4:10pm: Mixed markets ahead of Fed
Stocks closed mixed on Monday as investors prepared for the Federal Reserve's final policy meeting of the year.
The Nasdaq Composite surged 1.2% to close at 20,174, marking another record-breaking session. The S&P 500 added 0.4% to end at 6,074, while the Dow Jones Industrial Average slipped 0.3% to 43,717.
The day's trading was characterized by anticipation of the upcoming Fed meeting, with particular focus on potential interest rate cuts. Technology stocks provided significant support to the market, continuing their strong performance in 2024.
Bitcoin hit a new all-time high, reaching over $106,000 before settling around $103,600.
MicroStrategy shares rose ahead of its entry into the Nasdaq 100.
Large-cap tech stocks like Apple, Microsoft, and Amazon showed gains.
The market's attention is firmly fixed on the Federal Reserve's two-day meeting starting Tuesday, with widespread expectations of another potential interest rate cut. Recent economic data, including the flash U.S. composite PMI, showed robust service sector activity, potentially influencing the Fed's decision.
The S&P 500 has already achieved an impressive 27.33% gain since the start of 2024, reflecting a strong year for U.S. equities.
3:25pm: Slowing pace
The Fed is likely to signal a slower pace of rate cuts in 2025 through its statement, economic projections, and Chair Powell's remarks, Deutsche Bank expects.
"Powell's press conference is likely to emphasize that with policy still restrictive, the Committee believed it could modestly dial back the degree of restraint," analysts wrote.
"But with a strong economy, diminished downside risks to the labor market, and evidence that inflation is stickier than anticipated, the Fed will not be in a rush to get to a highly uncertain neutral level. Our baseline remains that a skip in early 2025 could turn into an extended pause, with the Fed having limited scope for additional easing next year."
2:05pm: Softbank makes $100B investment in US
Japanese multinational corporation SoftBank will invest $100 billion in the United States over the next four years, CEO Masayoshi Son announced during a joint appearance with President-elect Donald Trump on Monday.
Trump said the investment would create 100,000 jobs focused on AI and related infrastructure during his term.
“This historic investment is a monumental demonstration of confidence in America’s future, and it will help ensure that artificial intelligence, emerging technologies, and other industries of tomorrow are being created and grown right here in the USA,” Trump said.
Son added that “President Trump is a double down president. I’m going to have to double down.”
12:10pm: Tech rally pushes Nasdaq to new high
This year’s “Santa rally” has begun, with the Nasdaq 100 hitting a fresh record high of 20,117 points during Monday’s session.
At midday, the Nasdaq had added 1% at 20,102 points, the S&P 500 was up 0.4% at 6,072 points while the Dow Jones was flat at about 43,800 points.
Bitcoin traded at an all-time high of approximately $106,775 amid rising expectations the incoming Trump administration will be favorable for crypto, which boosted Bitcoin proxy MicroStrategy by 5.4%.
“It will come as no surprise to investors to hear that the final full week of trading in global markets in 2024 has started with more gains for the US while Europe struggles,” IG chief market analyst Chris Beauchamp said.
“This is the ‘Santa rally’ almost right on cue, with most US stocks having struggled in the first half of December, a tradition as hallowed as the second half’s gains.”
11:10am: Week ahead
The Federal Reserve’s final meeting of the year takes center stage alongside a slew of economic data releases this week.
The Fed will likely signal a slower pace of rate cuts in 2025, driven by persistent inflationary pressures and robust economic growth, analysts at Deutsche Bank believe.
Analysts predict that the Federal Open Market Committee (FOMC) will announce a widely anticipated 25 basis-point rate cut on Wednesday, completing a 100-basis-point recalibration signaled in September.
However, the tone of Fed Chair Jerome Powell’s press conference and the accompanying Summary of Economic Projections (SEP) is expected to emphasize caution. Powell is expected to stress that policy remains restrictive and that the latest cut represents a modest easing of this restraint.
9.47am: Stocks gain at open
Wall Street enjoyed a positive start to the week on Monday morning as stocks picked up early on.
The Nasdaq gained 0.5% after the opening bell, while the S&P 500 climbed 0.2% and the Dow Jones moved just above the mark.
Broadcom Inc (NASDAQ:AVGO, ETR:1YD) led the early risers as the chipmaker rallied once more by 5.7% on ongoing excitement around last Thursday’s record-breaking results.
These were driven by surging artificial intelligence demand, with further gains coming after shares hit a record late last week in the wake of the update.
Moderna Inc (NASDAQ:MRNA, ETR:0QF) also jumped by 5.4% early on, as Micron Technology Inc (NASDAQ:MU) and Applovin Corp also racked up gains.
7.31am: Stocks seen higher
Wall Street appeared on course for a positive start to the week which will see the Federal Reserve decide whether to cut interest rates further.
Futures had the Nasdaq up 0.4% ahead of Monday’s open, while the S&P 500 and Dow Jones were seen 0.2% higher each respectively.
Last week had brought a mixed showing on Wall Street as the Nasdaq climbed but Dow Jones and S&P 500 both fell.
Attention this week turned to the Federal Reserve’s interest rate decision on Wednesday, with markets anticipating a 25 basis point cut.
However, “it may be wise to approach the [meeting] with some caution,” Tickmill Group partner Patrick Munnelly said.
“Since the November meeting, demand data from the US has been consistently strong, and there has been a notable increase in firms' expectations following the election.
“On the other hand, inflation data has been somewhat disappointing, indicating that the disinflation trend observed earlier in the year has stalled.”