S&P futures are down 0.1% Wednesday morning, near session lows, following Tuesday’s decline where the S&P and Nasdaq both fell over 1% in their worst session since December 18. Asian markets were mostly weaker overnight, with Hong Kong lagging, while Australia and South Korea posted gains. European markets are up ~0.2%. Treasuries are weaker with curve steepening, and the 10-year yield remains above 4.50%, flagged as a headwind for equities. The dollar index is up 0.5%, gold is up 0.2%, Bitcoin futures are down 0.8%, and WTI crude is up 0.3%.
Key focus remains on rising bond yields, driven by stickier inflation, firmer growth, and supply dynamics, along with ongoing concerns about Trump 2.0 trade policies and weak market breadth. Positive sentiment centers on AI optimism, January inflows, M&A activity, and LDD% earnings growth expectations.
ADP private payrolls and initial claims are highlights on today’s economic calendar, with December FOMC minutes released this afternoon. Treasury will auction $22B in 30-year bonds. Stock markets are closed Thursday for Carter’s state funeral, but bond markets will remain open. December jobs data and the University of Michigan survey close out the week on Friday.
In corporate news, XOM flagged potential Q4 EPS downside from weaker upstream and chemicals performance. FLUT issued a negative preannouncement due to unfavorable US sports results. CALM posted strong Q2 results on higher demand and pricing. AZZ and AIR reported upbeat earnings and raised guidance, citing strong fundamentals. GT will sell its Dunlop brand to Sumitomo for $701M. Overseas, Samsung missed Q4 operating profit estimates on higher R&D and advanced chip manufacturing costs. Upcoming earnings include DAL, STZ, and WBA on Friday.
US equities closed lower on Tuesday, with the Dow down 0.55%, S&P 500 falling 1.17%, Nasdaq dropping 1.92%, and Russell 2000 off 1.09%. The S&P posted its worst session since November 12, and the Nasdaq had its steepest decline since November 15. Growth stocks faced significant pressure, reversing Monday’s gains. Treasuries weakened with bear steepening, pushing the 10-year yield to its highest since April 2024. The dollar index rose 0.4%, while gold gained 0.7%. Bitcoin futures fell 6.4%, dropping below $100K, and WTI crude closed up 0.9%.
Hawkish macro data drove yields and the dollar higher, tightening financial conditions. November JOLTS data showed higher-than-expected job openings, but the quits rate tied for its lowest since mid-2020. December ISM Services beat estimates on business activity and new orders but showed an increase in prices paid, the highest in 22 months. Fed commentary leaned hawkish, with Barkin signaling potential rate increases if price pressures persist. Bostic urged caution, citing uneven inflation progress. Treasury auctions included a $39B sale of 10-year notes, with a $22B 30-year bond auction scheduled for Wednesday.
Sector News
Information Technology
- Aurora Innovation (AUR-US): Gained 29.1% after announcing a partnership with NVIDIA (NVDA-US) and Continental to scale driverless truck deliveries.
- NVIDIA (NVDA-US): CEO Jensen Huang’s CES keynote showcased new AI products and partnerships, including with Uber (UBER-US) and Aurora.
- Micron Technology (MU-US): Rose 2.7% as NVDA highlighted Micron’s role in providing memory for its new GeForce RTX 50 Blackwell chips.
- Datadog (DDOG-US): Fell 3.2% following a downgrade to hold at Truist, citing valuation concerns.
- Palo Alto Networks (PANW-US): Declined 2.2% after Guggenheim downgraded to sell, highlighting a decline in new ARR and softening federal IT spend.
Healthcare
- Stryker (SYK-US): Dropped 1.7% after announcing the $4.9B acquisition of Inari Medical (NARI-US), representing a 23% premium to Monday’s close.
- Inari Medical (NARI-US): Jumped 22.2% on the acquisition news, expected to close by the end of Q1 2025.
Consumer Discretionary
- Tesla (TSLA-US): Lost 4% following a downgrade to neutral by BofA, citing elevated execution risks and the stock’s valuation.
- Bloomin’ Brands (BLMN-US): Down 5.9% after Barclays downgraded to equal weight, citing flat unit growth and competitive pressures.
Industrials
- UniFirst (UNF-US): Surged 20.9% after Cintas (CTAS-US) proposed acquiring the company for $275/share, a 62% premium.
- Cintas (CTAS-US): Gained 2% on the news of its proposal.
- Old Dominion Freight Line (ODFL-US): Fell 1.1% after a downgrade to neutral at Susquehanna, which also cited reduced LTL volume forecasts for SAIA and XPO.
Energy
- Phillips 66 (PSX-US): Announced a $2.2B acquisition of EPIC Y-Grade assets.
Communication Services
- Getty Images (GETY-US): Jumped 24.1% on news of a merger with Shutterstock (SSTK-US), creating a combined company valued at $3.7B.
- Shutterstock (SSTK-US): Increased 14.8% following the merger announcement.
- Carvana (CVNA-US): Rose 5% after RBC upgraded to outperform, citing valuation and sustainable GPU levels.
Financials
- Bank of America (BAC-US): Gained 1.5% after upgrades to buy from UBS and Truist, highlighting benefits from deregulation and higher-for-longer rates.
- Paycor HCM (PYCR-US): Dropped 3% after confirming its acquisition by Paychex (PAYX-US) for $22.50/share, representing a 1.5% discount to its prior close.
- Paychex (PAYX-US): Fell 2.4% on the acquisition news.
Materials
- Apogee Enterprises (APOG-US): Declined 19% despite better Q3 earnings, as Architectural Glass demand and backlog fell.
- Commercial Metals (CMC-US): Rose 3.2% after reporting in-line Q1 earnings and noting resilient North America demand.
Eco Data Releases | Wednesday January 8, 2025
S&P 500 Constituent Earnings Announcements | Wednesday January 8, 2025
No constituents report today
Data sourced from FactSet Research Systems Inc.
