If you're looking for signs that market anxiety is easing, Monday offered a bit of encouragement. The CNN Fear & Greed Index climbed to 50.3, officially entering "Neutral" territory after hanging out in fear mode at 42.2. Not exactly euphoria, but progress nonetheless.
Stocks themselves told a more mixed story. U.S. markets closed lower Monday, with the Nasdaq Composite shedding more than 100 points, down 0.59% to 23,057.41. The S&P 500 slipped 0.16% to 6,816.51, while the Dow Jones edged down about 41 points to 48,416.56. Last week's performance was equally split—the S&P 500 lost 0.6% while the 30-stock Dow managed to gain 1.1%.
The real action, though, might be happening Tuesday. Traders are laser-focused on the release of official October and November payroll data, along with October retail sales figures. These numbers matter because they'll give the Federal Reserve fresh ammunition (or reason to hold fire) as it calibrates its next moves on interest rates.
Speaking of the Fed, the rate cut party appears to be winding down. According to Fed futures, markets are assigning just a 24% probability to another 25-basis-point cut in January. For all of next year, investors are broadly pricing in only two cuts total. That's a notable shift from the more aggressive cutting expectations we saw earlier this year.
Winners and Losers
Among mega-cap stocks, Tesla Inc. (TSLA) continued its impressive run, climbing around 4% Monday. That marks the 12th gain in the past 15 sessions, pushing shares near the record highs last seen in December 2024. Whatever Elon's doing, shareholders are eating it up.
On the flip side, Zillow Group Inc. (Z) (ZG) got hammered, sliding about 8%. The culprit? Reports that Alphabet Inc. (GOOGL) (GOOG) is testing a new real estate advertising format. When Google decides to play in your sandbox, it's rarely good news for the incumbents.
Economic data added to Monday's mix of news. The NY Empire State Manufacturing Index plunged to -3.9 in December, a sharp reversal from November's one-year high of 18.7 and well below market estimates of 10. That's a notable cooling in manufacturing sentiment in New York.
Sector performance was all over the map. Most sectors on the S&P 500 actually closed positive, with energy, health care, utilities, and consumer discretionary stocks posting the biggest gains. But energy and information technology stocks went against the grain, ending the session lower.
What's Next
Investors are keeping an eye on earnings results due today from Duluth Holdings Inc (DLTH), Worthington Enterprises Inc (WOR), and Lennar Corp (LEN).
Understanding the Fear & Greed Index
The Fear & Greed Index operates on a simple premise: excessive fear tends to push stock prices down, while excessive greed does the opposite. It's calculated using seven equal-weighted indicators and ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness. Monday's reading of 50.3 puts the market right in the middle—neither terrified nor exuberant, just sort of... waiting to see what happens next.
