Stock Market Today: Stocks Struggle After Mixed Fed Messages

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published 28 November 2023

Stocks were choppy Tuesday as investors took in mixed messages from several Federal Reserve officials and an encouraging reading on consumer sentiment.

One of the more hawkish central bankers to speak Tuesday was Federal Reserve Governor Michelle Bowman. In prepared remarks for a speech at a Utah bankers gathering, Bowman said she thinks the Fed "will need to increase the federal funds rate further to keep policy sufficiently restrictive to bring inflation down to our 2% target in a timely way."

Striking a more dovish tone was Fed Governor Christopher Waller, who said earlier at a moderated discussion in Washington D.C. that he is "encouraged" by recent data that showed "moderating economic activity" in Q4. However, Waller added that "inflation is still too high."

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Fed expected to pause at December meeting

The Fed's aggressive series of rate hikes has the federal funds rate at its highest level in 22 years, and market participants do not believe the central bank will raise it past the current range of 5.25% to 5.5%. According to CME Group, futures traders are pricing in a 99% chance the Fed will hold rates steady at its December meeting.

The next update on inflation comes Thursday with the release of the October Personal Consumption and Expenditures (PCE) index, which tracks consumer spending.

As for today's economic news, The Conference Board said its consumer confidence index rose to 102.0 in November from 99.1 in October. "Consumer confidence increased in November, following three consecutive months of decline," said Dana Peterson, chief economist at The Conference Board, in the report. "Nonetheless, write-in responses revealed consumers remain preoccupied with rising prices in general, followed by war/conflicts and higher interest rates."

Fast-fashion retailer Shein heads toward IPO

In single-stock news, U.S.-listed shares of PDD Holdings (PDD) spiked 18.1% after the e-commerce platform reported earnings. In its third quarter, the company, which owns popular online marketplaces Pinduoduo and Temu, reported earnings of $1.64 per share on revenue of $9.7 billion – handily beating analysts' estimates.

PDD rival Shein was also in the news today, with the fast-fashion retailer reportedly filing confidential paperwork to go public. Details are sparse, but the company's initial public offering (IPO) could happen as soon as next year.

Although the Singapore-based e-commerce firm has some impressive financials, its IPO is far from a done deal. For one, Shein is accused of sourcing cotton from Xinjiang, where China is believed to have committed human rights abuses against the Uyghur population.

Plus, the company has been criticized "for the huge volumes of cheap clothes it produces, the lack of transparency in its supply chain and its appropriation of other designers' work," says Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Still, Shein going public would likely mark one of the hottest upcoming IPOs on Wall Street in 2024, and new investors should understand what an IPO is.

As for the major indexes, they spent time in both positive and negative territory today. At the close, the Dow Jones Industrial Average was up 0.2% at 35,416. The S&P 500 (+0.1% at 4,554) and the Nasdaq Composite (+0.3% at 14,281) eked out modest gains.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.