It was a low-key start to the week for stocks. But while today's price action was muted, there is plenty of activity occurring later this week that could spark big moves for stocks.
The main indexes chopped between positive and negative territory throughout the session. At the close, the Nasdaq Composite was down 0.07% at 14,241, the S&P 500 was off 0.2% at 4,550, and the Dow Jones Industrial Average was 0.2% lower at 35,333.
Today's price action "suggests a market that is digesting four weeks of gains and focused on a week of important Fedspeak and a host of key economic data, particularly the release of the Personal Consumption Expenditures Price (PCE) index, which could have an important impact on interest rates," says Quincy Krosby, chief global strategist for LPL Financial.
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Fed's favorite inflation data will be released Thursday
The PCE index is the Fed's preferred measure of inflation and the October data will be released Thursday morning. Market participants are especially keen to see the results of this report, especially in the wake of the October Consumer Price Index (CPI) and Producer Price Index (PPI), which showed inflation is easing.
That data has helped fuel a major rally in stocks this month as the "market appears to have embraced the idea that slowing economic data will hasten the arrival of market-friendly rate cuts, even though the Fed has continued to telegraph otherwise," says Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley.
Indeed, futures traders are pricing in a 42% chance of a quarter-point rate cut in May, according to CME Group. However, the Fed's most recent dot plot indicated that most members support higher-for-longer interest rates.
Wall Street will watch for more hints on interest rates when Fed Chair Jerome Powell speaks Friday morning. "If he dishes out dovish comments, investors may finish the week by enthusiastically stocking up on equities and bonds," says José Torres, senior economist at Interactive Brokers. However, Powell runs the risk of disappointing investors if he keeps the door open for more rate hikes," Torres adds.
Shopify stock sizzles on "epic" Black Friday sales
Higher prices didn't keep consumers from spending big this Black Friday. According to Adobe Analytics, online shoppers spent a record-high $9.8 billion, up 7.5% year-over-year, on the biggest shopping day of the year. Adobe expects another $12 billion in online sales will happen on Cyber Monday (which is today).
One beneficiary of these booming online sales is e-commerce merchant platform Shopify (SHOP). The company said its merchants saw a combined $4.1 billion in global Black Friday sales, up 22% year-over-year. "Another epic, record-breaking Black Friday in the books for Shopify merchants," said Harley Finkelstein, president of Shopify, in a press release. "The world showed up for our merchants, and the excitement is only building, with Cyber Monday still to come."
Shares of Shopify jumped 4.9% Monday, but then SHOP investors are used to this sort of action by now. The growth stock is up more than 112% in 2023 and is now trading at its highest level since March 2022. E-commerce stocks Amazon.com (AMZN, +0.7%) and MercadoLibre (MELI, +4.2%) also enjoyed notable gains today.
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