S&P 500, Nasdaq edge lower with rate cuts, inflation data in focus

By Investor Empires On Dec 12, 2024

President-elect Donald Trump rang the opening bell Thursday morning as technology stocks fell after new inflation data cast doubt on investors’ confidence in the future path of interest rates.

The Dow Jones Industrial Average (^DJI) embraced the flat line, while the S&P 500 (^GSPC) fell about 0.2%. The Nasdaq Composite (^IXIC) fell 0.5% to lead the way lower.

Investors received another piece of the inflation puzzle — an update on wholesale prices — after the latest consumer inflation data boosted stocks on Wednesday, lifting the Nasdaq above 20,000 for the first time.

The matching CPI reading removed one of the last remaining risks to the Fed’s monetary easing in December. That has boosted bets on a quarter-point rate cut in December to a probability close to 99%, according to Fed forecasts. CME FedWatch tool.

But the November producer price index released Thursday morning came in hotter than expected, rising 0.4% from the previous month. Economists had expected an increase of 0.2%. This has brought into focus the chances of the Fed keeping interest rates steady in January, with many officials expressing a dovish stance on policy.

Elsewhere in central banking, the Swiss National Bank unexpectedly cut its key interest rate by 0.5%, its biggest cut in nearly 10 years. The move paved the way for the European Central Bank’s decision later on Thursday, which is expected to lead to a fourth interest rate cut this year given the difficulties facing the region’s economy.

Adobe’s (ADBE) downbeat revenue outlook also helped lighten the mood, revealing the Photoshop maker’s struggle to get a return on its investments in artificial intelligence. Shares of the software maker fell about 12% in early trading.

He lives 6 updates

Trump rings the opening bell as technology stocks lead the S&P 500 and Nasdaq lower

President-elect Trump rang the opening bell Thursday morning as stocks retreated from record levels after new inflation put a question mark over whether the Federal Reserve will cut interest rates next week.

The Dow Jones Industrial Average (^DJI) was down 0.1%, while the S&P 500 (^GSPC) was down nearly 0.2%. The Nasdaq Composite (^IXIC) fell 0.4% after closing above 20,000 for the first time.

Technology stocks led the decline on Thursday with Nvidia (NVDA) stock falling more than 2%. Adobe (ADBE) shares were also lower at the open after the company issued weak guidance for fiscal 2025.

Wholesale prices in November came in hotter than expected, raising questions about whether Federal Reserve officials will choose to cut interest rates at their next policy meeting starting on December 18.
Federal Aviation Administration head Michael Whitaker is stepping down

The head of the Federal Aviation Administration (FAA) will step down on January 20, the day President-elect Donald Trump will be sworn into office.

Michael Whitaker said he was leaving his position in a letter issued Thursday morning.
Wholesale prices rise more than expected in November

Stock market futures fell after data released this morning showed that wholesale prices rose more than expected in November, putting a question mark over whether Federal Reserve officials will want to cut interest rates at their policy meeting next week.

The Producer Price Index rose 0.4% from the previous month, compared to expectations of 0.2%. Whole selling prices, excluding volatile food and energy prices, rose 3.4% year-on-year, versus expectations of 3.2%.

Fed officials want to see inflation slow as they continue their easing cycle. The Federal Reserve’s Open Market Committee will meet on December 18 for its final interest rate setting meeting for the year.
Adobe drops 11% in premarket on weak outlook

Shares of Adobe (ADBE) fell more than 11% before the market open on Thursday after the company issued weak guidance for fiscal year 2025.

In its earnings Wednesday, Adobe said it expects revenue between $23.3 billion to $23.6 billion and adjusted earnings per share between $20.20 and $20.50, according to Bloomberg estimates. Wall Street analysts had expected the company to be on track for annual revenues of $20.20 and $20.50. Bloomberg data showed $23.8 billion and adjusted earnings per share of $20.52.

The worse-than-expected outlook has investors concerned that artificial intelligence will disrupt Adobe’s business. TD Cowen downgraded the stock to a Hold rating on Thursday morning.

However, Wall Street analysts largely maintained their buy ratings on the stock. About 34 analysts tracked by Bloomberg recommend buying Adobe stock.
Good morning. Here’s what’s happening today.
Trump rings the opening bell of the New York Stock Exchange today

It will be a busier day than usual in front of the iconic New York Stock Exchange, where President-elect Donald Trump is scheduled to ring the opening bell.

Ringing the bell at the podium seems appropriate for the next president, who has long looked to stock market performance as an indicator of how his policies will play out.

As a fan of memory, in 1985 Ronald Reagan became the first US president to ring the bell while in office.

“With tax reform and budget control, our economy will be free to expand to its full potential, driving the bears into permanent hibernation,” Reagan said. “We will free the bull.”

the The bull was released For stocks in Trump’s first term and during President Joe Biden’s term. The S&P 500 rose 61% under Trump from Inauguration Day through December 11. It advanced by 58% from the day of Biden’s inauguration to December 11.

Watch useful history below from Reagan’s visit.

Yahoo Finance’s Jared Blecker will be outside the NYSE this morning. Follow live on Yahoo Finance for reports and more from our team!