Wall Street's Mixed Signals: Nasdaq's Milestone & Economic Uncertainties

Wall Street indices showed variability as investors weighed economic data before a pivotal Federal Reserve meeting. Despite a Nasdaq landmark and tech stock rally, concerns over labor market and inflation emerged. Market responses linger around a 25-basis-point reduction, amidst anticipation of future policy pauses.

Wall Street experienced fluctuations on Thursday as investors carefully analyzed significant economic indicators ahead of next week's Federal Reserve meeting. The Nasdaq broke the 20,000 mark for the first time on Wednesday, driven by a continuous surge in technology stocks.

The S&P 500 reached its highest point in almost a week following an inflation report that met expectations, solidifying market speculations of a 25-basis-point rate cut during the Fed's upcoming Dec. 17-18 meeting. However, initial U.S. unemployment claims rose unexpectedly last week, sparking concerns about labor market robustness.

U.S. producer prices increased beyond forecasts in November, but a slowdown in service costs suggested a prolonged disinflationary trend. Investor focus remains on the Fed's impending decision and its implications for inflation. Despite optimism, profit-taking ensued after Nasdaq's record high, as trader confidence in the anticipated rate cut stands at over 98%, per CME's FedWatch Tool. However, some foresee a policy pause in January given the economy's resilience and caution urged by several Fed officials.

(With inputs from agencies.)