Stock Market Update

[BRIEFING.COM] The S&P 500 and Nasdaq Composite were unable to follow up Friday's record highs with new record highs today. They opened the day lower and never managed to reclaim a posture in positive territory as buyers lacked enthusiasm ahead of several key events this week, including Oracle's (ORCL 190.71, -0.98, -0.5%) earnings report after the close, the November Consumer Price Index on Wednesday, the November Producer Price Index on Thursday, and the ECB policy meeting on Thursday.

Beyond those considerations, buyers were stifled today by a weak showing from NVIDIA (NVDA 138.81, -3.63, -2.6%), which fell on a Bloomberg report of China opening an antimonopoly investigation, and festering valuation concerns that also mixed with chatter of the market being overbought on a short-term basis and due for some consolidation.

Today's retreat was orderly and narrow at first, but it eventually cut across the market. Small-cap stocks and mid-cap stocks had a stronger start to the session. The Russell 2000 was up as much as 0.8% and the S&P Midcap 400 Index was up as much as 0.5% before both gave in to selling interest and closed down 0.7% and 0.5%, respectively.

Shortly after the open, advancers led decliners at the NYSE and Nasdaq by a better than 2-to-1 margin, but by the close decliners held an edge over advancers at both the NYSE and Nasdaq.

There wasn't a news catalyst for the shift in the tape. It simply turned as buyers turned to the sidelines. Buyers didn't abandon the market altogether, though. There was some clear-cut strength in Chinese ADRs and related ETFs after Chinese leaders said fiscal stimulus will be more proactive and monetary policy "moderately loose," as opposed to "prudent," in 2025. The iShares China Large-Cap ETF (FXI) surged 9.5%.

Separately, there were some nice-sized gains in story stocks like Interpublic Group (IPG 30.30, +1.03, +3.6%), which is going to be acquired by Omnicom (OMC 92.82, -10.60, -10.3%) in a stock-swap deal, and in Hershey (HSY 193.65, +18.95, +10.9%), which has garnered takeover interest from Mondelez Intl. (MDLZ 61.44, -1.42, -2.3%), according to Bloomberg.

Hershey was the best-performing stock in the S&P 500 and Omnicom was the worst-performing stock.

Comcast (CMCSA 39.05, -4.10, -9.5%) was nipping at the heels of Omnicom for worst-performing stock after warning that the impact of Hurricanes Helene and Milton will result in a little over 100,000 broadband subscriber losses in the fourth quarter. That view, Omnicom's losses, and weakness in Meta Platforms (META 613.57, -10.20, -1.6%) cast a pall on the communication services sector (-1.3%), which joined the financial (-1.4%) and utilities (-1.3%) sectors as today's weakest areas.

The health care (+0.2%) and real estate (+0.1%) sectors were the only two S&P 500 sectors to eke out a gain in a day of attrition for the stock market.

The Treasury market also saw some losses today that resulted in higher yields. The 2-yr note yield settled the session up three basis points at 4.13% and the 10-yr note yield settled the session up five basis points at 4.20%. Those moves followed President-elect Trump's weekend "Meet the Press" interview in which, among other things, he reiterated his aim to extend the tax cuts, levy tariffs as needed, and deport illegal immigrants.

In related news, the New York Fed's November Survey of Consumer Expectations showed a 0.1 percentage point increase in inflation expectations for the year ahead (to 3.0%), three years ahead (to 2.6%), and five years ahead (to 2.9%).

• Nasdaq Composite: +31.5% YTD
• S&P 500: +26.9% YTD
• S&P Midcap 400: +19.2% YTD
• Russell 2000: +18.0% YTD
• Dow Jones Industrial Average: +17.9% YTD

Reviewing today's economic data:

• October Wholesale Inventories increased 0.2% month-over-month (Briefing.com consensus 0.2%) following a 0.2% decline in September.

Looking ahead, Tuesday's economic calendar includes:

• 06:00 ET: November NFIB Small Business Optimism Index (prior 93.7)
• 08:30 ET: Revised Q3 Productivity (Briefing.com consensus 2.2%; prior 2.2%) and Unit Labor Costs (Briefing.com consensus 1.9%; prior 1.9%)