US stock indexes drop from record highs

Pick a reason why, but stocks have done quite well on #FridayThe13th lately.

Up 7 in a row, down Oct '13 but up last time in September 2024.

Hasn't been lower two in a row since 2016. pic.twitter.com/LfN3Ijlh4l

— Ryan Detrick, CMT (@RyanDetrick) December 13, 2024

Stocks fell on Tuesday as traders digested a year-end rally to record levels and awaited new U.S. inflation data set for release this week. The Nasdaq Composite lost 0.3% to end at 6,034.91, and the S&P 500 dropped 0.25% to 19,687.24. Both indexes booked back-to-back losses. The Dow Jones Industrial Average declined for a fourth day, sliding 154.10 points, or 0.35%, to 44,247.83.

S&P 500 buybacks were $226.6b in 3Q24, down 4.0% from 2Q24 and up 22.1% from 3Q23; top 20 S&P 500 companies accounted for 53.2% of 3Q24 share repurchases, up from 52.3% in 2Q24 ⁦@SPDJIndices⁩ pic.twitter.com/JUOd34gV8z

— Liz Ann Sonders (@LizAnnSonders) December 13, 2024

Shares of Oracle slumped 6.7% after the database software company posted earnings that missed Wall Street’s estimates, although its stock has jumped around 68% this year. “[The market] has been narrowing over the past week,” said CFRA Research’s chief investment strategist Sam Stovall. “Investors are waiting to see if this is just the traditional seasonal softness in mid-December.”

Stock Market Outlook: Nifty to retest 25K? US Fed meeting, IPO listings among key factors to watch this weekhttps://t.co/YV48YOsgKi

— ET NOW (@ETNOWlive) December 15, 2024

Nvidia was a breakout winner of the session, advancing 5.6% on the back of Google unveiling its new chip. That puts Nvidia’s year-to-date gains at more than 32%. This comes after the major averages fell on Monday, with the S&P 500 and Nasdaq Composite sliding about 0.6% from recent records. Intel shares were more than 2% lower Tuesday, extending losses seen in the previous session after a Chinese regulator said it was investigating the chip giant for possibly violating the country’s antimonopoly law. Investors are now waiting on the U.S. inflation data due Wednesday, which could influence how the Federal Reserve proceeds on interest rates at its Dec. 17-18 meeting. Economists polled by Dow Jones forecast that headline inflation rose 0.3% in November and 2.7% over the prior 12 months. Shares of U.S. Steel plunged late Tuesday afternoon on a report that President Joe Biden plans to block the company’s acquisition by Japan’s Nippon Steel later this month. U.S. Steel stock was briefly halted due to volatility. The company’s shares were down more than 9% after trading resumed. People familiar with the matter indicated that Biden will block the $14.1 billion sale once the Committee on Foreign Investment in the United States submits its review to him by Dec. 22 or Dec. 23.

Stocks fall amid inflation concerns

Kroger shares surged 4% after a U.S. judge nixed the grocers’ planned $25 billion merger with Albertsons. In contrast, Albertsons shares tumbled more than 3% and hit a 52-week low. The Biden administration had fought against the deal, arguing that the combination would reduce competition and lead to higher prices. However, Kroger pushed back, claiming that becoming a larger entity would result in cost savings that could be passed on to customers. Kroger shares have outperformed the market this year, with a 32% gain, while Albertsons shares have fallen 22%. President-elect Donald Trump’s proposed tariffs may not go into effect until late 2025, according to Wolfe Research’s Stephanie Roth. “We don’t expect sweeping tariffs to go into effect until late 2025,” Roth wrote. If a 10% universal baseline tariff and a 60% tariff on Chinese goods were to be implemented, Roth estimates the U.S. economy could take a hit of up to 1.2% in gross domestic product, with inflation increasing by 1.1%. The market is likely to see more upside over the following weeks, according to Barclays. “Momentum seems so strong that a continued rally appears to be the path of least resistance for the rest of 2024,” analyst Ajay Rajadhyaksha wrote in a note this week. Bond markets are expected to remain “range-bound” as investors await more details on President-elect Donald Trump’s policies. According to BTIG data, the S&P 500 has had more declining than advancing stocks in each of the last six completed trading days, yet the index has gained around 0.3% during that period. This six-day run with negative daily breadth and a positive overall return has not occurred in the past two decades. While stocks may be due for more gains in 2025, Citi believes investors should brace for more volatility given an uncertain policy outlook and raised valuations. “We maintain a positive view on U.S. equities heading into 2025,” wrote the firm’s U.S. equity strategist Scott Chronert. Nevertheless, a broad range of outcomes exists, with a year-end 2025 base case target for the S&P 500 of 6,500, a bull case of 6,900, and a bear case of 5,100. The ongoing valuation issue will be an ongoing hurdle, but Artificial Intelligence and potential policy changes could influence market directions. Shares of Oracle shed about 8% and are on pace for their worst day since Dec. 12, 2023, after the company posted disappointing earnings results.