Stock Market Today: Nike Earnings Light Fire Under Stocks

Stocks jumped out of the gate and never looked back as investors cheered an encouraging reading on consumer confidence. Solid earnings from logistics giant FedEx (FDX (opens in new tab)) and athletic footwear and apparel retailer Nike (NKE (opens in new tab)) only added to the day's positive momentum, with both stocks surging in reaction to their quarterly results. It was the good news Wall Street was looking for, and sent the major market indexes notably higher. 

Starting with the economic data, the Conference Board said this morning that consumer confidence surged to 108.3 in December from November's reading of 101.4. This was the first increase in consumer confidence since September, and the highest reading since April. "The economy is still headed towards a recession, but the consumer continues to show signs of resilience which could delay a significant tumble for equities," says Edward Moya, senior market strategist at currency data provider OANDA (opens in new tab).

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Meanwhile, in earnings news, FedEx stock rose 3.4% after the company reported higher-than-expected fiscal second-quarter earnings and said it will cut costs by an additional $1 billion this fiscal year, bringing total savings to $3.7 billion. Additionally, Nike soared 12.3% – easily making it the best Dow Jones stock today – after the firm beat top- and bottom-line estimates and said inventories were down compared to the previous quarter.

As for the major indexes, the Dow Jones Industrial Average rose 1.6% to 33,376, the S&P 500 Index gained 1.5% to 3,878, and the Nasdaq Composite jumped 1.5% to 10,709.

Be Prepared for This Bear Market to Continue

Today's broad gains were promising, but let's not forget that the stock market remains in bear-market territory. Plus, many strategists expect the bear market to continue well into 2023. 

"The Federal Reserve remains committed to taming inflation by keeping monetary policy tight, as Jerome Powell emphasized in his press conference, which is not great news for the stock market and supports the bear market continuing into 2023," says James Demmert, chief investment officer of Main Street Research (opens in new tab). "The Fed is trying to engineer a soft economic landing that in our view has a high likelihood of failing and causing a recession in 2023."

As a result, the major market indexes "are vulnerable at current levels," Demmert adds. 

Given this precarious market backdrop, investors would do well to focus on sectors that historically perform well in market downturns, like healthcare or consumer staples. Another option is to embrace the best bear market ETFs, or funds that cover a variety of strategies that tend to work well in uncertain times.