Stock Market Today: Stocks Finish Lower after Choppy Trading Session

Last Updated 4:19PM EST

Stock indices finished today’s choppy trading session in the red. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 fell 0.63%, 0.89%, and 0.98%, respectively.

The real estate sector was the session’s laggard, as it lost 2.63%. Conversely, the healthcare sector was the session’s leader, with a gain of 0.09%. It was also the only sector in the green today.

Furthermore, the U.S. 10-Year Treasury yield increased to 3.87%, an increase of more than two basis points. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.41%. This brings the spread between them to -54 basis points.

Compared to yesterday, the market is pricing in a higher chance of a lower Fed Funds rate for the end of the year. In fact, the market’s expectations for a rate in the range of 4.25% to 4.5% increased to 85.4% from yesterday’s expectations of 80.6%.

In addition, the market is now also assigning a 14.6% probability to a range of 4.5% to 4.75%. For reference, investors had assigned a 19.4% chance yesterday.

Stocks Turn Green Heading into the Close

Last Updated at 3:00PM EST

Stocks are in the green heading into the final hour of today’s trading session. As of 3:00 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.3%, 0.1%, and 0.1%, respectively.

The market has been struggling to pick a direction today as it tries to digest last week’s economic data along with comments from Fed Vice Chair Lael Brainard.

Although Brainard acknowledged that it would be appropriate for the central bank to slow down its rate hikes soon, she was clear in saying that there is still additional work to be done.

As a result, investors shouldn’t get carried away by one data point and expect the market to turn around anytime soon. Indeed, according to Bloomberg, S&P 500 trading liquidity is near all-time lows, meaning that the recent euphoria in stocks doesn’t really have much support from investors.

It’s also worth mentioning that this isn’t the first time that CPI appeared to have peaked only to accelerate again in the following months. Thus, it would be wise for investors to wait for a downward trend in inflation to be established before piling into stocks.

Indices See Choppy Trading; Gasoline Prices Fall

Last Updated at 12:25PM EST

Stock indices remain mixed halfway into today’s trading session. As of 12:25 p.m. EST, the S&P 500 and the Nasdaq 100 are down 0.1% and 0.3%, respectively. On the other hand, the Dow Jone Industrial Average is up 0.2%.

In addition, WTI crude oil continues to slide today, as it hovers around the high-$85 per barrel range. The commodity’s overall downtrend has caused prices at the pump to decline when compared to last week.

Indeed, the national average for regular gas was last $3.773 per gallon, down from last week’s reading of $3.804. This is significantly lower than the all-time high of $5.016 per gallon on June 14.

The highest prices can be found in California, where prices are substantially higher than the national average, at $5.433 per gallon. On the other hand, Texas is the state with the lowest gas prices, at $3.11 per gallon.

It’ll be interesting to see if this downward trend will continue going forward as the Federal Reserve looks to raise interest rates to fight inflation while oil producers lower production in order to maintain the price.

Stocks Fall as Bond Yields Rise

Last Updated 10:00AM EST

Stock indices are mixed 30 minutes into today’s trading session. As of 10:00 a.m. EST, the S&P 500 and the Nasdaq 100 are down 0.2%, and 0.7%, respectively. On the other hand, the Dow Jones Industrial Average is slightly up by 0.1%.

The real estate sector (XLRE) is the laggard so far, as it is down 0.9%. Conversely, the energy sector (XLE) is the session’s leader with a gain of 0.9%.

WTI crude oil remains below $90 per barrel as investors weigh the impact of a softening outlook that’s being caused by recession fears. Indeed, OPEC once again lowered its forecast for oil demand, pointing to climbing interest rates and high inflation as the catalysts.

Meanwhile, bond yields are higher to start the day, as the U.S. 10-Year Treasury yield is now hovering around 3.88%. This represents an increase of more than two basis points from the previous close.

Similar movements can be seen with the Two-Year yield, which is now at 4.43%. However, the spread between the 10-Year and Two-Year U.S. Treasury yields is still negative, as it currently sits at -55 basis points.

Futures Decline Amid Close Elections, Lower CPI

First Published 6:23AM EST

Stock futures moved lower early Monday morning as the dramatic improvement in investor sentiments eased, following a cooler-than-expected inflation reading.

Futures on the Dow Jones Industrial Average (DJIA) lost 0.26%, while those on the S&P 500 (SPX) tumbled 0.39%, as of 6.18 a.m. EST, Monday. Meanwhile, the Nasdaq 100 (NDX) futures dipped 0.69%.

Inflation for October came at 7.7% which was below the estimated rate of 7.9%, leading to an inflation relief rally. The bet is that the Federal Reserve might soon slow down its aggressive interest hiking campaign.

Last week, the S&P 500 climbed 5.9%, clinching its best week since June. Being the most sensitive to interest rates, the tech sector saw investors flocking in, leading to the tech-heavy Nasdaq Composite gaining a remarkable 8.1% last week. Meanwhile, the Dow ended the week 4.2% higher.

The elections are also playing a key role in influencing investor sentiments. The latest is that the Democratic party will retain its control of the Senate after a key win in Nevada, regardless of the outcome of the December 6 runoff election in Georgia. Meanwhile, the Republicans are largely expected to hold the reins of the House, albeit with a slim majority.

Recently, nonbiased analysts have been more tilted toward Republican control of the Senate as well as the House, which would have given the GOP more power to reverse some of the laws passed by President Biden and quickly pass key bills to raise the debt ceiling.

On the earnings front, major retailers are expected to report this week, including Tyson Foods (NYSE:TSN), Walmart (NYSE:WMT), Home Depot (NYSE:HD), Target (NYSE:TGT), Lowe’s (NYSE:LOW), Macy’s (NYSE:M), TJX Companies (NYSE:TJX), and Kohl’s (NYSE:KSS). Numbers posted by these retailers will help investors understand where, what, and how much consumers are shopping with lesser disposable income due to inflation.

The Producer Price Index reading for October is due out on Tuesday, giving us a better look into the economic situation.

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