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Stock market news today: Stocks go nowhere after Fedspeak, strong GDP data

US stocks were mixed on Wednesday as investors digested the possibility of the Federal Reserve cutting interest rates sooner than many had anticipated and updated data showed the US economy grew faster than previously reported in the third quarter.

The Dow Jones Industrial Average (^DJI) served as the biggest gainer barely finishing above the flat line, while the benchmark S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) fell about 0.1%.

Hopes for a policy pivot grew after Fed Governor Christopher Waller said there was "no reason" to insist rates stay "really high" if inflation continues to cool consistently.

While Fed Governor Michelle Bowman differed, other officials echoed Waller's dovish comments, with Chicago Fed President Austan Goolsbee voicing concerns about keeping rates "too high for too long."

Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards

Influential investor Bill Ackman is among those now betting the Fed will start cutting rates earlier than expected, saying the move could come as soon as the first quarter.

Bonds extended gains fueled by dovish comments, with the 10-year Treasury yield (^TNX) — which moves inversely to prices — dropping about 6 basis points to around 4.27%, its lowest since September.

A fresh reading on US third quarter GDP showed the US economy grew at a 5.2% annualized rate last quarter, revised up from the previous reading of a 4.9% pace.

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  • Josh Schafer

    Stocks close mixed

    Stocks were a mixed bag on Wednesday as investors digested the possibility of the Federal Reserve cutting interest rates sooner than many had anticipated and updated data showed the US economy grew more quickly than previously reported in the third quarter.

    The Dow Jones Industrial Average (^DJI) served as the biggest gainer barely finishing above the flat line, while the benchmark S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) fell about 0.1%.

    Interest rate sensitive sectors led the gains on Wednesday with Real Estate (XLRE) and Financials (XLF) both finishing up about 0.7%.

  • Josh Schafer

    The 'FOMO' trade is ripping

    The more speculative areas of the stock market are back in action.

    Across the market, areas that have lagged for much of the past year as investors have worried about higher interest rates have ripped higher through November.

    The S&P regional bank index (KRE) is up more than 16% this month, including a more than 2% gain on Wednesday. Cathie Wood's flagship Ark Innovation ETF (ARKK) entered the month up a little over 10% on the year. It's now risen more than 50% in 2023. Meme stocks are soaring too, with the broad Roundhill Meme ETF (MEME) up 24% in November and meme stock favorite GameStop rising over 20% on Wednesday alone.

    "Traders have decided that even though it’s still earning nearly 5%, cash is trash compared to quick profits in a wide variety of risk assets," Interactive Brokers chief strategist Steve Sosnick wrote in a research note on Wednesday.

    Sosnick adds that the root of what he described as a fear of missing out, or "FOMO" rally, is the "expectation that rates will be coming down, and that is indeed a solid reason for a rise in risk assets."

    But that doesn't mean there aren't still risks to the current market narrative.

    "My concern is that stock traders have become more enamored about the prospect of cuts without fully considering the why," Sosnick wrote. "If we do get a soft landing, why would the Fed be willing to cut as early as May? They would need to see sustained 2% inflation. Considering we’re not there yet, that seems premature."

  • Josh Schafer

    Interest rate sensitive sectors lead the way

    Investors are increasingly betting the Federal Reserve will cut interest rates sooner than many initally thought.

    Markets are now pricing in a 78% chance of an interest rate cut by the end of the Fed's May meeting. A month ago, markets had priced just a 41% chance of a cut in the same time period, per the CME FedWatch Tool.

    That's being reflected in today's stock market action, too. Interest rate sensitive sectors such as Real Estate (XLRE) and Financials (XLF) are leading the benchmark S&P 500 (^GSPC).

    Below is a look at the sector action for Wednesday as of about 3:20 p.m. ET.

  • Alexandra Canal

    Netflix's gaming push

    Netflix (NFLX) announced Wednesday it plans to offer the "Grand Theft Auto" trilogy — one of Take-Two Interactive's (TTWO) most popular video games — as it looks to boost its video game ambitions.

    "Grand Theft Auto: The Trilogy – The Definitive Edition" will arrive on the platform Dec. 14 for Netflix subscribers on the App Store, Google Play, and in the Netflix mobile app. Fans can preregister beginning on Wednesday.

    The trilogy adds to Netflix's growing catalog of more than 80 mobile games, with more expected. Netflix shares traded flat on the news.

    "Games is a huge entertainment opportunity," Netflix co-CEO Greg Peters said on the company's earnings call last month. "We're talking about $140 billion worth of consumer spend on games outside of China and outside of Russia. And from a strategic perspective, we believe that we can build games into a strong content category, leveraging our current core film and series by connecting members, especially members that are fans of specific IPs, with games that they will love."

    The "Grand Theft Auto" series is one of the most iconic titles in gaming. Publisher Take-Two Interactive said the franchise, which includes "Grand Theft Auto III," "Grand Theft Auto: Vice City," "Grand Theft Auto: San Andreas," "Grand Theft Auto IV," and "Grand Theft Auto V," has sold more than 410 million units as of the company's latest earnings report.

    The latest game, "Grand Theft Auto V," was the fastest retail property to reach $1 billion in sales. "Grand Theft Auto Online," an offshoot of "Grand Theft Auto V," continues to generate millions of dollars for the publisher.

    The announcement comes as Take-Two prepares for the release of the first trailer for the highly anticipated "Grand Theft Auto VI" in December. The full game is expected to hit stores sometime in 2024.

    Read more here.

  • Alexandra Canal

    Stocks trending in afternoon trading

    Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Wednesday:

    General Motors (GM): Shares of GM surged 10% after the automaker announced a new $10 billion stock buyback plan, in addition to a 33% dividend increase. In an interview with Yahoo Finance's Brian Sozzi, GM CEO Mary Barra said the announcements demonstrate "our confidence in our strategy and ability to grow, generate cash flow as well as strong margins." She reiterated a plan for GM to hit a low-single-digit profit margin on EV operations by the end of 2025, and be mostly producing electric vehicles by 2035. Shares of competitor Ford (F) also climbed higher on Wednesday, up about 3%.

    Gamestop (GME): Shares of the meme darling soared more than 25% on the heels of reports that an increasing number of bets have been placed on a call option for GameStop stock to hit $20 per share by Dec. 8. As Yahoo Finance's Josh Schafer reports, GameStop is the latest speculative trade to enter the November 2023 stock market rally as beaten-down areas of the market like cryptocurrency-related stocks and other meme names see a rebound.

    Crowdstrike (CRWD): Shares jumped 10% after the cloud security company reported a beat on both the top and bottom lines. The company also hit a new milestone with annual recurring revenue, or ARR, increasing 35% year over year to surpass the coveted $3 billion mark.

    Cigna (CI): Shares dropped 7% on reports the health insurance company plans to merge with Humana in what would be a blockbuster merger in the insurance space. According to the Wall Street Journal, the companies are discussing a stock-and-cash deal that could be finalized by the end of this year. Humana (HUM) shares dipped about 3%.

  • Josh Schafer

    GameStop soars more than 20%

    GameStop (GME) stock is ripping higher again.

    Shares in the video game retailer rose more than 20% on Wednesday, and is now up more than 35% in the last five days.

    The move comes as reports have swirled that an increasing number of bets have been placed on a call option for GameStop stock to hit $20 per share by Dec. 8.

    GameStop is the latest speculative trade to enter the November 2023 stock market rally as beaten-down areas of the market like cryptocurrency-related stocks and other meme names see a rebound.

    The move to a more risk-on trade in markets comes as investors have interpreted a string of economic data showing cooling pricing pressures combined with a slowdown in the labor market to mean the Federal Reserve is done raising interest rates.

    "'Meme stocks' tend to be unprofitable so they especially benefit from lower rates since they have an even greater need to raise capital at reasonable prices," explained DataTrek co-founder Jessica Rabe in a note on Nov. 20.

    Rabe added: "Meme stocks' current positive momentum shows investors' animal spirits are starting to run hot again."

    Read more here.

  • Josh Schafer

    Corporate America pays tribute to Charlie Munger

    Yahoo Finance's Brian Sozzi spoke with multiple company executives about what Charlie Munger meant to them following Munger's death on Tuesday.

    Below is a roundup of some of the commentary:

    Costco (COST) CEO Craig Jelinek (Munger was a longtime board member of Costco)

    "He was a legend to me. A tremendous asset to Costco."

    American Express CEO Steve Squeri (Amex is a longtime holding of Berkshire)

    "My thoughts are with Charlie Munger’s family, my friend Warren Buffett, and everyone at Berkshire Hathaway — the iconic company they built together. Charlie was a legendary investor, and his philosophy of investing in great businesses that could stand the test of time will continue to be emulated for generations to come."

    Coca-Cola CEO James Quincey (Coke is a longtime holding of Berkshire)

    "Charlie was exceptional; he was a savvy business mind whose innovative insights left an indelible mark and genuinely made our world better."

    Bank of America CEO Brian Moynihan (BofA has long been a holding of Berkshire)

    "Charlie Munger was a legendary figure in the investment community. There are many who benefited greatly from his wisdom."

    Yahoo Finance also compiled some of Munger's most memorable quotes here.

  • Josh Schafer

    General Motors stock soars on boosted divided

    General Motors (GM) stock popped about 10% on Monday after launching its largest ever share buyback program.

    The automotive company will boost its dividend by 33% and repurchase $10 billion of shares.

    "It's about us not only being profitable, but generating strong cash flow from a combustible and EV business, and growing software business," GM CEO Mary Barra told Yahoo Finance Live. "It's demonstrating our confidence in our strategy and ability to grow, generate free cash flow, as well as strong margins."

  • Josh Schafer

    Third quarter GDP revisions further "Goldilocks" narrative for US economy

    Growth in the US economy continues to surprise to the upside while inflation declines.

    New data from the Bureau of Economic Analysis revealed the US economy grew at a 5.2% annualized pace in the third quarter, revised up from the 4.9% reported in the advance estimate a month ago.

    The quarterly reading for Personal Consumption Expenditures (PCE) showed core prices, which exclude volatile categories like food and energy, grew at a 2.3% pace during the third quarter, down from an initial reading of 2.4%. The release showed inflation continues to cool toward the Federal Reserve's long-run goal of 2% inflation.

    Raymond James' chief economist Eugenio Aleman described the print as a "Goldilocks scenario," meaning the economy is growing at a solid pace but not so fast that the Fed needs to worry that it will be an upside risk to inflation.

    That reading comes as recent commentary from Fed governor Christopher Waller has investors believing interest rate cuts could come sooner than initially expected. Waller said there was "no reason" that rates must stay "really high" if inflation keeps declining consistently.

    "Perhaps [Wednesday's revision] was the reason why several Fed speakers have been relatively dovish lately and will probably cement the market’s conviction that the Fed is done increasing interest rates this cycle," Aleman wrote in a research note Wednesday. "This is good news for the economy and for the markets."

  • Josh Schafer

    Stocks open higher as yields fall

    Stocks opened higher on Wednesday, as a fresh reading of Gross Domestic Product showed the US economy grew at a faster than previously reported pace in the third quarter and commentary from Fed officials hinted that rate cuts may be coming sooner than markets initially thought.

    The Dow Jones Industrial Average (^DJI) rose nearly 0.2%, while the benchmark S&P 500 (^GSPC) popped about 0.5%. The tech-heavy Nasdaq Composite (^IXIC) was up about 0.7% after the three stock gauges closed higher Tuesday to resume their November rally.

    Bonds extended gains fueled by dovish comments, with the 10-year Treasury yield (^TNX) — which moves inversely to prices — dropping about 6 basis points to around 4.28%, its lowest since September.

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