Market Overview

The stock market started the session with a rally, but buying momentum faded by the close. The S&P 500 traded up as much as 1.3% at its session high before closing 0.6% higher than Friday. The Nasdaq Composite closed 1.2% higher, while the Dow Jones Industrial Average and Russell 2000 both closed with declines of 0.1%.

S&P 500 and Nasdaq Composite Performance

• The S&P 500 and Nasdaq Composite saw buying interest in the mega-cap and chipmaker sectors, although this interest faded from initial levels.
• NVIDIA (NVDA, Financial) outperformed, trading up as much as 5.3% at its high, closing at $149.43 (+3.4%). The stock was buoyed by AI enthusiasm and anticipation of CEO Jensen Huang's keynote at the Consumer Electronics Show (CES).
• Foxconn's report of a 15% year-over-year increase in record Q4 revenues contributed to the initial market uplift.
• The S&P 500 maintained a position above its 50-day moving average (5,948) throughout the session.

Market Influences

• Buying interest waned due to choppy Treasury actions and President-elect Trump's comments on tariff policy.
• The 10-year yield fluctuated between 4.58% and 4.64%, settling at 4.61%.

Sector Performance

• Seven S&P 500 sectors closed lower, while four closed higher.
• Utilities (-1.1%) and real estate (-1.4%) sectors experienced the largest losses.
• Communication services (+2.1%) and information technology (+1.4%) sectors led the gains.

Year-to-Date Index Performance

• Russell 2000: +1.6% YTD
• Nasdaq Composite: +2.9% YTD
• S&P 500: +1.6% YTD
• S&P Midcap 400: +1.1% YTD
• Dow Jones Industrial Average: +0.4% YTD

Economic Data Review

Factory orders decreased 0.4% month-over-month in November, slightly below the consensus of -0.3%. Excluding transportation, factory orders rose 0.2%. Shipments of manufactured goods edged 0.1% higher in November.

The key takeaway is that the weakness in factory orders was concentrated in the transportation equipment sector, with a modest pickup in other order activities.

PMI Data

The December S&P Global US Services PMI was 56.8, down from the prior 58.5 but above November's final reading of 56.1. This indicates an accelerated pace of expansion compared to the previous month.

Today's News

Nvidia (NVDA, Financial) saw its shares rise by 3.4% as CEO Jensen Huang is set to deliver a keynote at the Consumer Electronics Show, focusing on the company's AI strategy. Analysts at Wedbush Securities anticipate Huang will outline Nvidia's vision for AI, highlighting increasing use cases across industries. Nvidia's competitor, AMD (AMD), also experienced gains, while Intel (INTC) faced a decline of nearly 3.5% amid "unprecedented demand" for Nvidia's AI accelerators.

Google (GOOG, GOOGL) unveiled its latest Google TV operating system with the Gemini AI assistant at the Consumer Electronics Show. This new feature allows users to interact with their TV in natural language, offering capabilities like news summaries and smart home device control. The Gemini model aims to enhance user experience by providing AI-generated content and summaries.

Dell Technologies (DELL, Financial) shares increased nearly 4% following the announcement of a new lineup of AI-powered PCs. CEO Michael Dell (Trades, Portfolio) emphasized the transformative role of AI in personal computing, with the new devices categorized under Dell, Dell Pro, and Dell Pro Max, each tailored to different user needs.

AT&T (T, Financial) received an upgrade from RBC Capital Markets, who now sees the company benefiting from growth initiatives tied to fiber investments. RBC highlighted AT&T's plans to reduce copper-related costs significantly by 2027. In contrast, T-Mobile US (TMUS, Financial) was downgraded due to less favorable risk/reward based on its current valuation, despite solid execution.

Procore Technologies (PCOR, Financial) was upgraded to Buy by Jefferies, citing its strong position in the construction management software market. Jefferies increased its price target for Procore, noting the company's potential for improved margins as rates stabilize in 2025.

iRobot (IRBT, Financial) shares surged 25% on heavy volume, continuing Friday's rally. The sector's interest may be linked to speculation about tariff changes under President-elect Trump, although Trump has denied any such plans. Other robotics companies like Nautilus Robotics (KITT) and Microbot Medical (MBOT) also saw significant gains.

Wells Fargo spotlighted 31 companies with above-average growth potential, with a focus on the Consumer Discretionary and Information Technology sectors. Notable mentions include SBA Communications (SBAC) and NIKE (NKE), highlighting the diversity of growth opportunities across different industries.

Charles Schwab (SCHW, Financial) reported a rise in its Schwab Trading Activity Index, reflecting increased retail investor activity. Despite the lack of a typical "Santa Claus Rally," investor sentiment appeared bullish towards the end of the month, with increased equity exposure.

FuboTV (FUBO, Financial) and Disney (DIS, Financial) announced a merger of Disney's Hulu + Live TV with Fubo, creating a new venture serving over 6.2 million customers in North America. Disney will hold a 70% controlling stake, and the deal includes a settlement of litigation with Disney, ESPN, Fox, and Warner Bros. Discovery.

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