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Stock Market Today: Tech Rally and Inflation Data Drive Market Upswing
The U.S. stock market experienced a significant upswing on Wednesday, September 12, 2024, driven by a tech rally and mixed inflation data. The S&P 500 gained 1.1%, or 58.61 points, to finish at 5,554.13 points, after initially dropping as much as 1.6% during its session lows. The Dow Jones Industrial Average (DJI) rose 0.3%, or 124.75 points, to end at 40,861.71 points, after declining as much as 1.8% at one point during the day. The tech-heavy Nasdaq jumped 2.2%, or 369.65 points, to close at 17,395.53 points.
Inflation Data and Market Reaction
The Labor Department reported that the consumer price index (CPI) rose 0.2% in August, in line with July and the consensus estimate. However, the core CPI, which excludes the volatile food and energy prices, rose 0.3%, higher than expectations of an increase of 0.2%. This initially dampened hopes of a half-point rate cut by the Federal Reserve in its upcoming FOMC meeting. Market participants are now pricing in an 85% chance for a 25-basis point rate cut by the Fed, up from 66% on Tuesday. The probability of a 50-basis point rate cut dropped to 15% from 34% seen a day earlier, according to the CME Group's FedWatch Tool.
Despite the initial disappointment, the market rebounded in the afternoon session, helped by dip buyers. The Technology Select Sector SPDR (XLK) jumped 3.4%, and the Consumer Discretionary Select Sector SPDR (XLY) added 1%. Six of the 11 sectors of the benchmark index ended in positive territory. The fear-gauge CBOE Volatility Index (VIX) was down 7.29% to 17.69. Advancers outnumbered decliners on the NYSE by a 1.4-to-1 ratio. On the Nasdaq, a 1.24-to-1 ratio favored advancing issues. A total of 12.19 billion shares were traded on Wednesday, higher than the last 20-session average of 10.8 billion.
Tech Stocks Lead the Rally
NVIDIA Corporation ($NVDA) led the rally, following a report that the U.S. government is thinking about allowing the semiconductor giant to export high-tech chips to Saudi Arabia. The company's shares ended 8.2% higher. Mega-cap tech stocks gained the most. Shares of Microsoft Corporation ($MSFT) rose 2.1%, and shares of Apple Inc. ($AAPL) rose 1.2%. Some major U.S. lenders who took a beating in the earlier session ended the day with small gains. Goldman Sachs Group, Inc. ($GS) rose 0.9%, and shares of JPMorgan Chase & Co. ($JPM) closed 0.8% higher.
Asian Markets and Currency Movements
Asian stock markets experienced a general upswing on Thursday, buoyed by positive movement on Wall Street. In Japan, the Nikkei 225 index surged by 3.4%, concluding the day at 36,833.27. This increase was partly a response to earlier significant declines. The weaker yen positively impacted certain companies, enhancing the value of their international earnings when converted back into yen. Toyota Motor Corporation saw a 3.8% rise, while Nintendo Company Limited increased by 1.5%. In the foreign exchange market, the U.S. dollar appreciated to 142.98 yen from 142.28. The euro was priced at $1.1018, slightly up from $1.1017.
Other Market News
In other parts of the Asia-Pacific, Australia's S&P/ASX 200 index increased by 1% to 8,870. South Korea's Kospi index rose by 2% to 2,209. The Hang Seng index in Hong Kong jumped by 1% to 17,338, whereas the Shanghai Composite index fell by 0.2% to 2,012.
Live Trading and Market Analysis
In live trading sessions, market analysts discussed various stocks and their movements. For instance, M&P Inc. ($MNPR) saw significant gains after releasing phase one data from its clinical trials. The company has a cash runway of six million dollars and only burned about two million dollars a quarter, making it less likely to need an offering soon. Smart for Life Inc. ($SMFL) experienced a downtrend bleed despite trading up in the after-hours on some light volume. The stock has a float of 110,000 shares and averages 2.6 million shares traded daily.
Producer Price Index and Jobless Claims
Before the market opened, the August Producer Price Index (PPI) suggested that inflationary pressures are easing, potentially allowing the Fed to begin reducing rates. Wholesale prices increased by 0.2% month-over-month, surpassing economists' forecasts. On a yearly basis, the PPI rose by 1.7%, aligning with expectations, while the previous month's figures were adjusted downward. Additionally, new data indicated that initial jobless claims rose more than anticipated, reaching 230,000, an increase of 2,000 from the previous week. Following these reports, traders raised their odds of a 25 basis point cut to 87%, up from 50% just a few days earlier.
Corporate News and Market Impact
On the corporate side, shares of Moderna Therapeutics, Inc. ($MRNA) plummeted by 17% after the biotechnology firm revised its revenue projections for 2025 downwards. The company also announced plans to reduce its annual research and development budget by approximately $1.1 billion by 2027. Delta Air Lines, Inc. ($DAL) saw its stock rise initially before slipping into negative territory on Thursday, despite the airline projecting its full-year profits to land at the midpoint of its earlier forecast, even after a summer technology issue.
Conclusion
The stock market today was marked by a significant upswing driven by tech stocks and mixed inflation data. The S&P 500 and Nasdaq Composite showed little movement following their earlier gains, while the Dow Jones Industrial Average also remained stable. Investors are closely monitoring these indicators as the Federal Reserve prepares for its upcoming meeting, where a rate cut is widely anticipated, though the magnitude of that cut remains uncertain.
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