The trader works on the site of the New York Stock Exchange (NYSE) on November 8, 2021.
Brendan McDermid | Reuters
Markets were closed on Thursday for Thanksgiving, so stocks rallied slightly on Wednesday, halting weekly losses for the S&P 500 and the Nasdaq Composite.
Treasury yields rose this week, putting pressure on fast-growing stocks. The Nasdaq fell 1.3% on the week, while the S&P 500 rallied less than 0.1% and the Dow gained about 0.6%.
The final weeks of the year are usually a strong time for the market, as the so-called Santa Claus Rally usually creates happy holidays for Wall Street. The S&P 500 is up 25% since the beginning of the year.
Friday also marks the unofficial start of the holiday shopping season as investors seek information from Black Friday to gauge consumer sentiment in the US.
During this reporting season, retail stocks have shown sharp shifts in both directions. Gap and Nordstrom were down more than 20% on Wednesday, but Kohl’s jumped more than 10% a week ago after reporting strong gains in sales.
Retail executives talked during the quarter about how they are tackling supply chain and inflation issues. It is also unknown if the discussion of supply chain issues prompted consumers to start shopping for holiday shopping earlier, which could lower sales in the fourth quarter.
“I would not be surprised if this dynamic occurs during the holiday season,” said Sarah Henry, portfolio manager at Logan Capital Management. She added that her firm is looking for companies with long-term strategic advantages rather than betting on better sales during the holidays.
Several strong economic reports were also released Wednesday, with October personal income and consumer spending exceeding expectations, and initial jobless claims hit their lowest level since 1969. Nonetheless, Core PCE, the Fed’s preferred inflation indicator, remained elevated at 4.1%.
There are no major economic releases scheduled for Friday. The stock market will close at 1:00 pm ET Friday for the holiday weekend.