Silver Rockets Past $89 As Markets Digest Soft CPI And Mixed Earnings
MarketDash
Wall Street barely budged Tuesday despite inflation data that keeps Fed rate cuts on the table. A tepid earnings season kickoff and a stunning silver surge to $89 an ounce kept traders cautious even as major indices hovered near record highs.
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Markets had every reason to celebrate Tuesday. Inflation came in tame, the S&P 500 sat within spitting distance of a record high, and crude oil rallied for a fourth straight day. Yet Wall Street couldn't quite muster the enthusiasm, trading sideways as earnings season delivered its first round of mixed results.
The Consumer Price Index for December rose 2.7% year-over-year, matching both the November reading and economist forecasts. Core CPI, which strips out volatile food and energy prices, came in at 2.6% annually, actually landing slightly below expectations. It's the kind of benign inflation report that keeps Federal Reserve rate cuts firmly on the table for later in 2024.
But if stocks were taking a breather, commodities certainly weren't. Silver continued its remarkable run, jumping 4.5% to hit $89 an ounce as supply concerns intensified. The grey metal has now surged 22% since the start of the year, and we're barely two weeks into January. That's the kind of move that makes you wonder what traders know that the rest of us don't.
By midday in New York, the S&P 500 sat essentially flat at 6,970, tantalizingly close to Monday's record high of 6,986. The Dow Jones Industrial Average dropped 0.5%, weighed down by financial stocks having a rough day. The tech-heavy Nasdaq 100 managed a modest 0.1% gain thanks to strength in semiconductors, while the Russell 2000 added 0.2%. Small caps are now eyeing their seventh positive session in the past eight, which is the kind of streak that gets overlooked when you're focused on the big names.
Sector action told a clearer story. The Energy Select Sector SPDR Fund (XLE) outperformed with a 1.5% gain as crude prices climbed, while the Financial Select Sector SPDR Fund (XLF) lagged badly, down 1.8%. That financial sector weakness set the tone for some of Tuesday's biggest individual stock moves.
Earnings Season Opens With A Whimper And A Bang
JPMorgan Chase & Co. (JPM) learned the hard way that beating earnings estimates isn't always enough. Shares fell more than 3% despite solid numbers, as investors fixated on weaker investment banking fees and cautious management commentary around loan growth. When you're the bellwether bank, people parse every word for clues about the broader economy.
Delta Air Lines Inc. (DAL) had an even rougher day, sliding over 4% after issuing soft forward guidance. The culprits? Cost pressures and what the company called normalization in post-pandemic travel demand, which is corporate speak for "people are done paying crazy prices for plane tickets." The weakness spread across airline stocks broadly, as investors worried about margin compression.
On the flip side, Moderna Inc. (MRNA) emerged as the S&P 500's top performer, rallying 14% after the biotech company issued bullish growth forecasts for its vaccine business. After a tough stretch, Moderna investors finally had something to cheer about.
Chip Stocks Get An Analyst Boost
The semiconductor space got a jolt from KeyBanc analyst upgrades. Intel Corp. (INTC) surged 7.7% to $47.50 after KeyBanc upgraded the stock from Sector Weight to Overweight with a $60 price target. Advanced Micro Devices Inc. (AMD) jumped 6.5% on a similar upgrade to Overweight, this time with a $270 price target. Both moves reflect growing analyst confidence in the chip sector's recovery trajectory.
Energy stocks had their day in the sun as well, with broad gains across U.S. oil and gas names. West Texas Intermediate crude rose 2.7% to above $61 a barrel, hitting a three-month high on its fourth consecutive session of gains. When crude gets momentum like this, energy stocks tend to follow along for the ride.
Even Bitcoin (BTC) joined the party, advancing 2.5% to above $93,000 and eyeing a third straight session of gains. Risk appetite, it seems, is alive and well in certain corners of the market.
Tuesday's trading session was a reminder that markets don't need drama to be interesting. Solid inflation data, record-high proximity, and a commodity market gone wild provided plenty of fodder, even if stocks themselves couldn't pick a clear direction. As earnings season continues, expect more of this push and pull between optimism and caution.
