The S&P 500 closed flat, while the Nasdaq Composite edged up 0.1% and the Dow Jones Industrial Average dipped 0.2%. The Russell 2000 underperformed with a 0.6% decline. The S&P 500 and Nasdaq Composite initially rose, fueled by strong earnings and guidance from Broadcom (AVGO, Financial), which surged 24.4% to $224.80, lifting sentiment in the semiconductor sector.
Rising market rates limited broader equity market gains. The 10-year yield increased eight basis points to 4.40%, and the 2-year yield rose five basis points to 4.24%, ahead of next week’s expected rate cut. Compared to last Friday, the 10-year yield is up 25 basis points, and the 2-year yield is up 14 basis points.
This yield movement followed disappointing inflation data, including weaker-than-expected November CPI and PPI reports, and indications of a softening labor market.
In the semiconductor sector, despite a generally sluggish session, some key players like NVIDIA (NVDA, Financial) saw reversals. NVIDIA initially gained 1.6% but closed down 2.8% at $134.25. Nonetheless, the PHLX Semiconductor Index (SOX) still posted a 3.4% gain.
In the energy sector, WTI crude oil futures increased 1.7% to $71.29 per barrel. The International Energy Agency (IEA) projected a rise in global oil demand growth from 840,000 barrels per day in 2024 to 1.1 million barrels per day in 2025. Oil prices have struggled to stay above $70 per barrel since September.
- Nasdaq Composite: +32.7% YTD
- S&P 500: +26.9% YTD
- S&P Midcap 400: +17.8% YTD
- Russell 2000: +15.8% YTD
- Dow Jones Industrial Average: +16.3% YTD
Today’s economic data highlights:
- November Export Prices unchanged; prior revised to 1.0% from 0.8%
- November Export Prices ex-agriculture up 0.1%; prior revised to 0.8% from 0.6%
- November Import Prices up 0.1%; prior revised to 0.1% from 0.3%
- November Import Prices ex-oil unchanged; prior 0.2%
Looking ahead, Monday’s economic calendar includes the December Empire State Manufacturing Survey (prior 31.2) at 8:30 ET, followed by flash December S&P Global U.S. Manufacturing PMI (prior 49.7) and flash December S&P Global U.S. Services PMI (prior 56.1) at 9:45 ET.
Today’s News
Google (GOOG, Financial) and Microsoft (MSFT, Financial) might soon be designated as global gatekeepers for artificial intelligence technology by the U.S. Department of Commerce. This initiative would allow these cloud providers to offer high-end AI chips to global clients while restricting access to certain countries. This move is part of the “Artificial Intelligence Diffusion” rule, which is currently under review and could be published soon. Nvidia (NVDA, Financial) and AMD (AMD, Financial) are also mentioned as companies that may compete for licenses to import limited AI chips.
Super Micro Computer (SMCI, Financial) is reportedly engaging with Evercore to raise capital through a potential private investment in public equity. The company is exploring interest from private equity firms and has been granted an extension by Nasdaq to file its required reports, maintaining its listing on the stock exchange until February 2025.
Bill Ackman (Trades, Portfolio), a renowned hedge fund manager, announced his short and long positions for a stock-picking contest. He chose Icahn Enterprises (IEP, Financial) as his short position, which has dropped 34%, and Fannie Mae (FNMA, Financial) as his long position, which surged 83%. Ackman clarified that his firm, Pershing Square, does not engage in short selling.
Quantum computing stocks, including Rigetti Computing (RGTI, Financial), D-Wave Quantum (QBTS, Financial), Quantum Computing (QUBT, Financial), and IONQ (IONQ, Financial), saw significant gains following Google’s announcement of its new quantum chip, Willow. This development has spurred increased interest in these stocks, with Rigetti leading the charge with a 13% rise.
Tesla (TSLA, Financial) shares reached a new high amid reports that the Trump transition team plans to eliminate a requirement for automakers to report crashes involving self-driving systems. Tesla has reported the most crashes under this mandate, which has been criticized by the Alliance for Automotive Innovation, representing major automakers like General Motors (GM, Financial) and Toyota (TM, Financial).
Lamb Weston (LW, Financial) rose 5% following reports of a potential acquisition by Post Holdings (POST, Financial), which dropped 4%. Post is exploring synergies with Lamb Weston, having previously considered a merger in 2016. This potential deal comes as Lamb Weston faces pressure from activist investor Jana Partners (Trades, Portfolio).
Broadcom (AVGO, Financial) experienced a significant surge, with shares rising 19% after announcing a revenue target of $90 billion from custom AI chips by 2027. This optimistic guidance also boosted other semiconductor stocks, including Marvell Technology (MRVL), Nvidia (NVDA, Financial), and AMD (AMD, Financial).
Sycamore Partners is reportedly preparing a $10 billion takeover bid for Walgreens Boots (WBA), which saw a 3.6% rise. The private equity firm is coordinating with major banks for debt funding, and the deal could involve selling parts of Walgreens’ business, such as the Boots UK chain.