Wall Street pressured by rising bond yields; Broadcom surges

Reuters

Wall Street pressured by rising bond yields; Broadcom surges

Dec 13, 2024 at 5:12 pm GMT

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Broadcom jumps as it forecasts Q1 revenue above estimates

S&P, Dow set for weekly declines, Nasdaq on track for gains

Indexes: Dow up 0.01%, S&P 500 off 0.09%, Nasdaq down 0.20%

Updates with mid-session trading

By Purvi Agarwal and Shashwat Chauhan

Dec 13 (Reuters) -Wall Street's main indexes were muted in choppy trading on Friday as yields on government bonds ticked up, whilean upbeat forecast from Broadcom kept alive the euphoria around artificial intelligence.

Broadcom AVGO.O forecast quarterly revenue above Wall Street estimates and predicted booming demand for its custom AI chips in the next few years, sending its shares up nearly 19%. This also helped the company cross a market capitalization of $1 trillion for the first time.

Chip stocks were mixed, with Broadcomrival Marvell Technology MRVL.O rising 8.4%, while AI bellwether Nvidia NVDA.O reversed gains and was last down 2.8%. Yet, a gauge for semiconductor stocks .SOX added 2.3%.

Yields on U.S. Treasuries rose across the board, with ones on the benchmark 10-year bond US10YT=RR hitting a three-week high. It was last at 4.3770%.

"The market is just digesting going into year-end. It's been a really good year with the large-cap equity markets .... we could see it trading just kind of sideways till the end of the year," said Dustin Thackeray, chief investment officer at Crewe Advisors.

Technology stocks haverallied recently, propelling the Nasdaq above the 20,000 mark for the first time on Wednesday. An in-line inflation reading cementing a 25-basis-point cut from the Federal Reserve next week added to the momentum.

Trader bets on the cut at the central bank's Dec. 17-18 meeting stand at near 97%, according to CME's FedWatch Tool. However, they indicate chances of a pause in January.

"We have 25 bps baked in for next week, but the inflation data this week was a little bit of a mixed bag with the PPI numbers that came out. I would not be surprised at all if they start to set the table for a pause in January," said Thackeray.

At 11:46 a.m. ET, the Dow Jones Industrial Average .DJI rose 6.21 points, or 0.01%, to 43,920.33, the S&P 500 .SPX lost 5.33 points, or 0.09%, to 6,045.92 and the Nasdaq Composite .IXIC lost 40.56 points, or 0.20%, to 19,862.28.

Wall Street had taken a breather in the previous session after recent gains and some hot economic data ahead of the Fed's meeting, setting the benchmark S&P 500 and the Dow for weekly losses. However, the Nasdaq was on track to end the week higher.

U.S. stocks have climbed to all-time highs multiple times this year, as investors flocked to heavyweight tech stocks to capitalize on the hype around AI.

Another tailwind recently has beenDonald Trump's win in the presidential election as markets bet his business-friendly policies could enhancecorporate profits.

Among other movers, RH RH.N jumped 15.5% after the home furnishings retailer reported higher net revenue for the third quarter, compared with a year ago, while D.R. Horton DHI.N eased 1.2% as J.P. Morgan downgraded its rating on the homebuilder to "underweight".

Declining issues outnumbered advancers by a 2.16-to-1 ratio on the NYSE and by a 2.13-to-1 ratio on the Nasdaq.

The S&P 500 posted eight new 52-week highs and 15 new lows, while the Nasdaq Composite recorded 56 new highs and 155 new lows.

Broadcom revenue https://reut.rs/3ZRtsh0

Most S&P 500 sectors set for weekly losses https://tmsnrt.rs/3BnGklv

Reporting by Purvi Agarwal and Shashwat Chauhan in Bengaluru; Editing by Maju Samuel

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