Market Volatility Persists Amid Earnings and Economic Data
US stocks struggled to maintain momentum on Thursday, following a significant surge the previous day. The S&P 500 hovered near the flatline, while the tech-heavy Nasdaq Composite fell 0.4%. The Dow Jones Industrial Average saw minimal changes. This volatility comes as investors digest a fresh round of big bank earnings and economic data.
Earnings Season in Full Swing
Bank of America’s fourth-quarter profit more than doubled, driven by a Wall Street dealmaking revival. Morgan Stanley’s quarterly profit also surged, boosting its stock. However, UnitedHealth’s fourth-quarter revenue fell short of estimates, weighed down by weakness in its health insurance unit.
Senate Hearing for Treasury Secretary Nominee
The Senate Finance Committee hearing for Scott Bessent, President-elect Donald Trump’s pick for Treasury Secretary, took center stage on Thursday. Bessent emphasized the need to address US federal spending, stating, “We do not have a revenue problem in the United States of America, we have a spending problem.” He also highlighted the opportunity for a new ‘Golden Age’ for the US economy.
Retail Sales and Jobless Claims Data Released
Retail sales for December grew by 0.4%, below expectations of 0.6%. Weekly jobless claims rose more than expected to 217,000. These figures have sparked questions about the pace of economic growth and the potential for interest-rate cuts.
Housing Market Index Rises
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index increased to 47 in January, up one point from December. Despite elevated mortgage rates, builders are starting the year with more optimism than at the end of 2024.
Tech Stocks Lead Nasdaq Lower
Shares of Apple and Tesla led the Nasdaq Composite lower on Thursday, with Apple stock declining more than 3% and Tesla shares falling over 3.5%. The tech-heavy index dropped about 0.3%.
Market Expectations
Investors are now betting that the Federal Reserve will lower rates before July, reversing the previous trend sparked by the stronger-than-expected December jobs report. Markets expect the Fed to leave rates unchanged this month, especially after fresh inflation data showed signs of easing.
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