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What you need to know
- The S&P 500 gained 0.8% on Wednesday, Dec. 11, 2024, as data showed inflation remaining sticky but matching forecasts, bolstering rate-cut expectations.
- Broadcom’s shares skyrocketed after reports surfaced that it would partner with Apple to develop a new AI processor.
The major U.S. equity indexes varied Wednesday after the release of Consumer Price Index report (CPI).
While the annualized prices in November increased slightly from the October level, they were still in line with the forecasts. These data reinforce the expectations that Federal Reserve officials will lower interest rates next week at their policy meeting.
The S&P 500 added 0.8% in the mid-week trading session, while strength in the tech sector helped drive the Nasdaq up 1.8% to close above the 20,000-point threshold for the first time ever. The Dow finished the day with a 0.2% decline.
Shares of semiconductor and software provider Broadcom (AVGO) surged 6.6%, in the strongest performance of any S&P 500 stock on Wednesday. These gains were attributed to reports about a possible collaboration between Apple (AAPL) and Broadcom on the development of an AI chip, codenamed Baltra.
Tesla’s (TSLA), stock soared 5.9%, closing at a new record for the first three-year period. This was after news that Tesla intends to implement plans to create a cheaper vehicle which may launch during the first half next year. Goldman Sachs analysts and Morgan Stanley raised their Tesla price target, citing Elon Musk’s connections to the new presidential administration.
Prices of futures for natural gases jumped more than 6% as colder temperatures fueled demand for the main heating fuel. These prices helped to support a successful trading session for stocks in natural gas. Shares of EQT Corp. – a pipeline and producer – rose by 5.9%.
GE Vernova’s (GEV) stock gained 5% in value after the company announced a 25-cent quarterly dividend and a 6-billion dollar authorization to buy back shares. The company has also raised its forecasts for 2025 in terms of sales, cash flow and margins.
Shares of Texas Pacific Land (TPL), an owner of major acreage in the oil-rich Permian Basin, dropped 6.9%, in the steepest daily decline in the S&P 500. The stock has been volatile over the past month, surging to a record high in late November after its addition to the S&P 500 but giving back those gains in recent weeks. This century-old trust is exploring alternative ways to diversify revenue, which include data centers and bitcoin mining.
As members of Congress presented a bipartisan legislation that required health insurers to divest pharmacy businesses, pressure was put on companies in the healthcare industry with PBM operations. CVS Health shares (CVS) – the company that houses CVS Caremark PBM – fell by 6.2%. UnitedHealth (UNH), a major insurer with its own PBM, and Cigna Inc. (CI), a large insurer that also has a PBM operation, both saw their shares fall.
General Motors’ (GM) announcement that it will abandon its self-driving cab initiative Cruise caused shares of Uber Technologies to drop 5.8%. This move is in response to concerns that Tesla, Waymo and Alphabet’s Alphabet parent Alphabet, Alphabet, are getting an edge on the developing market for robo-taxis, which could disrupt Uber’s business.
Shares of Walgreens Boots Alliance fell 5.6%. The stock’s massive gain in the prior session was reversed by Wednesday’s decline. This followed reports that Walgreens Boots Alliance (WBA) had been in discussions to sell to a private-equity firm.
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