Closing Stock Market SummaryThis busy week for the stock market got started on a downbeat note as investors took some money off the table following a strong showing this month. Entering today, the Nasdaq and S&P 500 were up 11.0% and 6.0%, respectively, so far in January. The main indices spent most of the session on a steady decline, ultimately settling near their worst levels of the day.
Investors took a more cautious approach today in front of policy decisions from the Fed, the ECB, and the Bank of England later this week. The skittishness around the FOMC decision largely relates to Fed Chair Powell's press conference and the possibility that Mr. Powell will make a concerted effort on Wednesday to rein in the market's enthusiasm by tamping down its optimism over any potential rate cuts this year.
On a related note, Nick Timiraos of The Wall Street Journal wrote over the weekend that Fed officials are concerned that inflation could reaccelerate due to tight labor markets. Mr. Timiraos added in a Monday article that the Fed's interest rate strategy could depend on how much members believe the economy will slow.
Some hesitation today on the part of buyers stemmed from a wait-and-see mindset ahead of several market-moving data releases, including the Q4 Employment Cost Index, the January ISM releases, and the January Employment Situation Report.
In addition, more than 100 S&P 500 companies will be reporting earnings this week, headlined by Meta Platforms (META 147.06, -4.68, -3.1%), Apple (AAPL 143.00, -2.93, -2.0%), Alphabet (GOOG 97.95, -2.76, -2.7%), and Amazon.com (AMZN 100.55, -1.69, -1.7%). Mega cap stocks had been leading the January charge, but trailed the broader market today as they succumbed to profit-taking interest. The Vanguard Mega Cap Growth ETF (MGK) closed down 1.9% versus a 1.1% loss in the Invesco S&P 500 Equal Weight ETF (RSP) and a 1.3% loss in the S&P 500.
Downside leadership from the mega cap space was evident in S&P 500 sector performance. The information technology (-1.9%), communication services (-1.8%), and consumer discretionary (-1.7%) sectors were among the worst performers today.
Energy (-2.3%) was the top laggard for the 11 sectors as oil prices faded ahead of the OPEC+ meeting later this week. WTI crude oil futures fell 1.9% to $77.94/bbl.
Only one sector -- consumer staples (+0.1%) -- was able to maintain a slim gain by the close.
- Nasdaq Composite: +8.9% YTD
- Russell 2000: +7.3% YTD
- S&P Midcap 400: +6.8% YTD
- S&P 500: +4.6% YTD
- Dow Jones Industrial Average: +1.7% YTD
There was no U.S. data of note today.
Caterpilllar (CAT), Exxon Mobil (XOM), General Motors (GM), Marathon Petroleum (MPC), McDonald's (MCD), Pfizer (PFE), Phillips 66 (PSX), PulteGroup (PHM), Spotify (SPOT), Sysco (SYY), and UPS (UPS) are among the notable companies reporting earnings ahead of tomorrow's open.
Looking ahead to Tuesday, market participants will receive the following economic data:
- 8:30 a.m. ET: January Chicago PMI ( consensus 45.4; prior 44.9), Q4 Employment Cost Index ( consensus 1.1%; prior 1.2%)
- 9:00 a.m. ET: November FHFA Housing Price Index (prior 0.0%), November S&P Case-Shiller Home Price Index ( consensus 6.8%; prior 8.6%)
- 10:00 a.m. ET: December Consumer Confidence ( consensus 108.1; prior 108.3)