Traders work on the floor at the New York Stock Exchange on Dec. 10, 2024.
Brendan McDermid | Reuters
Stock futures jumped after November’s inflation report met economists’ projections, clearing the way for the Federal Reserve to cut interest rates again at its December meeting next week.
Dow Jones Industrial Average futures rose 98 points, or 0.2%. S&P 500 futures and Nasdaq 100 futures ticked higher by 0.5% and 0.8%, respectively.
November’s consumer price index, which tracks a basket of goods and services, was in line with expectations. The reading showed a 0.3% rise from October and 2.7% increase from a year ago. Excluding volatile food and energy prices, core CPI increased 0.3% on the month and 3.3% on an annual basis.
While this inflation data represented a quicker pace from the prior month, traders speculated it was still not high enough to keep the Fed from cutting rates at its next gathering. Fed funds futures are pricing in a more than 87% likelihood that the central bank lowers rates at that gathering, according to CME’s FedWatch Tool.
“Today’s inflation report likely confirms a Fed policy cut next week but, with monthly core inflation hitting its strongest rate since the inflation scare of early 2024, price pressures are hardly settling at a level that the Fed can be completely at ease with,” said Seema Shah, chief global strategist, Principal Asset Management.
The market rebounded Wednesday from a losing day in the prior session, as Tuesday marked the second straight down day for the S&P 500 and Nasdaq Composite and fourth negative session in a row for the Dow.
Nvidia, Tesla and other bull market leaders led the gains in premarket following the relatively tame inflation data.
CPI report for November comes in line with expectations
Inflation rose slightly in November, matching expectations.
The consumer price index rose 0.3% month over month and 2.7% year on year for November. That’s in line with what economists polled by Dow Jones anticipated.
Core CPI, which strips out food and energy, increased 0.3% month on month. Year over year, it advanced 3.3%. Both matched expectations.
— Fred Imbert
Stocks making the biggest moves premarket
Check out some of the companies making headlines in premarket trading.
- Macy’s — The department store chain tumbled 9% after it lowered its fiscal-year forecast. Macy’s now sees adjusted earnings coming in between $2.25 to $2.50, while prior guidance adjusted for delivery expense had estimated a range between $2.34 to $2.69, according to FactSet.
- GE Vernova — The energy equipment maker fell 2.4% after it issued weaker-than-expected full-year revenue guidance for both the 2024 and 2025 fiscal years. GE Vernova also announced it would initiate a dividend of 25 cents per share and an initial $6 billion share repurchase authorization.
- Dave & Buster’s — The arcade and dining venue operator plummeted more than 14% after posting disappointing third-quarter results and announcing the departure of its CEO. The company reported a loss of 45 cents per share on revenue of $453 million. Analysts expected a loss of 40 cents per share on revenue of $463.7 million.
Read the full list here.
— Brian Evans
C3.ai tumbles 5% in early morning trading following JPMorgan downgrade
C3.ai logo is seen near computer motherboard in this illustration taken January 8, 2024.
Dado Ruvic | Reuters
Shares of C3.ai tumbled 5% in Wednesday’s premarket trading hours after JPMorgan downgraded the enterprise artificial intelligence software company to an underweight rating from neutral.
Analyst Pinjalim Bora said that the downgrade was largely based on the stock’s valuation, which he now considers to be stretched.
“Given the already rich valuation, which is likely already pricing in a much better growth-plus-profile, which we find difficult to underwrite currently, we expect shares to underperform our coverage for 2025,” the analyst wrote.
Shares of C3.ai have surged 45% in 2024.
CNBC Pro subscribers can read the full story here.
— Lisa Kailai Han
Macy’s shares tumble following mixed full-year guidance
People walk by Macy’s flagship Manhattan store, which is being decorated for the holiday season on November 25, 2024, in New York City.
Spencer Platt | Getty Images
Shares of Macy’s fell more than 10% in the premarket after the department store operator cut its earnings guidance and slightly raised its revenue guidance for the full year.
Macy’s now expects earnings to come in between $2.25 and $2.50 per share, excluding items, down from its prior guidance of $2.55 and $2.90 per share. Analysts polled by FactSet had expected $2.73 per share.
On the other hand, the company now anticipates revenue for the period coming in between $22.3 billion and $22.5 billion, up from its prior guidance of $22.1 billion and $22.4 billion. Analysts had penciled in $22.18 billion, per FactSet.
M, 1-day
The stock has significantly underperformed the broader market this year, with shares tumbling almost 17% year to date. That said, the stock has risen 9% in the past month.
— Sean Conlon
Rate cut next week not in doubt, Vital Knowledge says
Adam Crisafulli of Vital Knowledge thinks a Fed rate cut is a sure thing next week. After that, the outlook is less clear.
“We don’t think a rate cut from the FOMC next week is in doubt, but the forward guidance is likely to see a modestly hawkish pivot, w/the 1/29 meeting (at least) likely to be a “hold” (if not the 3/19 one too),” Crisafulli noted.
— Fred Imbert
Europe stocks open lower
European stocks opened slightly lower on Wednesday as market participants awaited the release of U.S. inflation data.
The pan-European Stoxx 600 index traded down 0.2% shortly after the opening bell, with most sectors in negative territory.
— Sam Meredith
South Korea leads gains in Asia as markets trade mixed
People walk inside the Korea Exchange (KRX) building, as stock markets Asia as a whole have been affected by the intensifying political turmoil over president Yoon Suk Yeol’s role in martial law, in Seoul, South Korea, on 9 December, 2024.
Daniel Ceng | Anadolu | Getty Images
Asia-Pacific markets were mixed Wednesday, with South Korea the notable outlier as the country continued to grapple with political turmoil.
The blue-chip Kospi jumped 1.02% and finished at 2,442.51 and the small-cap Kosdaq rose 2.17% to 675.92, as the country’s corruption investigation office for high-ranking officials reportedly said it would seek the detention and arrest of President Yoon Suk Yeol if conditions are met.
That comes after media reports emerged that police had raided the presidential office as part of an investigation into Yoon’s brief imposition of martial law.
Separately, China is reportedly kicking off its annual economic work conference on Wednesday to outline its economic policies and growth targets for next year.
Hong Kong’s Hang Seng index reversed gains to trade 0.76% lower in its final hour of trade, while mainland China’s CSI 300 index was 0.17% down and closed at 3,988.83.
— Lim Hui Jie
Investors await inflation data
Market participants are gearing up for closely followed inflation data due Wednesday morning.
Economists polled by Dow Jones anticipate the inflation gauge will rise 0.3% from October and 2.7% compared with a year ago. Excluding volatile food and energy prices, the “core” CPI is expected to increase 0.3% on the month and 3.3% from 12 months earlier.
Read more about what to expect here.
— Alex Harring
See the stocks moving after hours
Here are some stocks moving in extended trading:
- General Motors — Shares of the automotive giant popped nearly 3% after General Motors said it would no longer fund robotaxi development by self-driving car company Cruise.
- GE Vernova — The energy equipment company slid 3% after providing full-year revenue guidance for both the 2024 and 2025 fiscal years that was weaker than expected by analysts polled by FactSet.
See the full list here.
— Alex Harring
Stock futures are little changed
Futures tied to the Dow, S&P 500 and Nasdaq 100 all traded about 0.1% higher shortly after 6 p.m. ET.
— Alex Harring
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