U.S. stocks this Thursday were mixed, attempting to bounce back from a weak start to 2024. The Dow Jones Industrial Average (DJI) led the charge, gaining 0.4%, while the S&P 500 (GSPC) edged up 0.2%. The Nasdaq Composite (IXIC) remained near breakeven after struggling all week.
Investors remain in a cautious mood following Wednesday's release of the Federal Reserve's meeting minutes. While the minutes confirmed the central bank's commitment to lower rates by the end of the year, they also caused uncertainty by suggesting rates could stay high "for some time" depending on inflation's trajectory. This dampened hopes for an immediate interest rate cut in March, a scenario that had fueled the market's recent rally.
However, some positive economic data on Thursday offered a glimmer of hope. The ADP employment report revealed that private companies added 164,000 jobs in December, exceeding expectations and pointing to continued labor market strength. Additionally, initial jobless claims for last week came in below estimates, suggesting a cooling off in layoffs.
These mixed signals kept investors on their toes, leading to the uneven close. Despite the Dow's modest gain, the S&P 500 remained below its key 200-day moving average, a technical indicator often watched by traders. Meanwhile, the Nasdaq, often sensitive to interest rate expectations, struggled to find traction throughout the day.
Beyond the Fed and economic data, several other factors contributed to the market's mixed performance:
- Oil prices: Brent crude rose above $79 a barrel, buoyed by expectations of increased Chinese demand and potential production cuts from OPEC. This provided some support for energy stocks, but also raised concerns about inflation.
- Tech earnings: Apple (AAPL) reported solid financial results, beating analyst estimates on both revenue and earnings. This could lend a positive boost to the Nasdaq in Friday's session.
- Geopolitical tensions: The recent escalations in the Middle East and the ongoing war in Ukraine continue to weigh on investor sentiment, adding to the market's nervousness.
Looking ahead, investors are keeping a keen eye on the economic data and the Fed's announcements closely. Friday's upcoming jobs report and inflation data will be in focus, along with any further developments in the global geopolitical landscape. The market's direction will likely remain volatile in the short term as investors grapple with these uncertainties.