Wall Street Steady as Warner Bros. Battle Escalates/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stock markets hovered near all-time highs Monday as investors awaited the Federal Reserve’s interest rate decision. Meanwhile, shares of Warner Bros. Discovery surged following Paramount’s hostile bid, intensifying competition with Netflix. Broader market moves remained quiet apart from select merger-driven gains.
Wall Street Warner Bros. Battle Quick Looks
- S&P 500 sits just 0.3% below record
- Nasdaq rises 0.3%, most stocks slightly down
- Warner Bros. Discovery jumps 7.8% on Paramount bid
- Paramount offers $30 per share in cash
- Netflix’s cash-and-stock offer faces regulatory scrutiny
- Trump calls Netflix deal “a problem” for market share
- IBM to acquire Confluent in $11 billion data deal
- Carvana, CRH, Comfort Systems to join S&P 500
- LKQ, Solstice, Mohawk move to S&P SmallCap 600
- Fed rate decision expected Wednesday, focus on 2026 guidance
Deep Look: Wall Street Stays Strong as Fed Decision, Warner Bros. Merger Take Center Stage
NEW YORK — Wall Street hovered just below record highs on Monday as investors kept a close eye on upcoming interest rate signals from the Federal Reserve and the intensifying competition to acquire Warner Bros. Discovery.
The S&P 500 was nearly flat in early trading but remained just 0.3% shy of its all-time peak set in October. The Nasdaq Composite inched up by 0.3% as of 9:38 a.m. Eastern, continuing its recent gains. While the broader market showed little movement, a handful of stocks saw sharp reactions to corporate developments.
Warner Bros. Discovery surged 7.8% after Paramount made a direct pitch to its shareholders with a hostile takeover offer valued at $74.4 billion, or $30 per share in cash. The move is a bold challenge to Netflix, which had reached a $72 billion cash-and-stock agreement with Warner Bros. just days earlier.
Paramount is positioning its offer as both more generous and more straightforward, emphasizing a quicker payout and fewer regulatory obstacles. In contrast, Netflix’s deal is already drawing scrutiny from antitrust watchers. President Donald Trump added political weight to the conversation on Sunday, stating that the Netflix-Warner Bros. merger “could be a problem” due to concerns over market concentration.
Paramount’s move not only raised Warner Bros. shares but also lifted Paramount Skydance, which rose 2.7%. Netflix, however, slipped 2.4% as investors weighed the growing likelihood of a bidding war and extended regulatory delays.
Outside the entertainment sector, IBM made headlines by announcing an $11 billion deal to acquire Confluent, a data platform company. IBM said the acquisition would improve clients’ ability to use artificial intelligence tools more effectively. Shares of Confluent soared 28.7%, while IBM added 1.8%.
Carvana, the online used car retailer, jumped 6.9% after learning it would join the S&P 500 on December 22. The move is significant, as index inclusion often triggers automatic buying from fund managers who mirror the S&P. CRH, a building materials company, gained 5.3%, and Comfort Systems USA, a mechanical and electrical services provider, rose 0.8% after also being named to the index.
Those companies will replace LKQ, Solstice Advanced Materials, and Mohawk Industries, which will be moved to the S&P SmallCap 600 after a drop in market capitalization.
Aside from those high-profile moves, the rest of the market was relatively quiet, with traders awaiting a key announcement from the Federal Reserve on Wednesday. The central bank is expected to signal whether it will cut interest rates for the third time this year.
Markets have rallied in recent weeks on growing expectations that the Fed may ease its monetary policy. Lower interest rates generally help boost economic growth and increase investment in risk assets like stocks. However, they also risk fueling inflation—an issue the Fed has been trying to contain since 2022.
The big question now is what the Fed’s forward guidance will indicate for 2026. Market watchers anticipate that Fed Chair Jerome Powell and his colleagues may attempt to cool speculation about aggressive rate cuts in the coming year.
Although inflation has fallen from its post-pandemic highs, it remains above the Fed’s official 2% target. At the same time, economic growth and job market momentum are showing signs of slowing, leaving policymakers divided over the next course of action.
In the bond market, Treasury yields held steady, with the 10-year yield remaining at 4.14%, unchanged from late Friday. Stability in yields indicates that traders are waiting for the Fed’s decision before making any major portfolio shifts.
Internationally, stock performance was mixed. Hong Kong’s index declined by 1.2%, while South Korea’s market climbed 1.3%, continuing the recent volatility in Asian markets.
As Wall Street nears the end of the year, the combination of a blockbuster corporate acquisition battle and a crucial central bank decision is likely to set the tone for the weeks ahead.
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