S&P 500, Nasdaq Slip As Tech Underperforms, Oil Reacts to OPEC+: What's Driving Markets Thursday?

Thursday’s trading session on Wall Street presents a mixed picture, characterized by notable fluctuations in major indices. While tech-heavy benchmarks like the S&P 500 and the Nasdaq 100 are experiencing declines, blue-chip stocks and small caps are treading the path of marginal gains.

The market mood remains somewhat subdued in the wake of the Federal Reserve’s favored measure of inflation delivering a relatively uneventful report.

The annual Personal Consumption Expenditures (PCE) inflation rate in the United States has eased to 3% in October 2023, aligning with analysts’ expectations and reaching levels not observed since March 2021. This marks a decline from the previous September’s figure of 3.4%. Monthly, the PCE remained stagnant, coming in below the expected 0.1%.

WTI crude oil prices experienced a highly volatile session, dropping to as low as $75 per barrel before recovering to $76.9 at the time of this writing. While the OPEC+ cartel collectively agreed to implement an additional 1 million barrel-a-day reduction in oil output, the details of individual member cuts are yet to be disclosed. Meanwhile, Brazil is set to become a member of the OPEC+ group starting from January 2024.

Treasury yields saw an increase, and bond prices moved lower. The iShares 20+ Year Treasury Bond ETF TLT fell 0.8%. The dollar surged 0.6%, aided by weaker-than-expected inflation in the euro area, rekindling speculations of ECB rate cuts next year.

Performance Of US Stock Indices Thursday

• The SPDR S&P 500 ETF Trust SPY edged 0.1% down to $454.28.
• The SPDR Dow Jones Industrial Average ETF DIA rose 0.8% to $357.37. 
• The Invesco QQQ Trust QQQ fell 0.68% to $387.12.
• The iShares Russell 2000 ETF IWM rose 0.3% to $179.95, according to Benzinga Pro data.

Chart Of The Day: OPEC+ Fails To Boost Oil Prices

Sector, Industry ETF Performance

Sector-wise, financials and healthcare rose the most, with the Financial Select Sector SPDR Fund XLF and the Health Care Select Sector SPDR Fund XLV, up 0.6% and 0.7%, respectively.

Growth-linked sectors such as the Communication Services Select Sector SPDR Fund XLC, the Technology Select Sector SPDR Fund XLK and the Consumer Discretionary Select Sector SPDR Fund XLY were the underperformers, down 1.2%, 0.4% and 0.5%, respectively.

Industry-wise, gains were concentrated in biotech companies, with the SPDR S&P Biotech ETF XBI up 2.5%

Semiconductors were the main laggard, with the VanEck Semiconductor ETF SMH down 1.7%.

4,200 Points For S&P 500 Index

Among the major investment firms that have released their outlooks for the U.S. stock market in 2024, JPMorgan Chase & Co. stands out with a bearish stance. The firm’s analysts forecast a price target of 4,200 points for the S&P 500 index, implying an 8% decline from current prices.

JPMorgan’s view is rooted in valuations deemed excessively high relative to fundamentals and a pessimistic outlook on the earnings trend of American companies.

Read Also: Chilling 2024 S&P 500 Outlook: Why JPMorgan Analysts Project Nightmare Scenario For Stocks

Stocks In Focus

• Stocks reacting to earnings include Okta, Inc. OKTA (down over 4%), PVH Corp. PVH (up over 7%), Salesforce, Inc. CRM (up over 6%), Snowflake Inc. SNOW (up over 5%), Zuora, Inc. ZUO (up nearly 9%), The Kroger Co. KR (up over 2%) and Victoria’s Secret & Co. VSCO (up over 16%).
• Ford Motor Co. F fell over 3%, as company announced a weaker profit guidance due to UAW strikes.
• Hewlett Packard Enterprise HPE rose nearly 2% after announcing on Thursday that it has broadened its partnership with chipmaker Nvidia Corp. NVDA to develop an enterprise computing solution tailored for generative artificial intelligence. The semiconductor giant fell 3.2%.
• Those reporting after the market close include Ambarella, Inc. AMBA, Dell Technologies Inc. DELL, PagerDuty, Inc. PD, Ulta Beauty, Inc. ULTA, UiPath Inc. PATH and Zumiez Inc. ZUMZ.

Commodities, Other Global Equity Markets And Crypto

The United States Oil Fund, LP USO, which tracks the performance of light sweet crude, was 1.5% lower.

Gold, as monitored through the SPDR Gold Trust GLD, inched 0.3% lower to $2,037/oz. Silver edged 0.9% higher to $25.23.

European equity indices inched higher, aided by larger speculative bets on ECB rate cuts in 2024. However, the currency-unhedged SPDR DJ Euro STOXX 50 ETF FEZ fell 0.4% as the dollar strengthened 0.6% against the euro.

Bitcoin BTC/USD was 0.3% lower to $37,737, while Ethereum ETH/USD rose 0.5% to $2,039.

Shanthi Rexaline contributed to this report.

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