Nasdaq 100 and S&P500: Meta Rises, Energy Shines Ahead of CPI Report

What’s Driving the Market Today?

U.S. equities paused their recent year-end rally on Tuesday, with major indexes trading near flat as investors awaited critical inflation data set for release this week. Oracle’s disappointing earnings weighed on technology stocks, while the broader market showed a mixed sector performance. Traders are looking for clues from the upcoming Consumer Price Index (CPI) report to gauge the Federal Reserve’s next interest rate move.

Key Facts and Analysis: What Traders Need to Know Right Now

• Sector Performance Highlights

Technology stocks saw notable weakness, with the sector falling 0.59% as Oracle shares tumbled over 7% following fiscal second-quarter earnings that missed Wall Street expectations. The S&P 500 and Nasdaq Composite each fell 0.6% on Monday and traded near those levels Tuesday as Nvidia extended losses on antitrust concerns in China. Meanwhile, Meta Platforms posted a modest recovery, gaining nearly 1% after previous losses.

• Treasury Yields Rise Ahead of CPI Report

The 10-year U.S. Treasury yield climbed 3 basis points to 4.238%, while the 2-year yield rose to 4.166%. Investors are positioning ahead of November’s inflation data, which economists forecast to show a 0.3% monthly rise and a 2.7% increase year-over-year. This CPI release is expected to heavily influence the Fed’s interest rate decision at its upcoming December meeting, with markets pricing in an 86% probability of a rate cut.

• Global Developments and China Funds Retreat

China-focused ETFs pulled back Tuesday after Monday’s rally, with losses exceeding 4.5% across major funds like iShares China Large-Cap ETF (FXI). Despite the decline, the funds remain higher for the week following China’s announcement of “more proactive” fiscal and monetary policies. These developments underscore the mixed global economic signals impacting U.S. markets.

• Sirius XM and Tesla in Focus

Sirius XM shares fell over 8% as the company announced cost-cutting measures to offset “marketplace headwinds.” Tesla gained attention as Morgan Stanley raised its price target from $310 to $400, reflecting optimism about potential regulatory support for autonomous vehicle technology under the incoming U.S. administration.

• Energy and Communication Services Shine

Among S&P 500 sectors, Communication Services led gains with a 1.98% increase, buoyed by Meta Platforms. The Energy sector also rose 0.51%, supported by steady crude oil prices, highlighting investor interest in these areas as defensive plays amid market uncertainty.

Market Forecast: Where Could the Market Be Headed Next?

With inflation data on deck, markets are expected to remain in a holding pattern until the CPI report provides clarity on price pressures. A lower-than-expected inflation reading could bolster hopes for a December rate cut, driving a short-term rally. Conversely, a hotter-than-anticipated figure might heighten concerns over persistent inflation, pressuring equities, particularly in rate-sensitive sectors like technology and real estate.

For now, the market’s near-term outlook appears cautious, with a modest bearish tilt given the mixed economic signals and sector-specific weaknesses. Investors should monitor inflation data and Federal Reserve commentary for direction.

More Information in our Economic Calendar.