Gold prices dip as December rate cut bets wane; Fed, econ. data in focus
Investing.com -- The S&P 500 closed slightly lower Friday, but well off the lows of the session as investors bought the dip in AI-related stocks to spark a turnaround in tech and shrugged off concerns about waning odds of a December rate cut.
At 4:00 p.m. ET (21:00 GMT), the Dow Jones Industrial Average dropped 309 points, or 0.7%, the S&P 500 index fell 0.1%, and the NASDAQ Composite gained 0.1%.
Tech cuts losses on dip buying
Tech stocks cut losses to close in the green as investors bought the recent selloff in AI names including NVIDIA Corporation (NASDAQ:NVDA), Oracle Corporation (NYSE:ORCL) and Palantir Technologies Inc (NASDAQ:PLTR).
The rise in Nvidia just a week ahead of the chipmaker’s quarterly results that will likely serve a baromoter for health of AI demand.
Barclays in a note flagged that investor sentiment has turned largely cautious ahead of the semiconductor giant’s report after the closing bell on Wall Street on November 19.
On the earnings front, Applied Materials (NASDAQ:AMAT) warned that spending on chipmaking gear in China is anticipated to fall next year due to more stringent U.S. export controls.
The comments come after the semiconductor company flagged that its fiscal 2026 revenue faces a $600 million hit from expanded U.S. restrictions on exports of cutting-edge chip equipment to China.
On the flip side, Applied Materials noted that a rise in business expenditures on AI is likely to drive increased sales of its semiconductor gear in the second half of next year.
Elsewhere in the corporate sector, Walmart (NYSE:WMT) shares fell after the retailer announced that John Furner will become its next president and chief executive officer, succeeding longtime CEO Doug McMillon in early 2026.
Warner Bros Discovery (NASDAQ:WBD) stock rose after the Wall Street Journal reported that Paramount, Comcast and Netflix are preparing bids for the media company.
StubHub (NYSE:STUB) stock slumped after the ticket vendor’s CEO Eric Baker declined to provide guidance for the current quarter while reporting its first quarterly results since its September IPO.
December rate cut in doubt
Hawkish comments from a number of Fed speakers have prompted investors to sharply dial back their expectations for a December interest rate cut by the Federal Reserve.
Minneapolis Fed President Neel Kashkari told Bloomberg that he opposed a rate cut last month and is on the fence about December as well.
While both Alberto Musalem, president of the St. Louis Fed, and Cleveland Fed President Beth Hammack expressed concern about Fed policies becoming overly accommodative with inflation still elevated.
Markets are now pricing in a roughly 50% chance for a 25 basis point cut in December, much lower than the 67.8% chance seen last week, CME Fedwatch showed.
That said, there remains a great deal of uncertainty, with investors now seeking more cues on the impact of the nearly 43-day government shutdown.
Applications for U.S. jobless benefits eased last week, according to media reports citing state-level filings, although the drop was not viewed as big enough to bolster the case for a Fed rate cut in December.
By one calculation from Haver Analytics, which was referenced by Reuters, first-time claims for state unemployment benefits fell to a seasonally-adjusted 227,543 in the week ended on November 8. In the prior week, the number stood at 228,899.
The figure was roughly in line with estimates provided by analysts at JPMorgan, Goldman Sachs and Nationwide, Reuters said.
A separate count carried out by Bloomberg News put the claims at about 226,000.
Weekly filings are typically released by the Bureau of Labor Statistics, but these have not been published during the data blackout caused by the more than 40-day shutdown.
Peter Nurse, Ambar Warrick contributed to this article