S&P 500 Flirts With Key Resistance, VIX Drops, Nvidia In Focus: What's Driving Markets Wednesday?

Wall Street is cloaked in green in the session leading up to Thanksgiving, with the S&P 500 index reaching 4,560 points, a level closely watched by analysts, at midday trading in New York.

The S&P 500 is currently testing the downward trendline that connects the highs of January 2022 to the highs of July 2023. All-time highs are less than 6% away from the current levels.

The CBOE Volatility Index, known as VIX, has dropped below the 13 mark, presently assessing the lower bounds of the 2020-2023 range, suggesting an exceptionally low degree of anxiety in the market.

Among tech giants, NVIDIA Corp. NVDA and Tesla Inc. TSLA lost ground, down 2.3% and 3.7%, respectively. The former is introducing a new price discount for its Model Y, while the latter issued a warning about declining sales in China despite reporting strong financial results.

Peer Advanced Micro Devices Inc. AMD saw an almost 4% increase, marking the best performance among S&P 500 stocks. Microsoft Corp. MSFT reached an all-time high of 378.9.

The latest economic data released today paints an improving picture in the mortgage market, lower-than-expected jobless claims, and an upward revision in the University of Michigan Consumer Confidence index for this month. The U.S. dollar index rose by 0.3%, while Treasury yields held steady.

Crude oil prices dropped over 2% as the OPEC+ cartel postponed the meeting scheduled for this Sunday due to disputes over members’ output, leading to the energy sector’s underperformance.

Wednesday’s US Index Performance

• The SPDR S&P 500 ETF Trust SPY was 0.3% higher to $454.77.
• The SPDR Dow Jones Industrial Average ETF DIA rose 0.4% to $352.16. 
• The Invesco QQQ Trust QQQ was 0.5% higher to $390.38.
• The iShares Russell 2000 ETF IWM rose 0.5% to $177.86, according to Benzinga Pro data.

Chart Of The Day: S&P 500 Bulls Face A Key Resistance Test

Sector, Industry ETFs Performance

Tech and communications services led gains among equity sectors, with the Technology Select Sector SPDR Fund XLK and the Communication Services Select Sector SPDR Fund XLC up 0.6% and 0.5%, respectively.

Energy was the laggard, with the Energy Select Sector SPDR Fund XLE falling 0.7%.

Among industries, airlines, as tracked by the U.S. Global Jets ETF JETS, outperformed, up by 1.8%.

Oil services declined the most, with the VanEck Oil Services ETF OIH easing 1%.

Latest Economic Data

• The Mortgage Bankers Association of America (MBA) reported a 20 basis point decrease in the average contract interest rate for 30-year fixed-rate mortgages to 7.41% during the week ending Nov. 17.
• Mortgage applications saw a 3% increase during the same week, marking the third consecutive weekly rise and the most significant jump in two months.
• In October 2023, new orders for durable goods declined sharply by 5.4% month-over-month, reversing a 4.0% surge seen in September and falling well below the expected 3.1% drop.
• For the week ending Nov. 18 the number of unemployment benefits dropped by 24,000 to 209,000, a significant decrease from the previous week’s three-month high and below market expectations of 225,000.
• The University of Michigan’s consumer sentiment index was revised higher to 61.3 in November 2023 from the preliminary reading of 60.4. Inflation expectations for the year ahead exceeded expectations, reaching 4.5%, while expectations for the five-year outlook remained at 3.2%, the highest level since March 2011.
• Crude oil inventories in the US surged by 8.701 million barrels in the week ending November 17, 2023, following a 3.592 million barrel build in the previous period, surpassing market forecasts of a 1.160 million barrel increase, according to the EIA Petroleum Status Report.

Stocks In Focus

• Carnival Corp. CCL rose 3.8% after Citigroup reinstated coverage on the stock with a ‘Buy’ rating, highlighting that pricing and demand continue to show resilience in the face of geopolitical concerns.
• Farm equipment manufacturer Deere & Co. DE slumped nearly 4% after the company issued a soft 2023 outlook expecting a decline in demand.
• Autodesk, Inc. ADSK fell nearly 6%, despite beating Street’s estimates last quarter, as several analysts lowered price targets.

Commodities, Bonds, Other Global Equity Markets And Crypto

The United States Oil Fund, LP USO, which tracks the price performance of light sweet crude oil, fell 2.2%.

Gold, as monitored through the SPDR Gold Trust GLD, eased 0.3% to $1,990/oz. Silver fell 0.4% to $23.63, fueled by the rise in gold prices. Treasury yields were steady, with the 10-year benchmark hovering at a 4.42% yield. The iShares 20+ Year Treasury Bond ETF TLT edged 0.2% higher.

European equity indices inched higher. The SPDR DJ Euro STOXX 50 ETF  FEZ edged 0.1% up.

Bitcoin BTC/USD was 2.5% up to $36,644, while Ethereum ETH/USD rose 5.3% to $2,037.

Shanthi Rexaline contributed to this report.

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