The market got interesting on Thursday, and not just because the Dow hit a record high. Sure, the blue-chip index surged more than 600 points to close at 48,704.01, but the real story was where the money was moving. Investors decided they'd had enough of pricey tech stocks and started rotating into industrials, financials, and healthcare. Think of it as a collective decision that maybe not everything needs to be a semiconductor play.
This shift came on the heels of the Federal Reserve's third consecutive interest rate cut, which apparently gave investors enough confidence to spread their bets around. The S&P 500 gained 0.21% to reach 6,901.00, while the Nasdaq Composite fell 0.25% to 23,593.86. When the Nasdaq drops while the Dow soars, you know something's up with sector rotation.
The tech sector had a rough day. Oracle Corp. (ORCL) was the poster child for disappointment, sinking about 11% after delivering earnings and guidance that Wall Street didn't want to hear. Other big names took hits too: Nvidia Corp. (NVDA) fell 1.6%, Broadcom Inc. (AVGO) dropped 1.6%, and Intel Corp. (INTC) lost 3.1%.
The economic data offered a mixed picture. U.S. initial jobless claims jumped by 44,000 from the previous week to 236,000 for the week ending December 6, which was higher than the market's expectation of 220,000. On a brighter note, the trade deficit narrowed to $52.8 billion in September from $59.3 billion the previous month, better than the estimated $63.3 billion gap. Meanwhile, U.S. wholesale inventories increased by 0.5% to around $911.5 billion in September, following a revised 0.1% gain in August.
Most sectors on the S&P 500 finished in the green, with industrials, materials, and financials leading the charge. Communication services and information technology were the outliers, closing lower and bucking the overall market trend.
Looking ahead, investors are waiting on earnings results from Johnson Outdoors Inc. (JOUT) and Rent the Runway Inc. (RENT).
Market Sentiment Improves to Neutral
The CNN Money Fear and Greed Index showed meaningful improvement, climbing to 46.3 on Thursday from a prior reading of 40.0. That pushed the index into neutral territory, suggesting investors are feeling a bit less anxious about the market.
For those unfamiliar, the Fear and Greed Index measures current market sentiment based on a simple premise: fear pushes stock prices down, while greed pushes them up. The index calculates sentiment using seven equal-weighted indicators, with scores ranging from 0 to 100. Zero represents maximum fear, while 100 signals maximum greed. At 46.3, the market is sitting right in the middle, neither euphoric nor terrified.