Joey Solitro
The main equity indexes struggled for direction throughout the session before closing in the red, as market participants awaited tomorrow's inflation report and its implication for interest rates.
The Nasdaq Composite notched another new intraday high, and the S&P 500 was up early too, but they joined the Dow Jones Industrial Average in a day-long drift as investors anticipated the release of Consumer Price Index data for November.
The Bureau of Labor Statistics will release November CPI data tomorrow at 8:30 am Eastern time. According to a consensus compiled by FactSet, the median estimate for year-over-year CPI is 2.7%. October CPI was 2.6%, consistent with the median estimate.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Annual CPI has exceeded the median estimate in five of the past 12 months while meeting it in three months and falling short of it in four months. "If 2.7% is the actual year-over-year increase in the CPI, it will mark the second consecutive month the number has increased," writes John Butters, senior earnings analyst at FactSet. Butters also notes that the trailing 12-month average for annual CPI is 3.0%.
"Stubborn inflation in services ex-housing has been a stumbling block for the Fed," observes BMO Capital Markets Chief U.S. Economist Scott Anderson. "Core inflation (excluding food and energy) is forecast at 0.3% in November, in line with recent firm readings and somewhat above the level the Fed would like to see." Anderson adds that annual core inflation is forecast at "an elevated 3.3%."
According to the CME Group's FedWatch Tool, there is an 86.1% probability the FOMC will cut the federal funds target rate by 25 basis points, or 0.25%, after it meets next week. As of Tuesday's closing bell, the market is pricing in a 69.1% probability the FOMC pauses its rate-cutting process following its first meeting of 2025.
The Nasdaq Composite settled 0.25% lower at 19,687, while the S&P 500 edged down 0.30% to 6,034 and the Dow Jones Industrial Average lost 0.35% to 44,247.
Is GOOGL the first serious quantum stock?
Alphabet (GOOGL) stock surged more than 6% in the first 30 minutes of trading and closed up 5.6% on Tuesday, extending an already impressive rally in the second half of 2024.
In a post on X shortly after noon Eastern time on Monday, CEO Sundar Pichai introduced Alphabet's quantum computing chip, Willow. According to Pichai, Willow "solved a standard computation in less than five minutes that would take a leading supercomputer over 10^25 years, far beyond the age of the universe(!)."
Of greater significance from an efficacy perspective – Pichai says this even before he cites the speed record – is that Alphabet's "state-of-the art quantum computing chip" includes "a breakthrough that can reduce errors exponentially as we scale up using more qubits."
GOOGL has lagged most of its Magnificent 7 peers this year but has made up significant ground since plumbing a near-term intraday low of $147.22 on September 9, rising 25.8% from that level.
Its progress on quantum computing is one factor. Another, as Wedbush analyst Dan Ives notes, is the prospect of lighter regulation of Big Tech under a second Trump administration. "The Street views the breakup and antitrust risk as more diminished," Ives tells Al Root of Barron's.
Ives cites the end of Lina Kahn's term as chair of the Federal Trade Commission in September and the likelihood that President-elect Donald Trump will nominate a friendlier personality to lead the FTC. That's positive for Big Tech generally.
And it seems to be giving GOOGL a particular boost, even as other segments of Alphabet's business, including the iconic Google search engine, face increasing pressures.
Of the 62 analysts who cover the stock, 51 rate GOOGL at either Buy or Outperform. The average 12-month price target, as calculated by S&P Global Market Intelligence, is $209.85, giving shares 14% implied upside from Tuesday's closing price.
Stocks on the move
It is a market of stocks, after all, and these names were particularly active on Tuesday even though the broader equity indexes seemed to tread water.
Oracle (ORCL) stock fell 6.7% after the cloud infrastructure company missed top- and bottom-line expectations for its fiscal 2025 second quarter. Management's third-quarter outlook also came up short of estimates.
MongoDB (MDB) stock sank 16.9% after the document database provider beat top- and bottom-line expectations for its fiscal 2025 third quarter and raised its full-year outlook. At the same time, the company announced the departure of its chief operating officer and CFO Michael Gordon.
eBay (EBAY) declined 2.9% after Jefferies downgraded the e-commerce giant stock to Underperform (equivalent to a Sell) from Hold and lowered its price target to $52 from $60, citing a deceleration in advertising revenue and a recent slowdown in China.
Related content
- If You'd Put $1,000 Into Adobe Stock 20 Years Ago, Here's What You'd Have Today
- 7 Best Stocks to Gift Your Grandchildren
- The Fed Could Cut Rates Again. What Should Savers Do About CDs and High-Yield Accounts?
-
Stock Market Today: Stocks Stable as Inflation, Tariff Fears EbbConstructive trade war talks and improving consumer expectations are a healthy combination for financial markets.
-
What Trump’s 'Big Beautiful Bill' Means for Your Utility BillsIf passed, the 'Big Beautiful Bill' could make home energy upgrades more expensive and raise monthly costs. Here's how much more you might pay and how to prepare.
-
Stock Market Today: Stocks Stable as Inflation, Tariff Fears Ebb
Constructive trade war talks and improving consumer expectations are a healthy combination for financial markets.
-
Eight Estate Planning Steps to Protect Your Loved Ones (and Your Legacy)Two-thirds of Americans don't have an estate plan. If you're one of them, these are the essential steps to take now to prevent problems for your family later.
-
The Six Pros This Adviser Says You Need to Sell Your BusinessSelling your business isn't as simple as getting the best price and walking away. These are the six professionals you'll need to get a deal across the finish line.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build WealthConsistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key PiecesIf retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
After the Disaster: An Expert's Guide to Deciding Whether to Rebuild or RelocateHomeowners hit by disaster must weigh the emotional desire to rebuild against the financial realities of insurance coverage, unexpected costs and future risk.
-
A Financial Expert's Tips for Lending Money to Family and FriendsWhat starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.
