal Reserve President John Williams told CNBC. “We need to be ready to move to tighten the policy further, if the progress of inflation were to stall.”

Citi works remotely
Citigroup employees were told they can work remotely in the final two weeks of December, CNBC has learned, making last week the final in-person experience of this year for many staffers. But this perk comes at a tense moment. Some employees expressed concern over whether their job will still exist next year as CEO Jane Fraser finalizes her sweeping corporate reorganization — one that’s already resulted in layoffs.

AI job losses
There are signs humans are losing jobs to artificial intelligence. According to a recent report from ResumeBuilder, 37% of respondents say AI has replaced workers this year, while 44% report AI will result in layoffs in 2024. But experts say this trend isn’t a wholesale replacement of humans — but a redefinition of the sort of jobs we can do.

[PRO] Focus on PCE
In comparison to last week, this week’s relatively light on economic data and market-moving events. But investors should keep an eye on the personal consumption expenditure index, out Friday. Economists expect the PCE to show inflation’s receding. But if it surprises to the upside, it’ll throw a wrench into the Fed’s plan to pivot — and possibly halt the ferocious market rally.

The bottom line

The “everything rally” spurred by Wednesday’s Federal Reserve meeting appears to have lost its legs — not least because the Fed itself seemed slightly spooked by how aggressively markets are pricing in rate cuts for next year.

According to the dot plot, which is a projection of where Fed officials expect interest rates to be in the future, there could be three 25-basis-point cuts next year. But markets think there’s a 34.7% chance rates will plummet to a range of 3.75% to 4% — that’s six 25-basis-point cuts — by December next year, according to the CME FedWatch Tool.

On Friday, New York Federal Reserve President John Williams tried to rein in some of that exuberance.

“I just think it’s just premature to be even thinking about that,” Williams said, when asked about futures pricing for a rate cut in March.

Williams even warned rates might go up.

“One thing we’ve learned even over the past year is that the data can move and in surprising ways, we need to be ready to move to tighten the policy further, if the progress of inflation were to stall or reverse.”

That could be one reason why markets were shaky Friday. The S&P 500 was essentially unchanged, the Dow Jones Industrial Average climbed 0.2% and the Nasdaq Composite added 0.4%.

That said, Friday also saw a quarterly event known as “triple witching,” the confluence of expiring stock index futures and options, as well as individual stock options. Furthermore, the S&P and Nasdaq-100 rebalanced their indexes, meaning the weight of some stocks on the index was changed. That could have exaggerated price moves and increased volatility as investors, accordingly, rebalanced their portfolios.

Finally, perhaps investors shouldn’t be surprised or disappointed the rally’s subsiding. “The market doesn’t go up every day, no matter how strong a trend is,” Chris Larkin, managing director of trading and investing at E-Trade points out. “Pullbacks and pauses are inevitable, regardless of how big they are or how long they last.”

The corollary to that is even a decline won’t last. Barring any shocks, signs are pointing to Santa spreading cheer in markets as the year wraps up.

— CNBC’s Yun Li contributed to this report.

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December 17, 2023
S&P 500's year-end rally lifts 51 stocks to a record close

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It has been a record day for 10% of the S&P 500.

A group of 51 stocks in the benchmark equity index swept to record finishes on Tuesday, the most since April 20, 2022, according to a tally from Dow Jones Market Data.

It was a record day for 51 stocks in the S&P 500.

Dow Jones Market Data

Stocks that logged a record close on Tuesday included Allstate Corp
ALL,
+0.90%,
Costco Wholesale
COST,
+0.90%,
D.R. Horton, Inc.
DHI,
+0.65%,
Mastercard
MA,
+1.21%,
T-Mobile US Inc.,
TMUS,
+1.00%
Visa Inc.
V,
+1.19%
and Waste Management Inc.,
WM,
+1.85%
among others.

Equities have been in a year-end rally mode, driven higher by tumbling benchmark yields that finance much of the U.S. economy and expectations of coming interest-rate cuts.

The 10-year Treasury rate
BX:TMUBMUSD10Y
fell to 4.2% on Tuesday from a high of about 5% in October.

The Dow Jones Industrial Average
DJIA
on Tuesday ended at its third-highest level on record, while the S&P 500 index
SPX
and Nasdaq Composite Index
COMP
added to a string of new closing highs for 2023. The Dow finished 0.6% away from its record close logged almost two years ago, while the S&P 500 was only 3.2% below its close from the same period, according to Dow Jones Market Data.

The push higher for stocks followed inflation data for November that showed price pressures continued to ease from peak levels, but still were above the Fed’s 2% annual target.

The consumer-price index pegged the annual rate of inflation at 3.1%, down from 3.2% in October, with the “last mile” of inflation expected to be the hardest part to tame.

Investors now will be focused on Wednesday’s Federal Reserve decision. Short-term interest rates are expected to remain unchanged at a 22-year high, but the central bank is expected to update its “dot plot” forecast of rates over a longer time horizon.

“Although the market will focus on the timing of rate cuts, we suspect Chair Powell will be keen to strike notes of caution to avoid financial conditions easing too much further to ensure the Fed continues to see encouraging progress on inflation,” said Emin Hajiyev, senior economist at Insight Investment, in emailed comments.

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December 12, 2023
U.S. stocks open mixed as investors weigh fresh data on inflation

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U.S. stocks opened mixed on Tuesday as investors weighed a reading on inflation that was largely in line with economists’ forecasts. The Dow Jones Industrial Average
DJIA,
+0.35%
was up less than 0.1% soon after the opening bell, while the S&P 500
SPX,
+0.07%
slipped 0.2% and the Nasdaq Composite
COMP,
+0.07%
fell 0.1%, according to FactSet data, at last check. The Bureau of Labor Statistics said Tuesday that inflation, as measured by the consumer-price index, rose 0.1% in November for a year-over-year rate of 3.1%. Economists polled by the Wall Street Journal had forecast that inflation would be unchanged in November while rising at an annual pace of 3.1%. So-called core inflation, which excludes energy and food prices, climbed 0.3% last month to increase 4% in the 12 months through November. That was in line with economists’ expectations. In the bond market, the yield on the 10-year Treasury note
TMUBMUSD10Y,
4.234%
was up one basis point at around 4.24%, according to FactSet data, at last check.

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December 12, 2023
U.S. stocks open mostly lower as investors look ahead to inflation data, Fed policy meeting

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U.S. stocks opened mostly lower on Monday, after six straight weeks of gains, as investors look ahead to inflation data and the Federal Reserve’s policy meeting this week. The Dow Jones Industrial Average
DJIA,
+0.17%
was up 0.2% soon after the opening bell, while the S&P 500
SPX,
+0.03%
shed 0.1% and the Nasdaq Composite
COMP,
-0.27%
fell 0.4%, according to FactSet data, at last check. A reading on November inflation, as measured by the consumer-price index, will be released on Tuesday. The following day, the Fed will release a statement on its monetary policy, after concluding its two-day meeting. Last week, all three major U.S. stock benchmarks closed at their highest levels of the year, with the S&P 500 finishing Friday at its highest value since March 29, 2022.

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December 11, 2023
This week's Fed meeting could slam brakes on year-end stock rally

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The rally lifting U.S. stocks to fresh 2023 highs in the year’s home stretch could be at risk if the Federal Reserve on Wednesday crushes expectations for interest-rate cuts in 2024.

U.S. central bankers and investors haven’t exactly been seeing eye-to-eye about when the Fed will start easing its monetary policy, according to Melissa Brown, senior principal of applied research at Axioma.

Traders also have been flip-flopping on their forecasts for rate cuts over the past few months, based on fed-funds futures data.

Oxford Economics/Bloomberg

Given the whipsaw of recent volatility, it isn’t hard to imagine a jittery market backdrop as investors wait to hear from Fed Chairman Jerome Powell on Wednesday, even though the central bank isn’t expected to change its range for short-term interest rates. Since July, the Fed funds rate rate has been at a 22-year high in a 5.25% to 5.5% range.

U.S. stocks advanced this year after a bruising 2022, adding big gains in November, as benchmark 10-year Treasury yields
BX:TMUBMUSD10Y
tumbled from a 16-year high of 5%. The Dow Jones Industrial Average
DJIA
closed on Friday only 1.5% away from its record close nearly two years ago. The S&P 500 index
SPX
booked its highest finish since March 2022, according to Dow Jones Market Data.

Year Ahead: The VIX says stocks are ‘reliably in a bull market’ heading into 2024. Here’s how to read it.

“I don’t see any report on the horizon that would really make them [the Fed] change their stance on where we are on monetary policy,” said Alex McGrath, chief investment officer at NorthEnd Private Wealth. It is mostly the expectation of Fed rate cuts next year that have supported stock and bond markets rallies recently, he said.

The Dow Jones closed 9.4% higher on the year through Friday, the S&P 500 was up 19.9% and the Nasdaq Composite advanced 37.6% for the same period, according to FactSet data.

“We have been a little skeptical of the market’s excitement over rate cuts early next year,” said Ed Clissold, chief U.S. strategist at Ned Davis Research.

It takes a gradual process for the Fed to move away from its monetary policy tightening, Clissold told MarketWatch. The Fed is likely to pivot its tone from being very hawkish to neutral, remove the tightening bias, and then talk about rate cuts, noted Clissold.

The bond market on Friday already was again flashing signs of a potential rethink by investors about the path of interest rates in 2024.

Junk bonds
JNK

HYG,
often a canary in the coal mine for markets, hit pause on a rally that started in late October as benchmark borrowing costs fell, even though the sector has benefited from big inflows of funds in recent weeks.

Treasury yields for 10-year and 30-year
BX:TMUBMUSD30Y
bonds also shot higher Friday, echoing volatility that took hold in mid-October.

Read: Investors have fought a 2-year battle with the bond market. Here’s what’s next.

Mike Sanders, head of fixed income at Madison Investments, has been similarly cautious. “I think the market is a little too aggressive in terms of thinking that cuts are going to occur in March,” Sanders said. It is more likely that the Fed will start cutting rates in the second half of next year, he said.

“I think the biggest thing is that the continued strength in the labor market continues to make the services inflation stickier,” Sanders said. “Right now we just don’t see the weakness that we need to get that down.”

Friday’s U.S. employment report adds to his concerns. About 199,000 new jobs were created in November, the government said Friday. Economists polled by the Wall Street Journal had forecast 190,000 jobs. The report also showed rising wages and a retreating unemployment rate to a four-month low of 3.7% from 3.9%.

The U.S. central bank will likely “try their best to push back on the narrative of cuts coming very soon,” Sanders said. That could be accomplished in its updated “dot plot” interest rate forecast, also due Wednesday, which will provide the Fed’s latest thinking on the likely path of monetary policy. The Fed’s update in September surprised some in the market as it bolstered the central bank’s stance of higher rates for longer.

There’s still a chance that inflation will reaccelerate, Sanders said. “The Fed is worried about the inflation side more than anything else. For them to take the foot off the brake sooner, it just doesn’t do them any good.”

Ahead of the Fed decision, an inflation update is due Tuesday in the November consumer-price index, while the producer-price index is due Wednesday.

Still, seasonality factors could aid the stock market in December. The Dow Jones Industrial Average in December rises about 70% of the time, regardless of whether it is in a bull or bear market, according to historical data.

See: Stock market barrels into year-end with momentum. What that means for December and beyond.

“The overall market outlook remains constructive,” said Ned Davis’s Clissold. “A soft landing scenario could support the bull market continuing.”

Last week the Dow eked out a gain of less than 0.1%, the S&P 500 edged up 0.2% and the Nasdaq rose 0.7%. All three major indexes went up for a sixth straight week, with the Dow logging its longest weekly winning streak since February 2019, according to Dow Jones Market Data.

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December 10, 2023
S&P 500 ends at 2023 high, books longest weekly win streak in 4 years

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U.S. stocks closed higher on Friday, shaking off earlier weakness after a strong monthly jobs report, to clinch a sixth straight week in a row of gains. The Dow Jones Industrial Average
DJIA,
+0.36%
advanced about 130 points, or 0.4%, to end near 36,247, according to preliminary FactSet data. The S&P 500 index gained 0.4% Friday and the Nasdaq Composite finished 0.5% higher. A string of weekly gains propelled the S&P 500 index
SPX,
+0.41%
to a fresh 2023 closing high and left the Dow about 1.4% away from its record close set nearly two years ago, according to Dow Jones Market Data. Equities have benefitted from a risk-on tone going into year end, which has been driven by falling 10-year Treasury yields
TMUBMUSD10Y,
4.230%
and optimism around the Federal Reserve potentially cutting interest rates in the year ahead. That hinges on if inflation continues to ease. November’s robust jobs report served as a reminder Friday of the tough path of the “last mile” in getting inflation down to the Fed’s 2% annual target. As part of this, the 10-year Treasury yield jumped about 11.5 basis points Friday to 4.244%, but still was about 74 basis points lower than its October high. For the week, the Dow was only fractionally higher, the S&P 500 gained 0.2% and the Nasdaq climbed 0.7%.

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December 8, 2023
Mortgage rates' dip to 7% could be brief if jobs market stays strong, Fannie Mae economist says

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November’s sharp pullback in 30-year fixed mortgage rates may not last if the labor market remains strong, said Mark Palim, deputy chief economist at Fannie Mae.

Palim was speaking to the robust jobs report released on Friday, showing the U.S. added 199,000 jobs in November and that wages rose, albeit with the figures somewhat inflated by the return of striking workers from the auto industry and from Hollywood.

Homebuyers can benefit from a robust labor market and the near 80 basis point decline in mortgage rates since the end of October, Palim said. But if the “labor markets remain this strong, we believe the pace of mortgage rate declines will likely not continue in the near term or may partially reverse,” he said in a statement.

The benchmark 30-year fixed mortgage rate was edging down to 7.05% on Friday, after surging to nearly 8% in October, according to Mortgage Daily News.

Optimism around the potential for falling mortgage costs to thaw home sales helped lift shares of Toll Brothers Inc.,
TOL,
+1.86%
and a slew of other homebuilders tracked by the SPDR S&P Homebuilders ETF,
XH,
to record highs earlier this week, even while investors in some homebuilder bonds have been sellers in recent weeks.

Yields on 10-year
BX:TMUBMUSD10Y
and 30-year Treasury notes
BX:TMUBMUSD30Y
were up sharply Friday, to about 4.23% and 4.32%, respectively, but still below the highs of about 5% in October. The surge in long-term borrowing costs was stoked by tough talk by Federal Reserve officials about the need to keep rates higher for longer to bring inflation down to a 2% annual target.

Read: Solid job growth, sharp wage gains sends Treasury yields up by the most in months

U.S. stocks were up Friday afternoon, shaking off earlier weakness following the jobs report. The Dow Jones Industrial Average
DJIA
was 0.2% higher, further narrowing the gap between its last record close set two years ago, the S&P 500 index
SPX
and the Nasdaq Composite Index
COMP
also were up 0.2%, according to FactSet data.

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December 8, 2023
U.S. stocks end higher after job report, and Dow scores longest weekly winning streak since February 2019
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U.S. stocks closed higher Friday, with the Dow Jones Industrial Average scoring its longest weekly winning streak since February 2019, as investors digested the latest job report.

How stock indexes traded
- The Dow Jones Industrial Average
  DJIA
  rose 130.49 points, or 0.4%, to close at 36,247.87, its highest closing value since Jan. 12, 2022.
- The S&P 500
  SPX
  gained 18.78 points, or 0.4%, to finish at 4,604.37, marking its highest close since March 29, 2022.
- The Nasdaq Composite
  COMP
  climbed 63.98 points, or 0.4%, to end at 14,403. 97, scoring its highest closing value since April 4, 2022.
For the week, the Dow eked out a gain of less than 0.1%, the S&P 500 edged up 0.2% and the Nasdaq advanced 0.7%. All three major indexes rose for a sixth straight week, according to Dow Jones Market Data.
What drove markets

U.S. stocks ended higher Friday as investors parsed a stronger-than-expected job report.

The U.S. Bureau of Labor Statistics said Friday that the economy added 199,000 jobs in November, while the unemployment rate fell to 3.7% from 3.9%. Economists polled by the Wall Street Journal had forecast that 190,000 jobs would be added in the month.

“It’s nice to see that a soft landing still can take place,” Yung-Yu Ma, chief investment officer at BMO Wealth Management, said by phone Friday. But the market had been getting “too optimistic” about potential interest-rate cuts by the Federal Reserve in the early part of next year, he added.

The job report is “perhaps a wash” for markets as “average hourly earnings growth came in a little on the high side,” Ma said. That could contribute to inflationary pressures and push a Fed pivot on rate cuts further out in 2024 than markets were expecting.

“The Fed can probably be patient for a while,” he said. Fed Chair Jerome Powell may “strike a bit more of a hawkish tone” after the central bank’s monetary-policy meeting next week, potentially pushing back against some of the enthusiasm for earlier rate cuts, Ma said.

Average hourly earnings rose 0.4% in November, up 4% year over year, the job report shows.

“Even though the headline 199,000 new jobs created is just slightly above consensus estimates for 190,000 new positions, the lower unemployment rate of 3.7%, coupled with higher-than-expected average hourly earnings, caused a jump higher in Treasury yields,” Quincy Krosby, chief global strategist at LPL Financial, said in emailed comments.

The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
climbed 11.5 basis points Friday to 4.244%, according to Dow Jones Market Data. That’s below its high this year of about 5% in October.

Meanwhile, the stock market’s so-called fear gauge remained low, with the CBOE Volatility Index
VIX
declining to 12.35 on Friday, FactSet data show.

See: The VIX says stocks are ‘reliably in a bull market’ heading into 2024. Here’s how to read it.

In other economic data released Friday, the University of Michigan’s gauge of consumer sentiment rose to a preliminary reading of 69.4 in December, its first increase in five months. Inflation expectations also moderated, the university’s survey of consumer sentiment showed.

Such a big swing for a single reading of the survey is unusual, said Claudia Sahm, a former Federal Reserve economist who now runs a consulting business. “These data usually don’t move like that,” she said during a phone interview with MarketWatch.

Next week’s economic calendar will include a reading on U. S. inflation from the consumer-price index as well as the outcome of the Fed’s two-day policy meeting, scheduled to conclude Dec. 13.

Meanwhile, the S&P 500 notched a sixth straight week of gains, its longest such winning streak since the stretch ending Nov. 15, 2019, according to Dow Jones Market Data. The Dow Jones Industrial Average logged its longest stretch of weekly gains since February 2019.

Companies in focus

Lululemon Athletica Inc. shares
LULU,
+5.37%
jumped 5.4% after the company late Thursday called for lower-than-expected holiday-quarter figures, saying that is navigating an “uncertain” economy.

Carrier Global Corp.’s stock
CARR,
+4.50%
rose 4.5% after the company announced the sale of its Global Access Solutions business to Honeywell International for $4.95 billion.

Mullen Automotive Inc. shares
MULN,
-5.13%
dropped 5.1% after the electric-vehicle maker filed a lawsuit against a group of investors for allegedly using “spoofing” to manipulate its share price.

Steve Goldstein contributed.
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December 8, 2023
CNBC Daily Open: AI to the rescue

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A photo taken on November 23, 2023 shows the logo of the ChatGPT application developed by US artificial intelligence research organization OpenAI on a smartphone screen (left) and the letters AI on a laptop screen in Frankfurt am Main, western Germany.

Kirill Kudryavtsev | Afp | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Google’s answer to ChatGPT
Google owner Alphabet’s shares jumped 5% Thursday, a day after the company announced its latest artificial intelligence model, Gemini, that will compete with OpenAI, Microsoft and Meta offerings. The company will start licensing Gemini to customers through Google Cloud later this month — it remained unclear whether Google plans to monetize Gemini through all of its products in the long term.

Bye, losing streak
Wall Street’s main indexes rose Thursday, with the Dow Jones Industrial Average and the S&P 500 snapping three-day losing streaks. The Nasdaq Composite closed 1.37% higher, leading gains on a tech-driven rally. The 30-stock Dow added 0.17%, while the S&P 500 climbed 0.8% ahead of Friday’s all-important jobs report. Asia-Pacific markets were mixed, with Japan’s Nikkei 225 down 1.91% and Korea’s Kospi up 1.02%.

AMD ups the ante
AMD launched new artificial intelligence chips on Wednesday that will compete against Nvidia to power AI applications. Shares of the chipmaker surged 9.9% Thursday to close at $128.37, marking its best day since May and the highest close since June. Nvidia has dominated the AI chip market for the past year, but cloud providers and technology companies have been searching for a flexible alternative to save costs.

No yoga pants this Christmas
Lululemon, known for its yoga pants and belt bags, issued a tepid fourth-quarter outlook. The retailer said it was expecting sales between $3.14 billion and $3.17 billion during the quarter, just shy of analysts’ estimate of $3.18 billion, according to LSEG. This despite the company seeing strong third-quarter demand and a positive start to the holiday shopping season.

[PRO] These global stocks may be overbought
U.S. stocks aren’t they only ones doing well — global markets have also rallied in the past month. These are a few global stocks that may have been overbought but analysts still like them — giving one nearly 40% upside.

The bottom line

Oxford's word of the year is "rizz", which it defines as pertaining to someone's ability to attract another person through style, charm, or attractiveness and is derived from the middle part of the word 'charisma'. On Wall Street, it might as well be "AI".

Wall Street resumed its rally after a three-day break as technology giants intensified their AI arms race, lifting tech stocks.

When you have Google launching a new AI model and AMD eying a slice of the scorching AI chip pie, there are few surer ways to turn investors frowns upside down. Artificial intelligence, which perhaps wasn't even part of our daily vocabulary five years ago, is now becoming more and more integrated with our day-to-day functioning.

But it is left to be seen if these gains could shine through Friday's session that will be guided by fresh evidence on the strength of the U.S. labor market, which has been a key focus this week amid a series of mixed data releases that have left traders scratching their heads.

Weekly jobless claims released Thursday missed economists' expectations, signaling the pace of layoffs hasn't increased, while private payrolls data on Wednesday showed that employers added fewer-than-expected positions.

Meanwhile, the volume of job openings in October fell to its lowest level since March 2021, according to the Labor Department.

Friday's official jobs report is expected to show 190,000 jobs were added in November, according to economists polled by Dow Jones. Higher than the prior month.

Investors would be watching for analysts' commentary on whether the latest data releases will allow the Federal Reserve to keep interest rates on pause at its meeting next week.

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December 7, 2023
November's rally just erased two months of Fed tightening, economist says

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Financial conditions are now looser than in September, says economist

Financial conditions in the U.S. are looser than in September, says economist.

Getty Images

The feel-good tone gripping markets in the home stretch of 2023 may not be what the Federal Reserve had penciled in for the holidays.

The stock market in December, once again, has been knocking on the door of record levels, driven by optimism about easing inflation and potential Fed rate cuts next year.

But while the prospect of double-digit equity gains this year would be a reprieve for investors after a brutal 2022, the latest rally also points to looser financial conditions.

Ultimately, the risk of looser financial conditions is that they could backfire, particularly if they rub against the Fed’s own goal of keeping credit restrictive until inflation has been decisively tamed.

Read: Inflation is falling but interest rates will be higher for longer. Way longer.

Specifically, the November rally for the S&P 500 index
SPX
can be traced to the 10-year Treasury yield
BX:TMUBMUSD10Y
dropping to 4.1% on Thursday from a 16-year peak of 5% in October.

Falling 10-year Treasury yields from a 5% peak in October coincides with a sharp rally in the S&P 500 at the tail end of 2023.

Oxford Economics

The Fed only exerts direct control over short-term rates, but 10-year and 30-year Treasury yields
BX:TMUBMUSD30Y
are important because they are a peg for pricing auto loans, corporate debt and mortgages.

That makes long-term rates matter a lot to investors in stocks, bonds and other assets, since higher rates can lead to rising defaults, but also can crimp corporate earnings, growth and the U.S. economy.

Michael Pearce, lead U.S. economist at Oxford Economics, thinks the November rally may put Fed officials in a difficult spot ahead of next week’s Dec. 12 to 13 Federal Open Market Committee meeting — the eighth and final policy gathering of 2023.

“The decline in yields and surge in equity prices more than fully unwinds the tightening in conditions seen since the September FOMC meeting,” Pearce said in a Thursday client note.

The Fed next week isn’t expected to raise rates, but instead opt to keep its benchmark rate steady at a 22-year high in a 5.25% to 5.5% range, which was set in July. The hope is that higher rates will keep bringing inflation down to the central bank’s 2% annual target.

Ahead of the Fed’s July meeting, stocks were extending a spring rally into summer, largely driven by shares of six meg-cap technology companies and AI optimism.

From June: Nvidia officially closes in $1 trillion territory, becoming seventh U.S. company to hit market-cap milestone

Rates in September were kept unchanged, but central bankers also drove home a “higher for longer” message at that meeting, by penciling in only two rate cuts in 2024, instead of four earlier. That spooked markets and triggered a string of monthly losses in stocks.

Pearce said he expects the Fed next week to “push back against the idea that rate cuts could come onto the agenda anytime soon,” but also to “err on the side of leaving rates high for too long.”

That might mean the first rate cut comes in September, he said, later than market odds of a 52.8% chance of the first cut in March, as reflected by Thursday by the CME FedWatch Tool.

Stocks were higher Thursday, poised to snap a three-session drop. A day earlier, the S&P 500 closed 5.2% off its record high set nearly two years ago, the Dow Jones Industrial Average
DJIA
was 2% away from its record close and the Nasdaq Composite Index
COMP
was almost 12% below its November 2021 record, according to Dow Jones Market Data.

Related: What investors can expect in 2024 after a 2-year battle with the bond market

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December 7, 2023
CNBC Daily Open: Caution in the air as stock rally stalls

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The Wall Street and Broad Street signs outside the New York Stock Exchange (NYSE) in New York, US, on Monday, Dec. 4, 2023.

Bloomberg | Bloomberg | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Rally falters
The Dow Jones Industrial Average and the S&P 500 closed lower for a third straight day Wednesday — a first for both indexes since October. The Dow fell 0.19%, while the S&P 500 shed 0.39%. The Nasdaq Composite dropped 0.58%. Investors assessed data indicating falling inflation and awaited the monthly jobs report. Asia markets also fell, with Japan’s Nikkei 225 leading losses, down 1.72%.

Jobs slowdown
Payrolls processing firm ADP said Wednesday that private sector job creation slowed further in November and wages showed their smallest growth in more than two years. Companies added 103,000 workers for the month, slightly below the downwardly revised 106,000 in October and missing the 128,000 Dow Jones estimate.

Crypto demons
Jamie Dimon, CEO of JPMorgan Chase, lashed out at bitcoin and its peers, suggesting cryptocurrencies should be banned in remarks on Wednesday on Capitol Hill. “I’ve always been deeply opposed to crypto, bitcoin, etc.,” he said. “The only true use case for it is criminals, drug traffickers … money laundering, tax avoidance.” “If I was the government, I’d close it down,” he added. The price of bitcoin recently topped $44,000.

Oil slips
The West Texas Intermediate contract for January fell $2.94, or 4.07%, to settle at $69.38 a barrel Wednesday, closing at the lowest level since late June. Retail gasoline prices hit their lowest since January ahead of the holiday shopping and travel season. The Brent contract for February declined $2.90, or 3.76%, to settle at $74.30 a barrel.

[PRO] Forget the ‘obvious’ AI stocks
Artificial intelligence has been a huge theme this year, with investors rushing into many AI-related stocks. Nvidia soared over 200% year to date, and Microsoft around 56%. But not all AI-related stocks are necessarily too expensive to buy right now.

The bottom line

Wall Street's main indexes are starting to show signs of not being able to sustain a fiery rally that led to a five-week winning streak.

The blue-chip Dow and the benchmark S&P 500 have now fallen for three straight days. Caution is in the air.

A string of labor data through the week has set the tone for markets ahead of the Federal Reserve's last policy meeting of the year next week.

The numbers so far have shown that the U.S. central bank's aggressive policy stance has taken hold.

November private payroll data from ADP offered the latest indication that the job market, long considered a pain point for the Fed, was easing.

"ADP's payroll data shows the Fed's anti-inflation treatment is now really taking effect," said David Russell, global head of market strategy at online investing platform TradeStation.

"The numbers point toward a soft landing, but investors may start to worry about a recession if policy remains too hawkish. It's the Fed's battle to lose at this point."

Data on Tuesday which showed job openings in October fell to the lowest level since March 2021.

But as the week edges closer to an end, the focus will mainly shift to the Labor Department's keenly watched November employment report on Friday.

— Jeff Cox contributed to this story.

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December 6, 2023
CNBC Daily Open: Three days is a streak

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People walk by the New York Stock Exchange (NYSE) on November 02, 2023 in New York City.

Spencer Platt | Getty Images News | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Rally falters
The Dow Jones Industrial Average and the S&P 500 closed lower for a third straight day Wednesday — a first for both indexes since October. The Dow fell 0.19%, while the S&P 500 shed 0.39%. The Nasdaq Composite dropped 0.58%. Investors assessed data indicating falling inflation and the monthly jobs report loomed. European markets on the other hand, closed higher, with the Stoxx 600 index up 0.6%.

Jobs slowdown
Payrolls processing firm ADP said Wednesday that private sector job creation slowed further in November and wages showed their smallest growth in more than two years. Companies added 103,000 workers for the month, slightly below the downwardly revised 106,000 in October and missing the 128,000 Dow Jones estimate.

Crypto Demons
Jamie Dimon, CEO of JPMorgan Chase, lashed out at bitcoin and its peers, suggesting cryptocurrencies should be banned in remarks on Wednesday on Capitol Hill. “I’ve always been deeply opposed to crypto, bitcoin, etc.,” he said. “The only true use case for it is criminals, drug traffickers … money laundering, tax avoidance.” “If I was the government, I’d close it down,” he added. The price of bitcoin recently topped $44,000.

Oil slips
The West Texas Intermediate contract for January fell $2.94, or 4.07%, to settle at $69.38 a barrel Wednesday, closing at the lowest level since late June. Retail gasoline prices hit their lowest since January ahead of the holiday shopping and travel season. The Brent contract for February declined $2.90, or 3.76%, to settle at $74.30 a barrel.

[PRO] Bitcoin’s path to $50,000
After spending much of 2023 stuck near $30,000, bitcoin broke above $40,000 last weekend and has remained above that level for much of this week. Now the next stop could be close to $50,000.

The bottom line

Wall Street's main indexes are starting to show signs of not being able to sustain a fiery rally that led to five straight weeks of gains.

The blue-chip Dow and the benchmark S&P 500 have now clocked a three-day losing streak. Caution is in the air.

A string of labor data through the week has set the tone for markets ahead of the Federal Reserve's last policy meeting of the year next week.

The numbers so far have shown that the U.S. central bank's aggressive policy stance has taken hold.

November private payroll data from ADP offered the latest indication that the job market, long considered a pain point for the Fed, was easing.

"ADP's payroll data shows the Fed's anti-inflation treatment is now really taking effect," said David Russell, global head of market strategy at online investing platform TradeStation.

"The numbers point toward a soft landing, but investors may start to worry about a recession if policy remains too hawkish. It's the Fed's battle to lose at this point."

Data on Tuesday which showed job openings in October fell to the lowest level since March 2021.

But as the week edges closer to an end, the focus will mainly shift to the Labor Department's keenly watched November employment report on Friday.

— Jeff Cox contributed to this story.

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December 6, 2023
U.S. stocks finish lower as S&P 500, Dow industrials suffer three straight sessions of declines

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U.S. stock indexes ended lower on Wednesday, with the S&P 500
SPX,
-0.39%
and the Dow Jones Industrial Average
DJIA,
-0.19%
booking a third straight session of losses as investors awaited more labor-market data for clarity about the state of the economy. The Dow industrials fell 70 points, or 0.2%, to end at 36,054, while the S&P 500 finished 0.4% lower and the Nasdaq Composite
COMP,
-0.58%
retreated 0.6%. U.S. businesses added 103,000 new jobs in November, paycheck company ADP said on Wednesday, in another sign of slower hiring and a softer labor market. Investors will monitor jobless claims numbers on Thursday morning before contemplating the widely followed official data on nonfarm payrolls, wages and the unemployment rate, due out Friday 8:30 a.m. Eastern time.

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December 6, 2023
CNBC Daily Open: Of billions and trillions

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The new Apple iPhone 15 on display inside the tech giant’s flagship store in Regent Street, central London. Picture date: Friday September 22, 2023. (Photo by Jonathan Brady/PA Images via Getty Images)

Jonathan Brady | Pa Images | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Losing steam
Wall Street showed signs of losing steam Tuesday after a blistering rally last month, as two of its three main indexes ended lower for the second day. The Dow Jones Industrial Average closed 0.22% lower, while the S&P 500 inched down 0.06% by the closing bell. The Nasdaq Composite added 0.31% as technology shares led gains. Europe’s Stoxx 600 index closed 0.4% higher.

The most valuable Apple
Apple’s market capitalization climbed back above $3 trillion for the first time since August. The iPhone maker climbed 2% to $193.42 per share on Tuesday and remains the most valuable publicly traded U.S. company. It officially surpassed the $3 trillion mark for the first time in June, and briefly touched the level on an intraday basis in December 2022. The company’s stock price has risen over 48% so far this year.

X.AI
Elon Musk’s artificial intelligence startup X.AI has filed with the SEC to raise up to $1 billion in an equity offering. It has so far raised nearly $135 million from four investors, with the first sale occurring on Nov. 29.

Goldilocks’ porridge
Job openings, a barometer of employer demand for workers, fell by 617,000 to 8.7 million in October, the lowest since March 2021, the U.S. Department of Labor reported Tuesday in a survey. Economists said the U.S. economy is now inching closer to a so-called “soft landing” after recent batches of better-than-expected data.

Bitcoin
Bitcoin topped $44,000 for the first time since April 2022 on Tuesday. The price of the world’s biggest cryptocurrency was last higher by more than 4% to $43,794.99, according to Coin Metrics, extending gains from the previous day. The digital coin is now up more than 160% for the year.

[PRO] Five stocks to buy before the year end
Many stocks have seen massive rallies this year as investors turned bullish on sectors like Big Tech, biotech, electric vehicles and weight loss drugs. As the year-end nears, CNBC Pro asked three fund managers for sectors — and stocks — they are bullish on in the lead-up to 2024. Here are five of their top picks.

The bottom line

So far December is not shaping up to be as slow as usual. Apple remains right on top of the food chain and Elon Musk is now raising fresh capital for his artificial intelligence startup.

As we approach the end of the year, it is yet another reminder that you can count on Big Tech to pull its weight in times when there really isn't much else to pave the way.

Wall Street's raging rally last month may start to show signs of cooling, but investors have no real reason to stop being optimistic while all the big buzz words of the year continue to be flashed in headlines — tech, AI, crypto.

Apple is resilient even as it grapples with slowing growth and problems in markets like China. On the other hand, new entrant X.AI will compete with the likes of ChatGPT creator OpenAI. It also has alumni of DeepMind, OpenAI, Google Research, Microsoft Research, Twitter and Tesla all working to build it.

News highs in bitcoin have become increasingly frequent over the past several weeks. Bernstein predicted about a month ago that the price of the world's most popular cryptocurrency could hit $150,000 by 2025 as excitement grows about a bitcoin exchange-traded fund.

And from an economic standpoint, things aren't looking as dreadful as they did earlier this year, as investors and economists debate whether we've finally reached the much discussed "soft landing."

Brookings Institution economists describe a soft landing as "'Goldilocks' porridge' for central bankers." In this scenario, the economy is "just right — neither too hot (inflationary) nor too cold (in a recession)," they said.

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December 5, 2023