Thanksgiving Brings a Stock Rally, but Nvidia’s Post-Earnings Dip Looms

The market experienced a notable stock rally ahead of Thanksgiving, with indices showing significant gains. This surge in stock values came amidst pivotal developments in various sectors, shaping investor sentiment and setting the stage for a dynamic holiday trading break.

Markets surged on Wednesday before the Thanksgiving break, with tech giant Nvidia’s earnings stirring a cautious response amid concerns over US-China chip exports. The Nasdaq Composite (^IXIC) and S&P 500 (^GSPC) marked gains around 0.4%, while the Dow Jones (^DJI) rose by 0.5% or approximately 185 points.

Key Highlights:

• Stocks Rally Pre-Thanksgiving: Nasdaq, S&P 500, and Dow Jones rise around 0.4-0.5%.
• Nvidia’s Earnings vs. China Concerns: Nvidia surpasses expectations but faces caution due to US-China chip export worries.
• Oil Price Fluctuation: Prices drop over 4% initially, recover slightly to nearly $77 per barrel after OPEC+ meeting delay.
• AI Industry Drama: Sam Altman’s return to OpenAI triggers market impact, particularly benefiting Microsoft.
• Thanksgiving Market Outlook: Dow up 0.5%, Nasdaq and S&P 500 see a 4% rise, oil prices dip by 1.8%.
• Disney’s Box Office Expectation: Disney anticipates $40-$50 million debut for “Wish” amid efforts to revive its film division.
• Consumer Sentiment and Economic Indicators: Mixed sentiments in University of Michigan’s index, focusing on personal finance and business conditions.
• OpenAI’s Impact on Microsoft: Altman’s return stabilizes OpenAI, influencing positive market sentiments for Microsoft.

Nvidia’s Strong Earnings vs. China Concerns

Nvidia exceeded Wall Street’s expectations in its quarterly earnings. However, apprehension loomed as the company acknowledged potential impacts of US restrictions on chip exports to China. This acknowledgment led to a 2% slip in the Stock Rally value during afternoon trading. The company expects a significant sales decline to affected destinations.

Following another strong quarter, Nvidia’s stock experienced a “sell the news” scenario post-earnings. Despite this, the stock managed to hold up relatively well, marking a bullish period for the company.

Also Read: Japan Stocks Close Higher, Nikkei 225 Up by 0.43%

Oil Prices Slide Amid OPEC Meeting Delay

Oil prices fell by 4% to $74.45 a barrel as OPEC rescheduled its meeting initially slated for Sunday. This development sparked rumors regarding potential disagreements over production cuts within the organization. OPEC+’s decision to postpone the meeting raises doubts about future oil output strategies, signifying potential disagreements among member nations.

Oil prices initially plummeted by over 4% after OPEC+ postponed its output discussion, causing uncertainty in the oil-producing sector. Nonetheless, West Texas Intermediate (WTI) crude futures later recovered, experiencing a 1% dip to nearly $77 per barrel.

AI Industry Drama: Altman’s Return to OpenAI

Amidst the AI sector’s upheaval, OpenAI announced the return of Sam Altman as its CEO, accompanied by board member reshuffling. Microsoft, a pivotal backer, saw a 1% stock rise post-announcement.

OpenAI’s leadership reshuffle, particularly Altman’s return, influences Microsoft’s stocks positively, signifying a resolution to recent AI industry unrest. Altman’s return to OpenAI provides stability, positively impacting Microsoft’s Stock Rally and offering reassurance to investors in the AI industry.

Also Read: Inflation Challenges: Powell’s Perspective on Current Economic Landscape

Stock Rally: Pre-Thanksgiving Surge in Market Performance

As the market heads into Thanksgiving, stocks maintain a positive trend with the Dow up by 0.5%, Nasdaq and S&P 500 marking a 4% rise, and oil prices experiencing a slight 1.8% dip. Stock indexes concluded the session with moderate gains, continuing their upward trajectory. Nvidia’s post-earnings movement and the 4% dip in oil prices after OPEC postponed its meeting are among the highlights.

Investors are keeping a close eye on certain stocks, particularly Advanced Micro Devices (AMD), ARM Holdings, and Comfort Systems, amidst the market’s continued upward movement.

Consumer sentiment, as gauged by the University of Michigan’s index, showcased mixed signals. While personal finance expectations improved, there’s a notable decline in expectations for business conditions.

Tech Sector Leads Market Surge

Tech stocks, including Nvidia, played a crucial role in propelling the market upwards. Despite uncertainties, the market experienced a positive trend.

U.S. stocks are building on a robust NovemberStock Rally, with the S&P 500 edging closer to its summer peak, trailing merely 1.1% behind the July high of 4,607.07 points. The Nasdaq is leading today’s gains, surging 175 points or 1.24%, buoyed by impressive performances from Microsoft and Apple.

Stock Rally Treasury Yields and Stock Momentum

Treasury yields retreat after a successful auction of $16 billion in 20-year bonds, drawing substantial bids, especially from foreign investors, encompassing around 74% of the total sale. Benchmark 10-year notes are trading at 4.430%, while 2-year notes edge slightly higher.

Image Source: http://finance.yahoo.com

The relationship between bond yields and stock market performance remains critical. Lower yields tend to make investors more favorable towards stocks, impacting valuations.

Market Performance and Oil Price Movement

Stocks show a positive trend pre-Thanksgiving, with the tech sector leading the surge. Oil prices initially dipped following the OPEC+ meeting delay. A recent New York Fed survey reveals the highest auto loan rejection rate since 2013 in the last quarter, coupled with a noticeable decline in overall credit demand. This trend could significantly impact consumer spending in 2024, possibly influenced by the Federal Reserve’s rate hikes, reaching a peak of 5.25% to 5.5% in July 2007.

Stocks kick off the day with modest gains as the S&P 500 climbs by 8 points, the Dow adds 36 points, and Microsoft’s 1.5% advance drives the Nasdaq up by 70 points.

Stock Rally S&P 500 Nearing Peak

Source: http://finance.yahoo.com/quote/XLE

Stocks power higher in the final trading moments, with the S&P 500 surging by 41 points or 0.9%, inching within 1.1% of its summertime peak. The Nasdaq leads the charge, climbing 175 points or 1.24%, driven by strong performances from Microsoft and Apple. The Dow also gains 257 points, contributing to the market’s upward momentum.

Stay tuned for further updates on the stock market trends and key movements throughout this holiday-shortened trading week.