The US stock market closed mixed on Friday, November 24, 2023, after a half-day session following the Thanksgiving holiday. The Dow Jones Industrial Average edged higher, while the S&P 500 and the Nasdaq Composite ended slightly lower. Investors weighed the latest inflation data and the impact of the new coronavirus variant on the global economy.
Dow Jones Extends Winning Streak to 11 Days
The Dow Jones Industrial Average gained 0.07% to close at 36,091.23, extending its winning streak to 11 consecutive days, the longest since January 1987. The blue-chip index was supported by gains in Boeing, Caterpillar, and Chevron, which rose more than 1% each. The Dow also outperformed the other major indexes, as it has a lower exposure to the technology sector, which was under pressure amid rising bond yields and valuation concerns.
S&P 500 and Nasdaq Slip as Tech Stocks Retreat
The S&P 500 slipped 0.12% to finish at 4,524.05, while the Nasdaq Composite fell 0.34% to settle at 14,001.23. Both indexes snapped a three-day winning streak, as technology stocks retreated amid rising bond yields and valuation concerns. The 10-year Treasury yield, which moves inversely to bond prices, rose to 1.64%, the highest level since June. Higher yields tend to weigh on growth-oriented sectors, such as technology, as they reduce the present value of future cash flows.
Some of the biggest tech names, such as Apple, Microsoft, Amazon, and Meta Platforms, closed in the red, dragging down the broader market. However, some tech stocks bucked the trend and posted gains, such as Tesla, which rose 2.4% after announcing a new factory in Indonesia, and Nvidia, which gained 1.6% after receiving positive analyst comments.
Inflation Data Meets Expectations, New Virus Variant Raises Concerns
Investors also digested the latest inflation data, which met expectations and showed a slight moderation in price pressures. The core personal consumption expenditures (PCE) index, the Federal Reserve’s preferred inflation gauge, rose 0.3% in October from the previous month and 3.7% from a year ago, matching the estimates of economists polled by Dow Jones. The headline PCE index, which includes food and energy prices, rose 0.5% month over month and 4.7% year over year, slightly above the expectations of 0.4% and 4.6%, respectively.
The inflation data came ahead of the Federal Reserve’s policy meeting next week, where the central bank is expected to announce a reduction in its monthly bond purchases by $15 billion, as part of its tapering plan. The Fed has maintained that inflation is transitory and largely driven by supply chain disruptions and pent-up demand, but some analysts have warned that inflation could persist longer than expected and force the Fed to raise interest rates sooner than anticipated.
Meanwhile, investors also monitored the developments of a new coronavirus variant, which was detected in South Africa and has raised concerns about its potential impact on the global economy and the effectiveness of the vaccines. The World Health Organization (WHO) said it was convening an emergency meeting to discuss the variant, which has been classified as a “variant of concern” and named Omicron. Several countries, including the US, UK, and EU, have imposed travel restrictions on South Africa and neighboring countries to prevent the spread of the variant.
Market Outlook
The US stock market will be closed on Thursday, November 30, 2023, for the Thanksgiving holiday, and will have a shortened session on Friday, December 1, 2023, ending at 1 p.m. ET. The market will resume its normal trading hours on Monday, December 4, 2023.
The market will also be focused on the upcoming earnings reports, economic data, and Fed policy meeting next week. Some of the notable companies that are scheduled to report their quarterly results include Salesforce, Zoom, HP, Dell, and Kroger. Some of the key economic data that will be released include the ISM manufacturing and services indexes, the ADP private payrolls report, the nonfarm payrolls report, and the unemployment rate.
The Fed policy meeting will be held on Tuesday and Wednesday, December 5 and 6, 2023, and will be followed by a press conference by Fed Chair Jerome Powell. The market will be looking for clues on the Fed’s tapering plan, inflation outlook, and interest rate projections.
