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12/03/24 Briefing


Wall Street closed mixed on Monday, dragged down by tech stocks. Chip stocks continued to weigh on the markets. Investors traded cautiously with an eye on this week’s inflation numbers. Two of the three major stock indexes ended in the red, while one ended in the green.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 46.97 points, or 0.1%, to close at 38,769.66. Twenty components of the 30-stock index ended in positive territory, while 10 ended in positive.

The tech-heavy Nasdaq Composite slid 65.84 points, or 0.4%, to close at 16,019.27.

The S&P 500 lost 5.75 points, or 0.1%, to close at 5,117.94. Six of the 11 broad sectors of the benchmark index closed in the red. The Industrials Select Sector SPDR (XLI), the Real Estate Select Sector SPDR (XLRE) and the Technology Select Sector SPDR (XLK) declined 0.5%, 0.5% and 0.3%, respectively, while the Materials Select Sector SPDR (XLB) advanced 1.1%.

The fear-gauge CBOE Volatility Index (VIX) increased 3.3% to 15.22. A total of 10.9 billion shares were traded on Monday, lower than the last 20-session average of 12.1 billion. Decliners outnumbered advancers by a 1.07-to-1 ratio on the NYSE. On the Nasdaq, declining issues outnumbered advancing ones by a 1.45-to-1 ratio.

Chip Stocks Continue to Fall

Semiconductor stocks continue to fall, with investors closely watching this week’s inflation numbers. If inflation comes in higher than expected, it might mean that the Fed would take cognizance, and its plans to cut rates might be pushed further into the backburner. Currently, it is widely expected that the first rate cut will be announced in June. The Philadelphia Semiconductor Index (SOX) fell 1.4% for the day. 

The Fed meets next week to decide on the policy. If it continues to not provide a clear vision for loosening the monetary policy, mega-cap growth stocks like tech stocks might feel the heat. Of these stocks, chip stocks are currently undergoing a correction from the overbought market.

Consequently, shares of NVIDIA Corporation NVDA and Advanced Micro Devices, Inc. AMD lost 2% and 4.3%, respectively. NVIDIA currently carries a Zacks Rank #1 (Strong Buy).

Treasury Yields Inch Higher

Keeping in tune with the sense of uncertainty prevalent in the markets with regard to the Fed’s monetary policy outlook, the benchmark U.S. 10-year Treasury yield rose slightly on Monday as investors kept a watch on key inflation data slated to release on Tuesday. The 10-year Treasury yield increased more than 1 bp to 4.098%. The yield on the 2-year Treasury note climbed by around 5 bps, ending at 4.536%.

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