Investing.com – Market Summary

The S&P 500 closed higher on Monday, buoyed by a strong tech performance, particularly in semiconductor stocks.

At 4:00 ET (21:00 GMT), the Dow Jones Industrial Average rose by 67 points (0.2%), the S&P 500 index increased by 0.7%, and the NASDAQ Composite gained 1%.

The New York Stock Exchange will close early on Tuesday for Christmas Eve, with the market shut on Christmas Day.

Tech Rides Rally in Chips Higher

Tech stocks led the market climb, spurred by a rally in chipmakers such as Broadcom, Nvidia (NASDAQ:NVDA), and Qualcomm.

Broadcom Inc (NASDAQ:AVGO) saw its stock rise by 5% as it built on a more than 40% increase this month, following strong quarterly results and optimistic guidance.

Qualcomm (NASDAQ:QCOM) shares increased over 3% after a jury ruled that its central processors are properly licensed under an agreement with UK-based Arm Holdings (NASDAQ:ARM), which fell by more than 3%.

Fed Interest Rate Moves Key

The PCE price index, a key measure of inflation favored by the Federal Reserve, rose by 0.1% in November, slowing from October's 0.2% increase. This brought the annual PCE inflation rate to 2.4%, slightly below the 2.5% estimate. Despite signs of easing inflation, it remains above the Fed's 2% target, indicating persistent inflationary pressures.

The Fed has indicated a cautious approach to monetary policy, emphasizing the need for progress on inflation before considering additional rate cuts. Recent comments from Fed officials revealed uncertainties about the implications of the new Trump administration policies on interest rates, resulting in forecasts for fewer rate cuts in 2025 compared to prior expectations.

The Fed cut rates by 25 basis points last Wednesday but now predicts only two cuts in 2025, down from an earlier forecast of four cuts.

Rumble Surges; Crypto Stocks Follow Bitcoin Lower

Rumble (NASDAQ:RUM) shares surged by 81% after announcing a strategic $775 million investment from cryptocurrency firm Tether.

Eli Lilly (NYSE:LLY) rose nearly 4% following FDA approval of its weight-loss drug Zepbound for obstructive sleep apnea.

In contrast, crypto-related stocks like MicroStrategy (NASDAQ:MSTR), Coinbase Global Inc (NASDAQ:COIN), and Riot Platforms (NASDAQ:RIOT) fell in response to a drop in bitcoin prices. MicroStrategy faced additional pressure after announcing a sale of 1.3 million shares to acquire 5,262 bitcoins.

Despite the recent weakness in bitcoin, Citi believes it could be temporary, projecting a favorable environment for risky assets into Q1 2024.

Contributed by Peter Nurse and Ayushman Ojha.