Stock market overview for December 10: SP500 and NASDAQ close mixed

[Ben Graham]

At the end of yesterday's trading session, stock indices closed mixed. The S&P 500 fell by 0.09%, while the Nasdaq 100 rose by 0.13%. The Dow Jones Industrial Average decreased by 0.38%.

Asian stock indices showed a mixed performance as investors await further guidance regarding the Federal Reserve's position in its final interest rate decision of the year. Shares of Chinese real estate companies rose amid optimism about potential government support. US equity futures remained virtually unchanged. Silver continued its upward trajectory, while Australian bonds saw increased selling pressure following a hawkish central bank decision on Tuesday. The price of US Treasury bonds remained stable after a decline on Tuesday when data revealed that job openings in the US reached their highest level in five months in October.

Today, traders are anticipating a third consecutive interest rate cut from the Fed, with a particular focus on the central bank's latest dot plot, economic forecasts, and comments from Chairman Jerome Powell. Volatility surrounding this decision has become a defining characteristic of stock trading recently, overshadowing concerns about a potential artificial intelligence bubble and the impact of trade policies from former President Donald Trump.

Market participants are closely monitoring how the Fed will balance the need to curb inflation while avoiding a slowdown in economic growth. On one hand, persistent inflation, although decreasing, still remains above the Fed's target level of 2%, indicating the necessity for continued restrictive monetary policy. On the other hand, the economy is showing signs of slowdown, and a further pause in accommodative policy could exacerbate the situation, potentially leading to a recession. The dot plot, which graphically represents the forecasts of individual members of the Fed's Open Market Committee regarding the future trajectory of interest rates, will be crucial in shaping market sentiment. If the plot indicates a more aggressive stance than expected, it could trigger a sell-off in stocks and an increase in bond yields. Conversely, if the dot plot suggests that the Fed is leaning towards a more dovish policy, it could spark a stock market rally.

As previously noted, shares of Chinese real estate companies surged on Wednesday amid expectations of stimulus measures from Beijing and hopes for progress in debt negotiations involving China Vanke Co. The index of Chinese property developers jumped by more than 4%, while Vanke shares, which have garnered investor attention due to delayed bond payments, soared by 19%.

Silver continued its rise after surpassing $60 per ounce for the first time on Tuesday. The momentum was fueled by supply shortages and forecasts of further easing in Fed monetary policy. The price of the white metal climbed by 1.6% to a record high of $61.6145 per ounce.

Oil experienced its largest two-day decline in a month, as concerns over a global oversupply continued to weigh on sentiment.

Regarding the technical outlook for the S&P 500, the primary objective for buyers today will be to overcome the nearest resistance at $6,854. Doing so would help indicate growth and open up the opportunity for a surge to a new level at $6,874. Another priority for bulls will be to maintain control over $6,896, which would strengthen their positions. Should there be a downward movement due to a decrease in risk appetite, buyers must assert themselves around $6,837. A breakdown could quickly push the trading instrument back to $6,819 and pave the way towards $6,792.

The material has been provided by InstaForex Company - www.instaforex.com