Why the stock market is suddenly freaking out CNN Business

Billions are being spent on AI development and the return expectations are high. Many experts believe AI will prove itself, fueling higher earnings expectations axes broker and, in turn, higher stock prices. Technological innovation has recently been a primary growth driver for the stock market, creating some of the best stocks of 2024. As an example, semiconductor company Nvidia (NVDA) has increased its stock price by 178% by decisively monetizing demand for high-performance computing resources. Nvidia’s graphics processing units are a preferred resource for machine learning workloads. The situation on Wall Street was ugly midmorning Tuesday, as investors grew increasingly nervous about the prospect of even higher rate hikes that could last for a longer period of time.

Three sectors to watch next year are technology, healthcare and energy. For added context, see this list of the best investing sectors for 2024. In other dealings early Monday, U.S. benchmark crude oil lost 65 cents to $70.59 per barrel in electronic average true range trading on the New York Mercantile Exchange. Brent crude, the international standard, shed 65 cents to $73.98 per barrel. In China, shares fell further, with the Shanghai Composite index edging 0.1% lower, to 3,263.76 and the Hang Seng in Hong Kong falling 0.4% to 19,150.99.

Technology

As stocks settle after the trading day, levels might still change slightly. The company’s assets under management, which topped $10 trillion at the end of the fourth quarter of 2021, have steadily slid this year. The trend continued in the third quarter, with BlackRock reporting assets under management of just under $8 trillion…down from $8.5 trillion at the end of June. Fruits and vegetables rose 1.6% for the month, while cereals and bakery products rose 0.9%. Other groceries increased 0.5% in September, following a 1.1% increase in August.

How major US stock indexes fared Wednesday, 11/13/2024

At the same time, fiscal help from Congress helped offset higher interest rates, while a boom in the technology sector courtesy of artificial intelligence provided wind beneath the market’s wings. Target is struggling to gain traction with inflation-weary consumers, with many seeking bargains or refocusing on essential items, said Neil Saunders, an analyst with GlobalData. The retailer’s struggles in the most recent quarter and its lowering of its forecast for the current quarter may not bode well for its holiday season, he added. The prospect of so much additional debt spooked bond investors, sending bond yields sharply higher Wednesday.

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Powell noted that the consequence of Russia’s invasion of Ukraine, for example, is raising fuel and commodities prices to new records – something the Fed cannot change. George, who was appointed president of the Kansas Fed in 2011, last month said she plans to retire from the job in January 2023. Cooling inflation is good news, even if some of the factors behind it are… not so great. Randall Kroszner, former governor at the Federal Reserve, told CNN that while inflation has likely peaked, it will take at least a year before inflation returns to the 2% level targeted by the Fed. The Nasdaq is still down 19.9% from its record finish in November 2021.

The Dow was down 1,300 points, or 4%, with minutes to go before the closing bell mercifully rings on Wall Street. But investors have another inflation report to (fear? dread? seems unlikely that anyone is looking forward to it) on Wednesday. The market is worried that hotter-than-expected inflation will prompt the Federal Reserve to raise interest rates more aggressively, inflicting serious damage to the US economy in the process. Western Digital, which also plays into the memory market, reported earnings late Wednesday that indicated weakness in some consumer areas. “Weaker trends in consumer and channel markets are impacting bit demand, which we think is the reason behind the softer fiscal first-quarter outlook,” Raymond James analyst Srini Pajjuri wrote. Micron’s stock was down 8.7% in afternoon trading, tracking toward its largest one-day percentage drop since it fell 19.8% on March 16, 2020, according to Dow Jones Market Data.

1. Billions are being spent on AI development and the return expectations are high.
2. Fortunately for the market, most of those variables look pretty positive these days, and are largely behind the blue-chip average’s latest landmark move.
3. The invasion and related events are creating additional upward pressure on inflation and are weighing on global economic activity.
4. In the crypto market, bitcoin hovered around $98,000, according to CoinDesk.

The proposed choice was interpreted “as a sign that President-elect Trump might adopt a more measured approach to tariffs and fiscal policy. Bessent’s influence is expected to bring nuanced economic strategies to the forefront, potentially easing concerns over abrupt policy shifts,” Stephen Innex of SPI Asset Management said in a commentary. Shares in technology companies saw big declines, with online shopping platform Meituan falling 4% while multimedia and video games company Tencent dropped 1.5%. China’s central bank kept the interest rate on the one-year medium-term lending facility unchanged at 2%. Bitcoin fell slightly and oil prices also declined, while U.S. How to buy ern futures advanced. Falling prices can indicate weak demand, and consumer spending is a big portion of the economy.

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Any softness in the inflation data could be a welcome sign for the stock market, he added. A report last week on second-quarter gross domestic product, the broadest measure of the US economy, was particularly robust, showing consumer spending resilience. Housing data is starting to show some signs of improvement, including mortgage rates tumbling to their lowest levels since February on Thursday.

Although annual inflation fell compared to July, it didn’t fall as much as economists expected. That could give the Fed license to hike interest rates even faster and higher than forecast. The Dow plummeted nearly 900 points in late morning trading…and all 30 Dow components were in the red. Nine Dow stocks, including tech giants Intel (INTC), Microsoft (MSFT), Apple (AAPL) and Salesforce (CRM), were down more than 4% each. The tech sector was hit particularly hard Tuesday, as investors ratcheted up their bets for a historically large interest rate hike by the Federal Reserve next week.

Runaway inflation took a breather in July, with consumer prices increasing by 8.5% year over year, a slower pace than the 9.1% increase in June, the Bureau of Labor Statistics reported Wednesday. But the Federal Reserve still may need to keep aggressively raising rates, despite the slowdown in inflation. Dana Peterson, chief economist with The Conference Board, told Kosik that she thinks a three-quarters of a point rate hike is still likely in September. Economists surveyed by Refinitiv had been expecting the 12-month rise in wholesale prices to slow to an 8.4% increase, and the month-to-month increase to come in at 0.2%, compared to the 0.1% decline in August. It seems that Powell wants to atone for his mistake of repeatedly calling inflation “transitory” for much of last year.