4:19pm: Amgen recovers after selloff
Wall Street closed on a high note Tuesday after a turbulent start.
The S&P 500 rose 0.6% to secure a record close of 6,022 points, while the tech-heavy Nasdaq also climbed 0.6% at 19,174. The Dow Jones recovered from earlier losses to finish up 0.3% at 44,860, marking back-to-back record highs.
The session had a turbulent start as the Dow faced pressure from Amgen, which plunged as much as 12% intraday following lackluster weight-loss drug data that left Wall Street unimpressed. The pharmaceutical giant trimmed its losses by the end of the day, closing 5% lower.
Investors largely shrugged off President-elect Donald Trump's renewed tariff threats targeting major trading partners, including China, Canada, and Mexico. Markets had been hopeful that Treasury Secretary nominee Scott Bessent would temper such aggressive moves, but Trump's remarks created early volatility in Tuesday's trading.
The Federal Reserve also captured market attention, as the minutes from its November 7 meeting revealed a preference among officials for a gradual pace of interest rate adjustments, contingent on economic stability. The minutes underscored the Fed's cautious approach and set the stage for Wednesday's release of the October Personal Consumption Expenditures (PCE) index, the central bank's favored inflation metric.
3:12pm: Fed to ‘gradually’ lower rates
The S&P 500 headed towards a record high as minutes from the Federal Reserve’s latest rate-setting meeting showed officials are confident inflation is easing while the labor market remains strong, pointing to further rate cuts at a gradual pace.
“In discussing the outlook for monetary policy, participants anticipated that if the data came in about as expected, with inflation continuing to move down sustainably to 2% and the economy remaining near maximum employment, it would likely be appropriate to move gradually toward a more neutral stance of policy over time,” the minutes said.
However, participants noted that monetary policy decisions “were not on a pre-set course and were conditional on the evolution of the economy and the implications for the economic outlook.”
Jamie Cox, Harris Financial Group managing partner, does not see the Fed pausing its rate cut trajectory just yet.
“The minutes did nothing to alter my view that the policy rate is going to be adjusted lower next week and will continue to do so through the next calendar year,” Cox said.
The S&P 500 had added 0.5% at 6,015 points, eyeing a record close. The Nasdaq was up 0.5% at 19,142 points and the Dow Jones added 0.2% at 44,842 points.
2:16pm: Kohl's, Novo Nordisk (NYSE:NVO), Eli Lilly big movers
Some movers on the day:
Kohl's Corporation (NYSE:KSS) shares plunged 17% after the department store group lowered its full-year outlook after softer sales in the third quarter, with CEO Tom Kingsbury's departure announced late yesterday.
Net sales in the past quarter fell 8.8% to $3.5 billion, with comparable sales down 9.3%, as softness in apparel and footwear overshadowed strong performances in Sephora, home décor, gifting, and Babies “R” Us shops.
Earnings per diluted share fell to $0.20 from $0.53 in the prior year.
On the flipside, shares of obesity drugmakers Novo Nordisk (NYSE:NVO) and Eli Lilly and Co (NYSE:LLY) moved higher after the Biden administration proposed expanded coverage of anti-obesity medications under Medicare and Medicaid.
Novo Nordisk (NYSE:NVO), which makes several drugs for obesity including Ozempic (semaglutide), saw its shares add 2.4% on the news at $107.
Eli Lilly, the firm behind Zepbound (tirzepatide), was up 5.9% just shy of $800.
1:20pm: Deutsche Bank sees higher inflation in 2025 if tariffs go ahead
Adding tariffs on Canada and Mexico would likely lift core PCE inflation above 3% in 2025, with "more marginal effects beyond," analysts at Deutsche Bank highlighted.
Deutsche Bank notes that imports from Canada and Mexico make up about 4.7% of headline personal consumption expenditures (PCE) and 5.4% of core PCE. If a 25 percentage point tariff were fully passed through all production stages, it could raise the core PCE price level by 1.4% (5.4% of 25pp).
However, the extent of this passthrough is uncertain and depends on various factors, including currency fluctuations, product diversion, and retailer margins.
"In our outlook piece, we used a baseline passthrough of 75%, which would give a price level impact closer to 1%. This assumption was broadly in line with the aforementioned academic research studying the tariff pass-through during the first trade war," analysts noted.
"This would likely phase in over several quarters as importers, wholesalers, and retailers adjusted their prices, but could increase our 2025 core PCE inflation forecast from 2.6% to 3.7%.
"Given that these are price level increases, the impact on inflation beyond 2025 would be more marginal."
12:25pm: Amgen slump drags Dow
Stocks were generally mixed by midday as investors weighed corporate updates and awaited key Federal Reserve signals.
The S&P 500 edged up about 0.3%, supported by gains in several sectors, while the tech-heavy Nasdaq outperformed, rising 0.5%. The Dow Jones, however, slipped 0.3%, dragged down by an 11% plunge in Amgen (AMGN) shares after the drugmaker's weight-loss data failed to meet Wall Street's high expectations.
Market participants are also keeping a close eye on the Federal Reserve, with minutes from the central bank’s most recent meeting set to be released later today. The document will provide insight into the Fed’s approach to interest rate cuts heading into 2024. Policymakers have signaled a slower pace of cuts compared to earlier forecasts, reflecting a cautious stance amid persistent inflationary pressures.
Adding to the week’s anticipation, the October reading of the Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge, is due Wednesday. This data is expected to further clarify the inflation trajectory and inform future monetary policy decisions.
11:15am: Seismic changes
Investors should prepare for "seismic changes" as President-elect Donald Trump plans significant policy shifts, according to Nigel Green of deVere Group.
Green points to the proposed 10% tariff on China and 25% tariffs on Canada and Mexico and the newly unveiled Department of Government Efficiency (DOGE)'s intent to pursue $500 billion in federal spending cuts, posing risks to sectors dependent on government contracts.
“These dual measures—protectionist tariffs and sharp government spending cuts—create a perfect storm of volatility for investors. The risks are significant and far-reaching, making this a pivotal moment for portfolio reassessment," Green comments.
Trump’s tariff agenda signals major disruptions in global trade dynamics, with key trading partners already signaling potential retaliation. The economic consequences could ripple across industries, particularly those dependent on international supply chains and exports.
“Investors should prepare for immediate volatility in sectors such as automotive, technology, and agriculture—industries deeply intertwined with trade agreements and foreign markets,” says the deVere CEO.
10.13am: US consumer confidence picks up in November
US consumer confidence grew this month and surpassed expectations, Conference Board figures showed on Tuesday.
The Conference Board’s consumer confidence index ticked up to 111.7 in November from last month’s 109.6 and ahead of expectations for 111.3.
“November's increase was mainly driven by more positive consumer assessments of the present situation, particularly regarding the labor market,” Conference Board chief economist Dana M. Peterson said.
“Compared to October, consumers were also substantially more optimistic about future job availability, which reached its highest level in almost three years.”
9.46am: Mixed start on Wall Street
Fortunes on Wall Street were mixed as trading got underway in the wake of president-elect Donald Trump’s latest pledges to introduce sweeping import tariffs upon taking office.
The Nasdaq surged 0.5% following Tuesday’s opening bell and the S&P 500 added 0.3%.
But the Dow Jones slipped 0.3% and away from its record close on Monday, while the Russell 2000 fell 0.5%.
Trump had warned that 25% tariffs would be slapped on all goods from Mexico and Canada in a social media post.
“While this move appears to be a negotiation tactic from Trump ahead of his January 20 inauguration, the market will increasingly become headline-driven and make for tricky trading conditions,” City Index analyst Fawad Razaqzada commented.
Among companies, Amgen Inc (NASDAQ:AMGN, ETR:AMG) was one of the day’s early losers, dropping 11.5% after releasing results from its MariTide weight loss drug trial.
These showed the injection helped obesity patients to lose up to 20% of their weight on average after a year, but appeared to underwhelm against heightened expectations.
Best Buy Co Inc (NYSE:BBY) fell by 8.7% after cutting guidance and underwhelming with third quarter figures… Read more
Zoom Video Communications Inc (NASDAQ:ZM) slipped 6.8% in the meantime as a bout of profit-taking appeared to hit the company despite expectation-beating results overnight… Read more
9.23am: Kohls plummets as boss departure followed by weak results
Kohls Corp shares plummeted over 18% in pre-market trading after poor results followed news the retailer’s chief executive was to depart.
Revenue of $3.51 billion and $0.20 in per-share earnings over the third quarter, unveiled on Tuesday, missed expectations for $3.85 billion and $0.27 respectively.
This followed news on Monday that chief executive Tom Kingsbury was to step down from running the company less than two years after taking the position.
Shares fell 18.92% to $14.87 ahead of Tuesday’s open.
8.07am: Zoom shares sink ahead of open
Zoom Video Communications Inc (NASDAQ:ZM) shares fell almost 10% in pre-market trading on Tuesday following third-quarter results overnight.
Despite a forecast hike and plans to expand share buybacks, a rally ahead of the results, which has seen shares tick up 13.2% in the past five days, was attributed for the fall.
“Traders are probably taking profits going into this shortened and light Thanksgiving holiday week,” Running Point Capital chief investment officer Michael Ashley Schulman said.
Zoom had upped revenue and earnings guidance for the year to as much as $4.66 billion and $5.43 per share respectively, after beating expectations for the third quarter.
However, shares slumped 9.6% ahead of Tuesday’s open.
6.51am: Cautious start expected
Wall Street appeared on course to edge ever so slightly higher on Tuesday in a cautious start after president-elect Trump doubled down on plans for sweeping tariffs once in office.
Futures had the Nasdaq, S&P 500 and Dow Jones all 0.03% higher ahead of Tuesday’s opening bell.
Trump on Monday evening pledged to bring in 25% tariffs on “all goods” from Canada and Mexico, alongside 10% for those from China, in a post on his Truth Social Platform.
The comments rippled across global markets, sending shares down in the likes of Europe and the US dollar up 0.76% against the Canadian dollar and 1.18% versus the Mexican peso.
“Trump’s tariff talk is a reminder that his posts on social media can be market-moving events, even if his assertions never see the light of day,” XTB analyst Kathleen Brooks said.
Aside from Trump, HP Inc (NYSE:HPQ) and CrowdStrike Corp’s earnings were in focus, alongside a string of macroeconomic updates, including Federal Open Market Committee minutes.
“The market is not fully convinced a rate cut is coming,” Brooks said, highlighting a 56% chance of a reduction in December’s meeting being priced in.
“Today’s minutes should add some clarity to the situation. If they signal that a rate cut is likely, it could be a much-needed catalyst to a recovery in market sentiment.”