Stocks End Lower Again Despite Yields Falling
Schwab Market Update Audio
Deep Dive
Why did stocks end lower despite falling yields?
Stocks ended lower due to profit-taking and concerns about future rate cuts, sticky inflation, and policies from the incoming Trump administration. These factors unsettled markets, even as Treasury yields fell, which typically supports equities.
What was the performance of the S&P 500 in December compared to November?
The S&P 500 started December 31st more than 100 points and nearly 2% below its November close, marking its second monthly decline in three months, a trend not seen since late 2023.
What were the key factors driving the recent softness in Wall Street?
The Federal Reserve's caution about future rate cuts amid sticky inflation, a fast-growing U.S. economy, and worries about tariffs and policies from the incoming Trump administration contributed to market softness.
What was the significance of the November pending home sales data?
November pending home sales rose 2.2% month-over-month, significantly higher than the expected 0.7% increase, indicating strong housing market activity despite mortgage rates staying above 7%.
What does the Chicago Purchasing Managers Index indicate about the economy?
The Chicago Purchasing Managers Index fell to 36.9 in December from 40.2 in November, signaling contraction in the manufacturing sector as readings below 50 denote economic contraction.
What are the expectations for Tesla's quarterly deliveries?
Wall Street analysts expect Tesla to report 510,000 deliveries for the quarter, which would be the highest in the company's history.
Why are investors concerned about the debt ceiling?
Investors are worried because Treasury Secretary Janet Yellen warned that Congress is running out of time to extend the debt ceiling, which will be hit in mid-January. Failure to address this could raise concerns about a possible U.S. default.
What is the current outlook for Federal Reserve rate cuts in 2025?
The CME FedWatch tool indicates high odds of just two rate cuts in 2025, down from four previously, with a 50-50 chance of at least one cut in the first quarter.
How did major indices perform on Monday, December 30th?
The S&P 500 fell 1.07% to 5,906.94, the Dow Jones Industrial Average lost 0.97% to 42,573.73, and the Nasdaq Composite dropped 1.19% to 19,486.78.
What sectors were the worst performers on Monday?
Materials, consumer discretionary, and healthcare were the bottom three sectors, with tech and communications services also experiencing tough days.
- Market fireworks absent in a late-season sell-off
- Santa Claus rally has been a no-show
- S&P 500 index is below November's levels
- Concerns about tariffs and policies of the incoming Trump administration
Shownotes Transcript