Stock market today: Wall Street gains ground at the start of a holiday-shortened week

By The Canadian Press

Published 12:24 PST, Mon November 20, 2023

NEW YORK (AP) — Wall Street is rising Monday to begin a holiday-shortened week, pushing to its best level in more than three months. 

The S&P 500 was 0.8 per cent higher in late trading, coming off its third straight winning week. The Dow Jones Industrial Average was up 242 points, or 0.7 per cent, with an hour remaining in trading, and the Nasdaq composite was 1.2 per cent higher.

Microsoft was the strongest force pushing the market higher, and it rose 2.4 per cent after it said it’s bringing on Sam Altman for a new venture following his sudden dismissal as CEO of OpenAI, the maker of ChatGPT. Microsoft said it will also continue its partnership with OpenAI, as fervor around artificial-intelligence technology and the huge profits it’s expected to create continue to dominate Wall Street.

Stocks broadly drifted higher through the day, before they took a decisive swing upward in the afternoon when yields fell in the bond market following an auction of Treasurys. Easing Treasury yields over recent weeks have been the main reason for a strong rally for stocks. 

This upcoming week is relatively light on reports that could sway the hopes on Wall Street that have underpinned the drop in Treasury yields. 

Wall Street is getting more convinced that inflation is cooling enough for the Federal Reserve to finally be done with its market-crunching hikes to interest rates. Not only that, traders are moving up their expectations for when the Fed could actually begin cutting interest rates.

Despite Fed officials saying they may keep rates high for a while to ensure high inflation is definitively beaten, traders are thinking the first cut to rates could happen by early summer or maybe even by March. Such a move could act like steroids for financial markets and offer oxygen across the financial system.

The Thanksgiving holiday means the U.S. government will release its weekly update on jobless claims on Wednesday instead of the usual Thursday. Other than that, the release of the minutes from the Fed’s latest policy meeting on Tuesday and preliminary reports on U.S. business activity on Friday are among the highlights.

That could make Nvidia’s upcoming profit report on Tuesday the week’s highest-profile event.

Nvidia carries huge sway on the S&P 500 and other indexes because it’s swelled to become the fifth-most valuable U.S. stock. Much of that rise has been because of excitement around AI, and Nvidia’s report could offer clues on how much all the talk about AI is translating into actual sales.

Analysts expect Nvidia to say its earnings per more than quintupled from a year earlier and that its revenue soared to nearly $16.2 billion from less than $6 billion.

Nvidia has been one of the seven Big Tech stocks that have accounted for a disproportionate amount of the S&P 500's gains this year. The “Magnificent Seven” stocks have returned 73 per cent so far this year, versus just 6 per cent for the other 493 companies, according to Goldman Sachs strategists. 

While they're likely to perform better given expectations for stronger growth, the strategists led by David Kostin warn “the risk/reward profile is not especially compelling given elevated expectations.” 

Nvidia rose 2.3 per cent before its report. Best Buy, Deere, HP and Lowe’s will also be giving their latest quarterly updates this week.

On the losing end of Wall Street Monday was Kohl’s. The retailer fell 1.2 per cent after it said that Dave Alves left as its president and chief operating officer, less than nine months after naming him to the post.

In the bond market, Treasury yields were easing. The yield on the 10-year Treasury, which is the centerpiece of the bond market, fell to 4.41 per cent from 4.44 per cent late Friday.

The two-year yield, which moves more on expectations for Fed action, slipped to 4.89 per cent from 4.90 per cent late Friday. 

In stock markets abroad, Japan’s Nikkei 225 index touched a 33-year high before falling later in trading to a dip of 0.6 per cent. 

Stock indexes were stronger elsewhere in Asia and mixed in Europe. 

Crude oil prices rose to recover some of their sharp losses over the last couple months. A barrel of U.S. crude oil for delivery in December rose $1.71 to settle at $77.60, but it’s still well below its perch above $93 in late September.

Brent crude, the international standard, rose $1.71 to $82.32 per barrel.


AP Writer Zimo Zhong contributed. 

– Stan Choe, The Associated Press

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