U.S. stocks ended lower on Thanksgiving Eve, with tech stocks leading the decline, as a jump in October inflation raised concerns that the Federal Reserve could take a cautious approach to future rate cuts. All three major indexes ended in negative territory.
The Dow Jones Industrial Average (DJI) slid 0.3% or 138.25 points, to close at 44,722.06 points. The blue-chip index recorded its first loss in six sessions.
The S&P 500 declined 0.4% or 22.89 points, to end at 5,998.74 points. Tech and consumer discretionary stocks were the worst performers.
The Consumer Discretionary Select Sector SPDR (XLY) lost 0.5%, while the Technology Select Sector SPDR (XLK) declined 1.4%. Six of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq shed 0.6% or 115.10 points to finish at 19,060.48 points.
The fear-gauge CBOE Volatility Index (VIX) was down 1.42% to 13.90. Advancers outnumbered decliners on the NYSE by a 1.64-to-1 ratio. A total of 11.40 billion shares were traded on Wednesday, lower than the last 20-session average of 14.92 billion.
Wednesday’s light trading ahead of the Thanksgiving holiday, saw investors capitalizing on gains from major technology stocks that have generally done well this year, sending Nasdaq down. The moves came after fresh data showed inflation rose in October.
Personal consumption inflation (PCE), the Federal Reserve’s preferred inflation gauge, climbed 0.2% sequentially in October and 2.3% from year-ago levels. Core PCE, which excludes the volatile food and energy prices, rose 0.3% month over month and 2.8% year over year.
Although both PCE and core PCE inflation came in line with the consensus estimates, concerns grew that the Federal Reserve could slow its pace of rate cuts in the future. Inflation is still higher than the Federal Reserve’s 2% target and the central bank has hinted earlier that though it will cut interest rates, it will be gradual.
Tech and discretionary stocks suffered following the release of the inflation report. Shares of NVIDIA Corporation (NVDA) fell 1.2%, while other tech giants like Meta Platforms, Inc. (META) and Salesforce, Inc. (CRM) fell 0.8% and 3.5%. NVIDIA carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Trading volume will remain low this holiday-shortened week, with markets set to close early on Friday.
On Wednesday, trading volume was almost one-fifth compared to other days. Despite that, it has been an impressive week so far, with the Dow and S&P 500 hitting all-time closing highs earlier this week. All three indexes are on track to close November in the green, with not much activity expected on the last trading day of the month.
Source: Stock Market News for Nov 29, 2024
