US Stock Indexes: A Mixed Bag on Thursday, 12/12/2024

US stock indexes experienced a mixed performance on Thursday, December 12, 2024, as investors digested the latest inflation data and awaited the Federal Reserve's policy decision. The S&P 500 and Dow Jones Industrial Average (DJIA) closed lower, while the Nasdaq Composite and Russell 2000 index of smaller companies rose. The market's reaction to inflation data and expectations for Fed policy influenced the performance of various sectors and individual stocks.

The S&P 500 fell 0.8% to 6,084.19, while the DJIA dropped 0.2% to 44,148.56. The Nasdaq Composite, however, rose 1.8% to 20,034.89, driven by gains in tech stocks. The Russell 2000 index of smaller companies also rose 0.5% to 2,394.16. The market's performance was influenced by the release of the Consumer Price Index (CPI), which showed a 0.3% increase in November, in line with expectations. Investors are now awaiting the Fed's policy decision on December 17-18, with expectations for another interest rate cut.

U.S. stock indexes fell on Thursday, with the S&P 500 down 0.8%, the Dow Jones Industrial Average down 0.2%, and the Nasdaq Composite down 1.8%. The Russell 2000 index of smaller companies rose 0.5%. Tech stocks led the decline, with the Nasdaq down 1.8% to top the 20,000 level for the first time. Oracle dragged on the market after reporting weaker growth than analysts expected. Treasury yields rose in the bond market ahead of Wednesday's inflation report, which will be among the final big pieces of data before the Federal Reserve's meeting on interest rates next week.

The market's reaction to the inflation data contrasts with previous updates, where the market often rallied on signs of easing inflation. The trend suggests that investors are now more focused on the potential impact of higher interest rates on corporate earnings and economic growth. The decline was broad-based, with all 11 sectors in the S&P 500 finishing lower. However, energy stocks were the least affected, with the Energy Select Sector SPDR Fund (XLE) falling only 0.1%. This could be attributed to the sector's under-ownership and potential for growth in an inflationary environment. On the other hand, tech stocks were the most sensitive to the inflation data and Fed policy implications, with the Technology Select Sector SPDR Fund (XLK) falling 1.5%. This could be due to the sector's sensitivity to interest rates and the potential impact of higher rates on growth prospects.

In conclusion, the US stock indexes experienced a mixed performance on Thursday, December 12, 2024, as investors digested the latest inflation data and awaited the Federal Reserve's policy decision. The market's reaction to inflation data and expectations for Fed policy influenced the performance of various sectors and individual stocks. The decline was broad-based, with all 11 sectors in the S&P 500 finishing lower. However, energy stocks were the least affected, while tech stocks were the most sensitive to the inflation data and Fed policy implications. Investors should remain vigilant and adapt their portfolios accordingly to navigate the current market dynamics.