On November 27, 2024, both the Nasdaq and S&P 500 indices experienced declines of 0.9% and 0.5%, respectively, amid mixed economic signals and geopolitical concerns. Key US economic data provided a nuanced picture of performance, contributing to cautious investor sentiment.
US Economic Data Highlights
EIA Crude Oil Inventories: Fell by 1.844 million barrels, exceeding the forecast of 1 million, indicating tighter supply conditions.
US GDP Growth (Q3, Second Estimate): Steady at 2.8%, unchanged from previous estimates.
Personal Consumption and Spending: October's real personal consumption rose by 0.1% (forecast: 0.2%), while consumer spending grew by 0.4%, signaling a slowdown from the previous 0.6%.
Durable Goods Orders: Increased by 0.2%, below the forecast of 0.5%, indicating weaker demand.
PCE Price Index (YoY): Rose to 2.3%, higher than the previous 2.1%, indicating mild inflationary pressures.
Market Sentiment and Seasonality
Despite the declines, seasonality is favorable for both indices, with a Fear & Greed Index at 64 points, suggesting moderate investor optimism.
Rate Cut Expectations
Market participants are anticipating a 70% probability of a 25 basis-point rate cut at the Federal Reserve's next meeting on December 18, which could support equities.
Geopolitical Risks
Ongoing geopolitical tensions, particularly the war in Ukraine, continue to weigh on investor confidence, affecting energy prices and economic stability.
Conclusion
Both indices' declines reflect investor caution amid mixed economic signals and geopolitical risks. However, favorable seasonality and rate cut expectations could stabilize or boost the indices in the near term.