S&P 500 and Nasdaq extend losses as markets assess US PCE data; HP, Dell slide while Urban Outfitters surges

The S&P 500 and the Nasdaq Composite extended losses on Wednesday as investors digested an in-line inflation report. 

The personal consumption expenditure index (PCE) rose in October but was above the US Federal Reserve’s preferred inflation target. 

At the time of writing, the S&P 500 was down 0.3%, while the Nasdaq Composite shed 0.8%, weighed down by NVIDIA Corporation. The Dow Jones Industrial Average was largely flat from the previous close. 

The inflation data comes after the minutes of the Fed’s last meeting were released late on Tuesday. 

According to the minutes, Fed officials said they anticipated more interest rate cuts down the line, but the pace would have to be “gradual”. 

The November trading month saw steep gains for all three benchmarks in the US. It was marked by a post-election rally after President-elect Donald Trump won the 2024 elections. 

The November trading month concludes this week with Dow Jones rising 7% so far, while both the S&P 500 and the Nasdaq Composite notching up 5% gains each. 

Trading volumes are expected to remain low for the rest of the week. Markets will be shut on Thursday on account of the Thanksgiving holiday and are scheduled to close early on Friday. 

Inflation data in line with expectations

The US’ PCE index rose by 2.3% in October on an annual basis, while it increased 0.2% from the previous month. 

Both were in line with expectations of Dow Jones analysts, according to CNBC. 

Excluding food and energy, core inflation increased 0.3% on a monthly basis for an annual reading of 2.8%. This was also in line with market projections. 

PCE data had a “muted impact on rates and equities,” Bill Northey, senior investment director at US Bank Asset Management Group told CNBC. 

HP on course for worst session in more than 4 years

Shares of HP sank 10% on Wednesday, as the company was on course for its worst day since May 2020. 

The company’s stock plunged after it issued disappointing earnings guidance for the current quarter. 

HP said it expects earnings, excluding items, to range between 70 cents per share and 76 cents per share, versus a FactSet estimate of 85 cents per share.

That came despite better-than-expected fiscal fourth-quarter revenues and in-line earnings.

Meanwhile, Dell Technologies’ shares slipped more than 12% after the PC maker said it sees fourth-quarter revenue and earnings below Wall Street expectations, CNBC reported. 

Urban Outfitters jump 

Shares of the retailer jumped more than 12% on Wednesday after the company posted positive earnings results. 

The company’s adjusted earnings were $1.10 per share, which topped the 86 cents expected by analysts at LSEG. 

Revenue came in at $1.35 billion against the projections of a slightly lower figure at $1.34 billion. 

US weekly jobless claims fall

Initial claims for unemployment benefits in the US fell by 2,000 in the week ended November 23. 

Claims stood at 213,000 for last week, as the US labor market remained resilient. Analysts at Dow Jones had expected claims to come in at 215,000. 

The positive data may make it more difficult for the US Fed to cut interest rates at its December meeting.