A trader works, as a screen displays a news conference by Federal Reserve Chair Jerome Powell following the Fed rate announcement, on the floor of the New York Stock Exchange on July 26, 2023.
The S&P 500 rose on Monday, with tech shares kicking off the week on solid footing as investors awaited a key Federal Reserve meeting.
The broad market index traded 0.4% higher, and the Nasdaq Composite advanced 1.1%. The Dow Jones Industrial Average ticked down 19 points, or 0.04%. The 30-stock Dow entered the session riding a seven-day losing streak.
Shares of Apple, Tesla and Google-parent Alphabet all traded higher. Noticeably absent from the Nasdaq's trend higher was artificial intelligence darling Nvidia, which pulled back more than 2% and entered correction territory. Shares of Broadcom led the technology-heavy index higher with a gain of 8%.
The Fed set to begin its two-day policy meeting Tuesday. It's expected to cut rates by a quarter-point at its conclusion on Wednesday. The key for investors will be forward guidance on future policy moves.
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"While it's easy to make a big deal about every single FOMC decision and press conference, this final one of 2024 may be the most intriguing," said Jay Woods, chief global strategist at Freedom Capital Markets.
"Since the first cut in September, unemployment numbers have stabilized," he added. "However, the inflation numbers have ticked the other way ever so slightly. In fact, they have gone up each month since cuts began. Is this just 'sticky' or the start of a new trend?"
The stock market is coming off a sluggish week. The Dow fell 1.8% last week and has lost ground in each of the last seven sessions. The S&P 500 dipped 0.6%, and has retreated in four of the past five sessions. The Nasdaq outperformed, grinding out a gain of 0.3% for the week.
Money Report
Grindr shares rise after Goldman initiates buy rating
Shares of Grindr rose more than 7% in midday trading and hit a new 52-week high during the session on the heels of Goldman Sachs initiating coverage with a buy rating.
The firm called the company a "revenue compounder," and its price target on the name implies around 27% upside potential, as of Friday's close.
The stock has had a positive run this year, with shares soaring nearly 93%. Shares have also risen more than 19% in the past month.
— Sean Conlon
Oppenheimer raises Netflix price target, sees almost 16% upside from here
There may be more room to run for Netflix, according to Oppenheimer.
The firm, which has an outperform rating on the streaming giant, increased its price target by $240, and its updated target now implies 15.9% upside from Friday's close. The stock has already surged more than 88% year to date.
"NFLX remains the only investable mainstream media stock driven by: 1) competition continuing to weaken, benefiting already industry-low churn and driving content cost leverage; and 2) upside to monetization and subscribers estimates as the company has proven it can be a platform for live events further unlocking >500M global households," the firm wrote. "Near-term, we expect positive commentary from NFL Christmas Day games similar to Paul/ Tyson, driving sentiment into 4Q earnings."
The company is expected to report its fourth-quarter results after market close on Jan. 21.
— Sean Conlon
Goldman reiterates buy rating on Broadcom following Q4 results
Goldman Sachs sees even more upside ahead for Broadcom heading into next year.
Shares rose around 3% in the premarket after analyst Toshiya Hari reiterated his buy rating on the stock and hiked his price target. His updated target now reflects almost 7% upside from Friday's close.
"With 1) two additional Custom Compute customers secured, 2) the company's leadership position in AI Ethernet connectivity intact and 3) management executing well in Infrastructure Software (note VMware non-GAAP operating margins have expanded from ~30% immediately ahead of the acquisition to 70% in the quarter just reported), we now have even higher conviction on the company's forward revenue and earnings growth outlook," Hari wrote.
The move comes after the stock passed $1 trillion in market cap for the first time last week on the heels of its better-than-expected fourth-quarter earnings report. This year, shares have surged more than 101%.
— Sean Conlon
Cocoa futures surge nearly 5% to all-time high Monday
March cocoa contracts climbed as much as $539 or 4.8% to an all-time high of $11,839 per metric tonne (2,205 pounds) Monday.
Traders are adjusting to renewed concern over cocoa bean supplies that "have been compounded by longstanding industry problems, including crop disease and a legacy of low farmer pay," Bloomberg News reported. Higher raw material prices mean higher costs for chocolate manufacturers and higher prices for consumers.
So far in December, Hershey shares are higher by almost 4% while Mondelez has dropped 4.5% through Friday.
— Scott Schnipper, Gina Francolla
S&P 500 opens higher
The S&P 500 opened higher on Monday as investors look to the final Federal Reserve policy meeting of 2024.
The S&P 500 added 0.25%, while the Nasdaq Composite gained 0.54%. The Dow Jones Industrial Average ticked down 22 points, or 0.05%.
— Brian Evans
Stocks making the biggest moves premarket
Check out the companies making headlines before the bell:
- Ford Motor — The automaker fell 2.1% after Jefferies downgraded shares to underperform from hold. The firm mentioned concerns of an inventory overhang along with valuation.
- Honeywell — The industry giant saw shares rising 3% in premarket trading after the company said its board is exploring the possibility of separating its aerospace division.
- Super Micro Computer — Shares lost nearly 14% following a Friday Bloomberg report that the data center company had hired investment bank Evercore ISI to help it raise equity and debt capital. This comes after Super Micro missed deadlines to file its annual and quarterly financial reports. Concerns have now grown that the company might be delisted by the Nasdaq, despite CEO Charles Liang's reassurance that this will not happen.
The full list can be found here.
— Hakyung Kim
Super Micro Computer sinks on Bloomberg report
Shares of server maker Super Micro Computer tumbled nearly 14% Monday morning following a report from Bloomberg, released Friday, that revealed the company had hired investment bank Evercore to potentially help it raise equity and debt capital.
Investors have grown increasingly concerned that Super Micro might be delisted by the Nasdaq after missing previous deadlines to file its annual and quarterly financial reports. CEO Charles Liang's confidence that the stock would not be delisted seemingly did little to assuage these fears. The company now has until February to file its outstanding reports.
The company's woes grew in August after short seller Hindenburg Research disclosed a short position in Super Micro, citing alleged "accounting manipulation." In October, Ernst & Young resigned as the company's auditor.
Shares of Super Micro were last trading around 28% higher for the year.
— Lisa Kailai Han
Broadcom's surge continues after joining $1 trillion club
Shares of chipmaker Broadcom advanced more than 3% before the opening bell on Monday, adding to a sharp rise from last week that helped the firm reach a more than $1 trillion market capitalization for the first time.
Broadcom's rise comes after the company reported a steep rise in artificial intelligence-related revenue on Friday, on the heels of better-than-expected fourth-quarter earnings on the top and bottom lines.
— Brian Evans
Stocks could further gain heading into the end of 2024, says Piper Sandler
There is ample reason to believe stocks will further add to gains heading into the final weeks of trading of the year, according to Piper Sandler.
"As we approach mid-December, the equity markets remain constructive within their primary uptrends,' analyst Craig Johnson wrote Monday. "There appears to be a short-term rotation between large caps and SMID caps within the context of the broadening process, but our breadth indicators remain in buy positions."
"Use 'healthy' pullbacks that confirm support to add to positions as we watch for a 'Santa Claus rally' during the holidays and into year-end," Johnson added.
— Brian Evans
Softbank CEO to announce $100 billion investment in U.S. at Trump visit
Softbank CEO Masayoshi Son will announce a $100 billion investment in the U.S. over the next four years during a Monday visit to President-elect Donald Trump's residence Mar-a-Lago in Palm Beach, Florida, sources told CNBC's Sara Eisen.
The billionaire investor and founder of the Japanese tech-investing firm will also promise in the joint announcement with Trump to create 100,000 jobs focused on artificial intelligence and related infrastructure, the sources said.
— John Melloy
Europe stocks open mixed
European stock markets opened mixed on Monday, with the Stoxx 600 index moving between slight losses and gains in early deals.
The index closed 0.77% lower last week, ending a run of three weeks in the green.
— Jenni Reid
Hong Kong leads losses in Asia after key Chinese economic data; other markets mostly down
Asia-Pacific markets were mostly down on Monday, led by Hong Kong's Hang Seng index.
The HSI was down about 1% in its final hour of trade, while the mainland Chinese CSI 300 lost 0.54% after China released economic data that missed expectations.
Other indexes in the region saw smaller losses, with Japan's Nikkei 225 down marginally and South Korea's Kospi shedding 0.22%.
— Lim Hui Jie
Traders expect Fed to cut this week, pause in January
The Federal Reserve is widely expected to cut rates by 0.25 percentage points on Wednesday, but traders will be paying close attention to the updated policy statement and Fed Chair Jerome Powell's press conference for clues about what comes next.
As of Sunday night, pricing in the Fed funds futures market pointed to a 95.3% likelihood of a rate cut this week, according to the CME FedWatch Tool. However, traders are also betting the Fed will pause its rate cutting cycle in January.
That could be a welcome move for investors who are still uneasy with the path of inflation.
Logan Moulton, portfolio manager at Intelligent Wealth Solutions, said inflation appears to be "stickier" than Fed officials previously thought and that there are risks to upward pressure on inflation when the Trump administration takes office.
"Heading into 2025, I think they should at least pause," Moulton said.
— Jesse Pound
Nasdaq Composite up more than 32% year to date
With less than three weeks left in 2024, the three major market averages are on track for a banner year.
The Nasdaq Composite leads the way, with a gain of 32.74% year to date. The S&P 500 has jumped 26.86%, while the Dow is trailing but still up 16.29%.
All 11 sectors are positive for the year, led by a 43.10% gain for communications services.
— Jesse Pound, Christopher Hayes
MicroStrategy, Palantir to join Nasdaq-100
Three new stocks are set to join the Nasdaq-100 one week from Monday.
Palantir Technologies, MicroStrategy and Axon Enterprise will all join the index prior to the market open on Dec. 23, Nasdaq announced Friday. The stocks will also be added to the holdings of the Invesco QQQ Trust, which has more than $300 billion in assets.
Of those three, MicroStrategy is the most volatile. The stock has become a bitcoin proxy for investors as the former enterprise software company has added the cryptocurrency to its balance sheet, financed in part through debt sales.
Illumina, Super Micro Computer and Moderna will all be removed from the index.
— Jesse Pound
Stock futures open little changed
Stock futures were little changed at 6 p.m. ET Sunday, with the contracts for the three major averages marginally lower.
— Jesse Pound
