Traders work at the New York Stock Exchange on Dec. 17, 2024.
NYSE
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Dow drops for the ninth day
On Tuesday, the Dow Jones Industrial Average lost 0.61%, marking a nine-day losing streak. The S&P 500 slipped 0.39% and Nasdaq Composite retreated 0.32%. Europe’s regional Stoxx 600 index dropped 0.42%, weighed down by a 1.4% decline in banking stocks. Europe’s tech stocks, however, managed to defy the slump to add 0.61%.
What to expect from Fed
The U.S. Federal Reserve concludes its two-day rate-setting meeting later this Wednesday. Despite sticky inflation and a resilient labor market, the Fed is widely expected to lower rates by 25 basis points. But a CNBC survey of 27 respondents, comprising economists, strategists and fund managers, showed that only 63% think it’s the right move for the Fed.
Nvidia and Broadcom fall in tandem
Nvidia shares fell 1.2% on Tuesday, finding itself deeper in correction territory, typically understood as a 10% (or more) slump from an all-time high close. Broadcom’s rally also lost steam, with its shares shedding 3.9%.
Automakers, combine
Japanese automakers Nissan Motor and Honda Motor are considering a merger, according to a Tuesday report by The Nikkei. Both companies are also planning to bring Mitsubishi Motors — in which Nissan owns 24%, making it the top shareholder — under the holding company eventually. Both Honda and Nissan neither confirmed nor denied the report.
[PRO] Santa Rally, hurry to the market tonight
The Santa Rally is a phenomenon in which stock prices rise on the last five trading days of the year and the first two in January. Once the Fed meeting concludes today — and barring any unwelcome surprise — markets are poised to welcome Santa Claus and ring in the holidays, said Bank of America.
The bottom line
In February 1978, the Bee Gees’ song “Stayin’ Alive” was the top Billboard song of the month. It was also the anthem for the Dow Jones Industrial Average, which was struggling with nine straight days of losses.
Almost fifty years ahead, the Dow is mired in nine-day losing streak again. To take another cue from the Billboards chart, all investors want for Christmas is the Dow to stop bleeding red.
That said, it’s not a major wound for the 30-stock index, despite the scary numbers.
The heaviest drag on the Dow is UnitedHealth, which has contributed to more than half of the index’s decline over the past eight sessions, noted CNBC’s Yun Li. The health insurance company was rocked by a fatal shooting of its CEO Brian Thompson as well as a broader sell-off in the industry.
Outside the Dow, the stock market is still cheery. Despite the S&P and the Nasdaq also slipping in their last trading session, both indexes are hovering near their record closes. This suggests that it’s mostly the Dow constituents — “old-economy” stocks like industrials, financials and consumer discretionary — that are flailing.
“Wall Street is waking up to the fact that a Trump presidency might not be as great for stocks as some people hoped,” said David Russell, global head of market strategy at TradeStation. “Financials and industrials jumped on his win but now may have to face higher rates and trade uncertainties, and healthcare faces its greatest political risks in recent memory.”
Moreover, the losses for the Dow might be consecutive, but the incline isn’t that steep. The index is just 3.6% off its record high, and its 50-day moving average is still trending upward.
Though it’s not as if the stock market is giving investors money for nothing, we still aren’t quite in dire straits.
— CNBC’s Yun Li, Michelle Fox, Fred Imbert, Alex Harring, Adrian van Hauwermeiren, Brian Evans and Samantha Subin contributed to this report.