Overview of the U.S. Stock Market Performance
Major U.S. stock indices closed higher on the first trading day of the week, partly driven by a rebound in technology stocks that boosted almost all sectors of the S&P 500. Investors await upcoming macroeconomic data.
- Dow Jones Industrial Average: Increased by 0.47% to 48,362.68
- S&P 500: Gained 0.64% to 6,878.49
- Nasdaq Composite: Rose 0.52% to 23,428.83
Ten of the eleven sectors in the S&P 500 traded higher, with materials (+1.36%) and finance (+1.25%) showing the best performance. The basic materials sector was the only one to experience losses, falling 0.41%.
Volatility Index (VIX) Hits Lowest Level Since November
The Wall Street fear gauge, the CBOE VIX, dropped to 14.09 points, a decrease of 5.50% from the previous close and its lowest level since November 27, when it closed at 14.10 points.
Tech Stock Gains Drive Market Rally
Will McGough, Prime Capital Financial’s deputy investment director, stated, “From a market perspective, there aren’t many factors that can move it, so everyone is rightfully waiting for the Santa Claus rally.”
Key artificial intelligence-related stocks fueled the overall market rally.
- Nvidia: Shares rose over 1% after Reuters reported that the company plans to start shipping its H200 chips to China in mid-February.
- Micron Technology: Stocks gained 4.01%.
- Oracle: Shares increased by 3.33%.
Investors are watching to see if AI-related stocks can maintain their leadership heading into year-end.
Tesla Shares Hit All-Time High Following CEO Pay Reinstatement
Tesla shares closed with a gain of 1.57% and reached an all-time high after the Delaware Supreme Court reinstated CEO Elon Musk’s 2018 compensation package.
Low Trading Volume Ahead of Holiday Season
Trading volume on Monday was low, and it is expected to decrease further as the holiday season approaches. This week is short but packed with significant information.
- Tomorrow, the third-quarter U.S. GDP revision and October PCE inflation index (preferred by the Federal Reserve) will be released.
Key Questions and Answers
- What drove the U.S. stock market gains? The rebound in technology stocks, particularly Nvidia, Micron Technology, and Oracle, propelled the market higher.
- What is the significance of the CBOE VIX hitting its lowest level since November? The low volatility index indicates that investors are less concerned about market fluctuations.
- Why is the AI-related stock performance crucial? Investors are watching these stocks to see if they can maintain their leadership as the year ends.
- What factors influenced Tesla’s all-time high? The Delaware Supreme Court reinstating CEO Elon Musk’s 2018 compensation package boosted investor confidence.
- What important economic data releases are scheduled this week? The third-quarter U.S. GDP revision and the October PCE inflation index will be published.
