US stocks reversed early gains as cautious investors weighed new economic data amid Nvidia shares.NVDA) Big AI plans.
Standard & Poor’s 500 Index (^ GSBC) fell about 0.6% while the heavy Nasdaq Composite fell (^ IX) lost approximately 1.4%. Dow Jones Industrial Average (^ DJI) bounced during the mid-morning session but fell about 0.1% by the afternoon.
At the same time, the 10-year Treasury yield rose (^ TNX) added nearly 6 basis points to hover just below 4.7%. Bets on when the Fed will next cut interest rates have also been postponed.
Early Tuesday, the Institute for Supply Management Manufacturing PMI He noted that the manufacturing sector continued to expand last month, although the prices paid index jumped to its highest level in almost two years at 64.4, up from the previous 58.2.
The rise in prices “is a concern for the Fed because it is consistent with PCE superinflation remaining at 3.5% through the middle of next year,” wrote Thomas Ryan, North America economist at Capital Economics.
“This serves as a good reminder that the Fed’s fight against inflation is far from over, especially heading into a year where tariffs and immigration restrictions are set to reignite price pressures.”
In addition, job opportunities in JOLTS It rose more than expected During the month of November. Fewer hires were also made than in the previous month, while the quit rate, a sign of confidence among workers, fell to 1.9% from 2.1% in October.
Data paves the way for The all-important December jobs report is out on Friday. In recent days, Fed officials have done just that They indicated that they would follow a more gradual approach To reductions, given the flexibility in the labor market and ongoing inflation.
Investors are now betting almost certainly that the central bank will keep interest rates unchanged later this month. According to CME FedWatch.
In companies, Nvidia shares reversed gains, falling about 5% after posting a record close. Nvidia CEO Jensen Huang’s keynote at CES revealed on Monday A new super chip powered by artificial intelligence Among other planned products.
Despite Nvidia’s declines, other chip stocks continued to rise, with Micron Technology (in) up about 4% and Asian names make gains.
Meanwhile, the watch is turned around for more clarity Donald Trump’s tariff agenda. The president-elect on Monday denied A Washington Post report That his team Consider more targeted measures – Which would be more promising for global growth.
He lives 8 updates
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Moderna and other vaccine makers are rising after bird flu deaths in the US
Shares of vaccine makers rose Tuesday after that The first death from bird flu in the United States Besides A slight increase in Covid-19 casesAccording to data from the Center for Disease Control.
accident (mRNA) rose approximately 12%. Moderna in July 2024 was Received $176 million from the US government To advance the development of an mRNA H5N1 (bird flu) vaccine, which is in the early stages of testing.
Pfizer (PFE) is also developing an mRNA vaccine against the H5N1 virus. The company’s shares rose a more modest 1.4% midday Tuesday. Its COVID-19 vaccine partner, BioNTech (BNTX), rose by more than 5%.
Meanwhile, German biotechnology company CureVac (CVAC) by 5.9%. CureVac is developing an mRNA vaccine for bird flu in collaboration with Indian pharmaceutical giant GlaxoSmithKline (Glaxo.bo), which rose by just over 1%.
In the midst of the coronavirus surge as well, vaccine manufacturer Novavax…Nafax) increased by more than 10%.
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The dollar rises as investors reevaluate interest rate cuts
US dollar(dx=f, DX-Y.NYB) rose on Tuesday, rebounding after the currency was on its way toward a one-week low The following reports President-elect Donald Trump will not commit to a strict tariff plan.
“The dollar turned to gains today after ISM (54.1) and jobs (8.1 million) strongly beat expectations in December, pushing markets back on their expectations for Fed easing this year to just 33 basis points,” Kyle Chapman wrote. , a foreign exchange market analyst at the Ballinger Group, said in an email.
There are two main points driving the dollar higher. The first is the recovery in labor demand reflected in the strong rise in employment, and the second is the strongest ISM prices paid since February 2023.”
Prices paid in the services sector jumped to their highest levels in almost two years, indicating that the inflation battle is far from over. Following the data release, traders scaled back rate cut bets, putting less than a 50% chance the central bank will cut interest rates before its June meeting. According to CME FedWatch.
“It is certainly too early to call inflation accelerating with this round of data, and markets will receive the bigger clues from non-farm sectors on Friday,” Chapman said. “With the market now firmly biased toward just one rate cut this year, to me there is only room for a pullback in the Fed’s overly hawkish repricing path.”
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Trump announces $20 billion in foreign investment to build new data centers
President-elect Donald Trump announced billions of dollars in new foreign investment to build new data centers across the United States as interest and exploration of artificial intelligence intensifies.
Trump revealed on Tuesday that Damac Group, based in Dubai and backed by billionaire developer Hussain Sajwani, will invest $20 billion in the construction process.
“They feel so strongly about the country that they want people to know about it,” the president-elect said during a press conference at Mar-a-Lago. “It is an honor to have such a great investor.”
Trump said the investment will be used to create “huge new data centers” across the Midwest and Sunbelt regions “and keep America at the forefront of technology and artificial intelligence.”
The first phase of the project will begin in a number of states, including Texas, Arizona, Oklahoma, Michigan, Indiana, and others.
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Latest services data shows inflation fight ‘far from over’
Prices paid in the services sector rose during December, raising concern On the road ahead for inflation.
Data from the Institute for Supply Management The prices paid index jumped to a reading of 64.4 in December, up from 58.2 the previous month, it showed. Overall, activity in the sector also rose with the ISM Services Index rising to 54.1 in December from 53.5 in November.
“The rise in the prices paid index to a nearly two-year high of 64.4, from 58.2, is a concern for the Fed because it is consistent with PCE superinflation remaining at 3.5% through the middle of next year,” Capital Economics North said. US economist Thomas Ryan wrote in a note to clients on Tuesday. “This serves as a good reminder that the Fed’s fight against inflation is far from over, especially heading into a year where tariffs and immigration restrictions are set to reignite price pressures.”
10-year Treasury bond yield (^ TNX) rose quickly after the release, adding nearly 7 basis points to hover just under 4.7%. Bets on when the Fed will next cut interest rates have also been postponed.
Traders now see there is less than a 50% chance the Fed will cut interest rates before the central bank’s June meeting. According to CME FedWatch. Yesterday, traders saw a roughly 55% chance that the Fed would cut interest rates by at least 25 basis points by the end of its May meeting.
Markets sold off as interest rates rose. Nasdaq Composite (^ IX), which opened the day in the green, was down about 1%. At the same time, the S&P 500 rose (^ GSBCWhich was also positive earlier in the session, fell by about 0.4%.
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Job openings increased more than expected in November
Job openings rose more than expected in November as investors continued to analyze the pace of the labor market slowdown amid questions about how far the Federal Reserve will continue to cut interest rates this year.
New data from the Bureau of Labor Statistics A report released Tuesday showed that 8.1 million jobs were open at the end of November, up from 7.84 million in October.
The October number was revised upward from the 7.74 million open jobs initially reported. Economists polled by Bloomberg had expected Tuesday’s report to show 7.74 million job openings in November
The Job Opportunities and Labor Turnover Survey (JOLTS) also showed that 5.27 million were hired during the month, down from 5.39 million hired during October. The employment rate fell to 3.3% from 3.4% in October. Also in Tuesday’s report, the quit rate, a sign of confidence among workers, fell to 1.9% from 2.1% in October. The total number of departures fell to 3.07 million from 3.28 million in October.
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Stocks open higher
US stocks rose on Tuesday, with Nvidia shares rising.NVDA) once again Raising market sentiment.
Standard & Poor’s 500 Index (^ GSBC) rose 0.3%, holding near tech Gains from the previous cycle. Dow Jones Industrial Average (^ DJI) also rose by 0.3%, while shares of the Nasdaq Composite Index, which is dominated by technology companies (^ IX) added about 0.2%.
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Nvidia soars after CEO unveils super-chip AI and robotics technology at CES
nvidia (NVDA) The stock rose as much as 2.5% in pre-market trading following CEO Jensen Huang’s keynote at the technology industry’s annual CES trade show in Las Vegas late Monday.
Huang’s presentation A wave of updates About Nvidia’s upcoming products previews what’s next in the booming market for artificial intelligence and other emerging technologies.
Nvidia shares It closed at a record high of $149.43 on Monday before Hwang’s keynote – surpassing its previous record close of $148.88 reached on November 7.
Read more here.
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