Major indices experienced a slight increase during midday trading on Wednesday as investors processed new labor market information.
The S&P 500 rose by 0.1% in recent transactions, while both the Dow Jones Industrial Average and the Nasdaq Composite showed marginal gains. Following a significant decline on Tuesday, which was triggered by unexpectedly robust economic data that reignited worries regarding the trajectory of interest rates, the market showed signs of recovery.
This morning’s ADP report on private sector employment revealed that job additions in December fell short of economists’ expectations, although weekly jobless claims were lower than anticipated. These figures serve as precursors to the much-anticipated December jobs report scheduled for release on Friday. Market participants are closely monitoring this data for insights that may influence the Federal Reserve’s interest rate decisions.
Data released on Tuesday indicated a greater number of job openings in November than economists had forecasted. This report, coupled with a stronger-than-expected performance in the services sector, highlighted the ongoing resilience of the U.S. economy and raised questions about the possibility of the Fed reducing its key interest rate.
In recent trading, the yield on 10-year Treasuries, which is often linked to interest rate expectations, decreased slightly to 4.68% after peaking at 4.73% earlier in the day, marking its highest level since April.
Large-cap technology stocks, which were primarily responsible for Tuesday’s market downturn, mostly rebounded today. Companies such as Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), and Tesla (TSLA) saw gains, while Meta Platforms (META) experienced a decline of approximately 1%.
Palantir (PLTR), a software company that was the top performer in the S&P 500 last year, fell by 3% this morning, adding to an 8% drop from the previous day. The stock is now down 20% from its peak reached on December 24.
Shares of MicroStrategy (MSTR), one of the largest holders of bitcoin, and cryptocurrency exchange Coinbase Global (COIN) declined by 3% and 2%, respectively, as the digital currency continued its downward trend.
Bitcoin was trading at $94,600, down from an overnight high of approximately $9.
ExxonMobil Anticipates Decline in Q4 Earnings Due to Decreased Oil Prices
ExxonMobil (XOM) has indicated that it expects its upstream earnings to be adversely affected by up to $900 million in the fourth quarter, compared to the preceding three months, as a result of declining oil prices.
The company projects that lower prices for liquids will reduce its upstream earnings by an estimated $500 million to $900 million in the fourth quarter of 2024 relative to the third quarter, as disclosed in a filing with the Securities and Exchange Commission (SEC).
This anticipated earnings decline follows ExxonMobil’s recent commitment to increasing its oil and gas production. The long-term strategy aims to leverage its nearly $60 billion acquisition of Pioneer Natural Resources from the previous year.
ExxonMobil’s outlook coincides with a period of weakened oil demand and an oversupply of the commodity. Last month, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced their decision to maintain voluntary production cuts of 2.2 million barrels per day until the end of March.
Shares of Instacart experienced an increase on Wednesday following the announcement that the food-delivery company will be included in a new index.
The stock of Instacart saw a rise of approximately 5%. This uptick came after the late announcement that the company, also referred to as Maplebear (CART), will be added to the S&P MidCap 400 index starting next Tuesday, taking the place of Enovis (ENOV).
Over the past year, Instacart’s shares have nearly doubled in value.
Additionally, Instacart announced a partnership with Ulta Beauty (ULTA) on Wednesday, aimed at delivering the beauty retailer’s products across the nation.
In contrast, Ulta’s shares fell by more than 3% following the news of its CEO’s impending retirement.
Enovis will transition to the SmallCap 600 index, where it will replace Arch Resources (ARCH), which is anticipated to be acquired by Consol Energy (CEIX), leading to the formation of Core Natural Resources.
In morning trading, shares of Enovis rose by more than 1%.
Shares of Palantir Technologies (PLTR) experienced another decline on Wednesday, following a significant drop the previous day, as the stock continues to pull back from its peak reached in late December.
The recent downturn in the stock can be attributed to Morgan Stanley’s initiation of coverage with an “underweight” rating earlier this week, alongside reports indicating that Cathie Wood’s ARK Investment Management had divested some of its holdings in the company.
The analytics software firm had an exceptional performance in 2024, concluding the year as the top performer in the S&P 500. Its stock price surged more than fourfold, driven by increasing demand for its suite of AI software solutions.
In recent trading, Palantir shares fell by 3% to approximately $68, following a nearly 8% decline on Tuesday. The stock has now decreased by 20% from its all-time high of $85.00 reached on December 24.