Market Overview

The S&P 500 advanced 36 points to reach a new record high. The Nasdaq Composite increased by 1.3% to a fresh all-time high, while the Dow Jones Industrial Average closed above 45,000 for the first time. This strong performance was driven by impressive earnings results from Salesforce (CRM), which rose 11.0% to 367.87, and positive comments about its Agentforce AI system for enterprises, boosting enthusiasm in the AI sector.

Sector Performance

• Mega-cap stocks and semiconductor-related shares led the market, benefiting from renewed AI optimism and positive momentum from the previous week.
• The Vanguard Mega Cap Growth ETF (MGK) increased by 1.6% today, accumulating a 3.1% gain for the week.
• The PHLX Semiconductor Index (SOX) rose by 1.7% for the session, achieving a 4.0% increase since last Friday.

Company Highlights

• Marvell (MRVL) surged 23.2% to 118.15.
• Okta (OKTA) climbed 5.4% to 86.11.
• Pure Storage (PSTG) jumped 22.1% to 65.35.
• Dollar Tree Stores (DLTR) gained 1.9% to 73.83.

These companies reported strong earnings and guidance, which were well-received by investors, providing additional support to the broader equity market.

Interest Rates and Economic Data

Market rates fell, contributing to the positive bias in stocks. The 10-year yield decreased by four basis points to 4.18%, and the 2-year yield dropped by five basis points to 4.12%. These movements followed weaker-than-expected economic data, such as the ADP Employment Change and the ISM Service PMI for November, reinforcing expectations of a Federal Reserve rate cut by 25 basis points at its December meeting.

Sector Movements

• The S&P 500 information technology sector rose by 1.8%, leading among the 11 sectors.
• The energy sector experienced the largest decline, falling by 2.5% due to decreasing oil prices, which dropped to $68.60 per barrel, a decline of 2.0%.

Federal Reserve and Economic Outlook

The market received the Federal Reserve's November Beige Book and comments from Fed Chair Jerome Powell at the NYT DealBook Conference. Powell expressed confidence in the U.S. economy, highlighting strong performance, low unemployment, and inflation progress. He emphasized the Fed's cautious approach to monetary policy, balancing inflation control with labor market stability. The Beige Book reported a slight rise in economic activity across most Federal Reserve Districts.

Market Indices Performance

• Nasdaq Composite: +31.5%
• S&P 500: +27.6%
• S&P Midcap 400: +20.7%
• Russell 2000: +19.7%
• Dow Jones Industrial Average: +19.4%

Review of Economic Data

• Weekly MBA Mortgage Applications Index: 2.8%
• November ADP Employment Change: 146K (consensus 170K)
• November S&P Global US Services PMI - Final: 56.1
• November ISM Non-Manufacturing Index: 52.1% (consensus 55.5%)
• October Factory Orders: 0.2%

The key takeaway from the reports is that tariff concerns were frequently mentioned by respondents considering their outlooks. Factory orders showed improvement after declines in the previous two months.

Today's News

In a tragic turn of events, UnitedHealthcare (UNH, Financial) CEO Brian Thompson was shot and killed outside a Manhattan hotel. The incident occurred on Wednesday morning just before he was scheduled to speak at the company's annual investor conference. The New York Police Department confirmed the shooting, stating that Thompson was attacked by a masked individual who fled the scene. This shocking event led to the cancellation of the company's investor day.

Nvidia (NVDA, Financial) is under scrutiny by the European Commission, which is investigating the company's business practices regarding its GPU products. The inquiry is part of a potential probe into Nvidia's proposed $700 million acquisition of Run:ai. Despite the investigation, Nvidia's shares rose by over 3.5% during afternoon trading. The company plans to open-source Run:ai, expanding its availability beyond just Nvidia GPUs.

SentinelOne (S, Financial) saw its shares drop by 10% despite raising its fiscal 2025 revenue guidance. The cybersecurity firm reported third-quarter results that aligned with expectations, but the market reacted negatively. SentinelOne achieved positive free cash flow for the first time on a trailing-twelve-month basis and increased its revenue growth outlook to 32% for the fiscal year 2025.

Foot Locker (FL, Financial) and Nike (NKE, Financial) experienced fluctuations in their stock prices following Foot Locker's disappointing Q3 results. However, Foot Locker's CEO Mary Dillon reassured investors about the ongoing partnership with Nike, which is expected to boost growth in the fourth quarter. Dillon noted that consumer spending was cautious, affecting sales outside the back-to-school season.

Juniper Networks (JNPR, Financial) shares edged higher by 2.2% on news that the Department of Justice's decision on its $14 billion sale to Hewlett Packard Enterprise (HPE) might be delayed. The delay could extend into the next administration, potentially affecting the deal's approval. HPE CEO Antonio Neri remains optimistic about closing the deal soon.

Shift4 Payments (FOUR, Financial) saw a 12% drop in its stock price after Bank of America downgraded it to Neutral. The downgrade followed the announcement that CEO Jared Isaacman was nominated for NASA administrator, raising concerns about leadership stability. Isaacman intends to remain engaged with the company until his confirmation.

Hershey (HSY, Financial) shares rose by 2% amid takeover speculation, despite initially losing ground. Traders cited a Betaville "uncooked" alert suggesting potential interest in acquiring Hershey. The company has a history of rejecting takeover offers, with the Hershey Trust maintaining control through voting rights.

Williams (WMB, Financial) plans to file a significant lawsuit against Energy Transfer (ET), alleging that ET's actions have delayed the Louisiana Energy Gateway project. Williams CEO Alan Armstrong criticized ET for attempting to block competitors' projects by controlling pipeline crossings, a move he hopes to curb with legal action.

AeroVironment (AVAV, Financial) announced a significant acquisition of BlueHalo in an all-stock transaction valued at approximately $4.1 billion. Despite the acquisition news, AVAV shares dropped by 7.56% as the company's Q2 earnings missed expectations. The acquisition aims to enhance AeroVironment's capabilities in the defense sector.

Synopsys (SNPS, Financial) reported strong Q4 results with non-GAAP EPS beating estimates. However, the stock fell by 8.16% as investors focused on the company's future outlook and the pending acquisition of Ansys. Synopsys expects to maintain double-digit revenue growth in 2025.

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