New York City, NY – The S&P 500 saw a 0.8% increase on Wednesday, December 11, 2024, in response to data showing sticky inflation rates aligning with forecasts, boosting expectations of potential rate cuts. Notably, Broadcom experienced a surge in shares due to reports of a collaboration with Apple on a new AI chip.
Following the release of the latest Consumer Price Index (CPI) report, major U.S. equity indexes displayed a mix of reactions on Wednesday. Although annual price increases in November surpassed October levels, the inflation data remained consistent with predictions, reinforcing beliefs that the Federal Reserve might reduce interest rates at their upcoming policy meeting.
During mid-week trading, the S&P 500 recorded a 0.8% gain, with the tech sector’s strength propelling the Nasdaq up 1.8% and closing above the 20,000-point mark for the first time. In contrast, the Dow ended the day with a 0.2% decrease.
Semiconductor and software provider Broadcom’s shares surged by 6.6%, marking the strongest performance among S&P 500 stocks on Wednesday. Reports of a partnership with tech giant Apple to develop an AI chip, code-named Baltra, contributed to the significant gains.
Tesla’s stock also saw a notable 5.9% jump, reaching a record high for the first time in three years. News of the electric vehicle maker’s intentions to launch a lower-cost vehicle in the first half of the following year, alongside price target boosts from analysts at Goldman Sachs and Morgan Stanley, fueled the stock’s rise.
Natural gas futures prices experienced a more than 6% increase as colder weather heightened demand for the essential heating fuel, supporting a successful trading day for natural gas stocks. Similarly, shares of producer and pipeline operator EQT Corp. rose by 5.9%.
GE Vernova shares gained 5% following the energy equipment firm’s announcement of a new quarterly dividend of 25 cents per share and a $6 billion stock buyback authorization. Additionally, the company raised its outlook for sales, free cash flow, and margins in 2025.
Conversely, shares of Texas Pacific Land, a significant landowner in the oil-rich Permian Basin, plummeted by 6.9% – marking the steepest decline in the S&P 500. Recent volatility in the stock, which surged to a record high in late November after entering the S&P 500 but subsequently relinquished those gains, has sparked diversification efforts to explore alternative revenue sources.
Health care companies with pharmacy benefit management (PBM) operations faced pressure after members of Congress introduced a bipartisan bill mandating health insurers and PBM operators to divest their pharmacy businesses. Consequently, shares of CVS Health, UnitedHealth, and Cigna, all of which have PBM operations, experienced declines.
Uber Technologies shares slipped by 5.8% following General Motors’ announcement of stepping back from its Cruise self-driving taxi initiative. Concerns regarding competitors Tesla and Waymo’s advancements in the self-driving technology industry, potentially disrupting Uber’s ride-hailing business, contributed to the stock’s decrease.
Walgreens Boots Alliance shares also saw a decline of 5.6%, partially reversing significant gains from the previous session. The downturn followed reports of the pharmacy operator engaging in talks to sell itself to a private equity firm.