S&P 500 Eyes Sixth Green Session, Tesla Tumbles, Oil At 2-Month High: What's Driving Markets Thursday?

The U.S. stock market is poised for its sixth consecutive day of gains, with investor confidence remaining high due to better-than-expected economic growth and expectations for an inflation slowdown.

In the last quarter of 2023, the U.S. economy grew at a 3.3% annualized pace, significantly above the 2% growth economists expected. Other economic data released Thursday revealed a more mixed picture, with durable goods orders stagnating in December and unemployment claims ticking up more than expected last week.

Market-implied expectations on Fed interest rates remain broadly unchanged, with investors assigning a 56% chance of no change in March, followed by six straight cuts by December.

The dollar gained 0.4%, driven by weaknesses in the euro as the European Central Bank flagged recessionary risks.

Treasury yields were mostly lower by about 4 basis points, bringing gains in the fixed-income space. The iShares 20+ Year Treasury Bond ETF TLT was 0.6% higher.

Oil prices rose 2% on lower-than-expected inventory data and further tensions in the Middle East, with the WTI rising to nearly $77 per barrel, the highest in two months.

Bitcoin remained stuck at the $40,000 level, while gold saw some marginal gains.

Thursday's Performance In U.S. Major Indices, ETFs

The SPDR S&P 500 ETF Trust SPY rose 0.2% to $486.43, the SPDR Dow Jones Industrial Average DIA edged 0.1% higher to $378.41 and the tech-heavy Invesco QQQ Trust QQQ inched 0.1% higher to $426.27, according to Benzinga Pro data.

Sector-wise, the Real Estate Select Sector Fund XLRE outperformed, up 1.2%. The Consumer Discretionary Select Sector Fund XLY underperformed, down 1.6%, impacted by Tesla.

Among industries, airlines dominated, with the U.S. Global JETS ETF JETS up 2.7%.

Thursday’s Stock Movers

• Tesla Inc. tumbled more than 12% after both revenue and earnings missed analyst estimates last quarter. The EV giant is on track for the worst-performing day since September.
• EV-peers Lucid Group Inc. LCID and Rivian Automotive Inc. RIVN fell 7% and 2%, respectively.
• Airline stocks are reacting to quarterly earnings, with American Airlines Group Inc. AAL up 10%, Alaska Air Group Inc. ALK up 5% and Southwest Airlines Company LUV down 0.6%.
• Other companies reacting to earnings include United Rentals Inc. URI (up 13%), International Business Machines Corp. IBM (up over 10%), Las Vegas Sand Corp. LVS (up 0.7%), Comcast Corporation CMCSA (up over 3%),  Humana, Inc. HUM (down over 11%) and  Ameriprise Financial, Inc. AMP (down 0.2%), Nokia Oyj NOK (up 12%), Union Pacific Corporation UNP (down 0.9%), Xerox Holdings Corp. XRX (up 12%), Dow, Inc. DOW (up 2%), Northrop Grumman Corp. NOC (down 5%), Mobileye Global Inc. MBLY (up 1%) and Columbia Banking Systems Inc. COLB (down 22%).

Read now: Tesla Analysts Cut Projections After Q4 Results: Stock ‘Egregiously Overvalued,’ ‘Difficult To Get Optimistic’

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