US equity indexes declined as a movement in government bond yields drew investors' focus toward the dot plot anticipated next week, dampening risk sentiment following Broadcom's impressive rally. The S&P 500 fell 0.1% to 6,043.1, while the Nasdaq Composite also dropped 0.1% to 19,876.2, and the Dow Jones Industrial Average decreased 0.2% to 43,829.3. In premarket trading on Friday, the Nasdaq had gained about 175 points, and both the Dow and the S&P 500 experienced increases following Broadcom's fiscal Q4 results released overnight.
Morgan Stanley raised its price target on Broadcom to $233 from $180, sustaining its overweight rating. The investment firm indicated that the chip manufacturer remains “one of the most compelling ways” to invest in AI semiconductors over the next two to three years. Broadcom shares soared by 20% intraday, leading the gainers on both the S&P 500 and the Nasdaq.
Meanwhile, the 10-year US Treasury yield was on track for its fifth consecutive day of increases this week, surging by 6.7 basis points to 4.39% intraday. Investors are closely monitoring the 4.5% threshold for the 10-year yield ahead of the interest-rate decision expected on Wednesday. Although a hawkish rate cut is largely anticipated, interest lies in signals regarding future rates in 2025, with just two additional cuts considered for the year, as reported by Forexlive.
The Fed's dot plot, which reflects policymakers’ expectations for interest rates, is expected to provide insights into their bias and comments on the inflation outlook. In recent economic updates, US import prices experienced a modest increase of 0.1% in November, contrasting with the 0.2% decrease projected in a Bloomberg survey and a downwardly adjusted 0.1% rise in October.
Export prices remained unchanged in November, diverging from expectations for a 0.3% decline and a 1% increase seen in October. Furthermore, West Texas Intermediate crude oil futures climbed 1.5% to $71.07 a barrel..