US stocks closed a volatile week with a flash of optimism as investors mounted a comeback off promising inflation data and hardening expectations of coming interest-rate cuts.
The Dow Jones Industrial Average (^DJI) added 1.6%, or more than 650 points. The S&P 500 (^GSPC) rose about 1.1%, while the Nasdaq Composite (^IXIC) put on 1% although both indexes were in the red for the week.
Stocks turned positive after a turbulent series of sessions. The Nasdaq and the S&P 500 have taken a bruising as Big Tech earnings undermined confidence in the AI trade, spurring the ongoing exodus from megacaps into small cap stocks.
The Nasdaq shed 2% over the week, while the S&P lost about 1%. Only the Dow emerged with a win, gaining roughly 1%.
That pause in this year's rally has Wall Street questioning whether the sell-off is a turning point to sustained lower prices or a typical bull-market pullback. In play are earnings-fueled concerns about softness in the US economy, though Thursday's surprisingly hot GDP print eased those somewhat.
Friday's big data point was the closely watched Personal Consumption Expenditures (PCE) index, which provided more fuel to the notion of a still-strong economy and gradually cooling inflation. "Core" PCE, which strips out the cost of food and energy and is closely watched by the Fed, came in slightly higher than expectations but rose at its slowest pace in over three years.
The encouraging reading sets the stage for next week's Fed policy meeting. Officials are widely expected to keep interest rates unchanged. But many anticipate the huddle to be the last before the central bank begins lowering rates in September.
Investors are also getting set for quarterly earnings next week from four more "Magnificent Seven" techs — Apple (AAPL), Microsoft (MSFT), Amazon (AMZN) and Meta (META).
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Hamza Shaban
Stocks flash optimism after a volatile week
After turbulent sessions sent investors fleeing from Big Tech and dragged major indexes into the red, stocks bounced back Friday, with the Dow gaining more than 650 points and scoring a win for the week.
The Dow Jones Industrial Average (^DJI) added 1.6%. The S&P 500 (^GSPC) rose about 1.1%, while the Nasdaq Composite (^IXIC) put on 1%, although both indexes suffered weekly losses.
Hamza Shaban
A look at the week ahead
The final week of July has a lot in store for investors.
Will the upcoming Fed policy meeting be the last for the current cycle's high interest rates? That's probably the most significant question for the days and weeks ahead. Central bankers are widely expected to hold rates steady at the conclusion of their huddle on Wednesday. But the meeting may also bring the strongest indications of a coming rate cut, with most observers forecasting an easing policy change coming in September.
Friday's favorable inflation reading was the latest in a string of encouraging indicators. Expect Fed Chair Jerome Powell to field questions on his latest thinking, and if he and his colleagues finally have enough confidence in economic trends to start lowering rates.
Fed week also coincides with the July jobs report (coming Friday) and the majority of Big Tech earnings.
After Google disappointed earlier this week, its peers Apple (AAPL), Amazon (AMZN), Meta (META), and Microsoft (MSFT) are on deck to share their quarterly reports. Top of mind for many investors is how their tens of billions of dollars in AI investments are coming along, and how much of those expenses are turning into new business or the potential for new revenue streams.
Other corporate giants outside of the tech world expected to post earnings include McDonald's (MCD) Starbucks (SBUX), Boeing (BA), and Exxon Mobil (XOM).
Here's Yahoo Finance's Brent Sanchez with a visual breakdown of the week ahead:
Hamza Shaban
Big Tech earnings will test the limits of AI spending
What happens when heavy AI spending meets slowing ad growth? Google just found out the hard way. And the search giant's rough week may serve as a preview for the other major tech names expected to report earnings in the coming days.
Shares in Google’s (GOOG, GOOGL) parent company Alphabet are down more than 6% this week after reporting larger than expected spending on AI infrastructure as well as slowing ad growth, suggesting that the leeway given to companies pursuing unproven AI business lines only goes so far.
Google's case might have been a one-off, though.
In Google's case, it may be that heightened scrutiny on AI spending only comes into play when other business lines are showing weakness. Wall Street’s leash appeared to get a lot shorter when the company revealed its main ads business is under pressure.
For the other tech giants, their massive AI spending alone might not trigger a sell-off. Amazon (AMZN), Meta (META), and Microsoft (MSFT) earnings will serve as the next test of investor tolerance for AI spending when the companies report next week.
Hamza Shaban
The fallout from the CrowdStrike outage
Nearly a week after a massive IT outage shut down computer systems around the world, cybersecurity company CrowdStrike (CRWD) issued a statement revealing that a single software update was responsible for grounding planes, curtailing hospital procedures, and closing businesses for days.
Shares of the company are down about 16% over the past week.
Outside of a need for a regimented approach to IT failures, the CrowdStrike outage also points to a broader problem within the backbone of the world’s tech infrastructure: A small number of companies have an outsized impact on how the web operates.
Hamza Shaban
Stocks trending in afternoon trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Friday.
Booz Allen Hamilton (BAH): Shares of the government and military contractor fell by 10% Friday afternoon after the company reported earnings that missed Wall Street estimates. Booz Allen posted revenue of $2.94 billion for the quarter.
T Rowe Price (TROW): Shares of the asset manager fell 3% despite reporting an 11% increase in second quarter adjusted profit on Friday. T Rowe is under broader pressure due to the rising popularity of passively managed funds, which serve as a low-cost alternative to active managers.
3M (MMM): Shares of the manufacturing company rose more than 15% early Friday after raising the low end of its full-year adjusted earnings guidance and reporting second quarter sales that came in above expectations.
DexCom (DXCM): The manufacturer behind glucose monitors saw its shares plummet close to 40% Friday morning after the company shocked Wall Street with a cut to its annual revenue forecast tied to fewer new customers and an internal restructuring.
Hamza Shaban
Dow surges 700 points in afternoon trading
US stocks gained ground Friday afternoon, fueled by the latest inflation data that showed easing pricing pressures and renewed confidence in parts of the stock market outside of big technology names.
The Dow Jones Industrial Average (^DJI) added 1.8%, or more than 700 points. The S&P 500 (^GSPC) rose about 1.4%, while the Nasdaq Composite (^IXIC) climbed 1.3%. The Dow is on track for a win for the week while the S&P and the Nasdaq are set to lose.
Hamza Shaban
The Fed inches closer to easing
Fed officials will huddle next week to decide the next the next course of action on interest rate policy. While the market widely expects officials to hold rates steady in July, the meeting's significance comes as officials hint at where they stand for their September meeting, when observers predict the first rate will arrive.
"We expect the Fed to keep its policy rate unchanged in July while signaling progress on reducing inflation has resumed," said Bank of America Global Research analyst Michael Gapen in a report on Friday.
Even though Fed officials have indicated that recent inflation readings are encouraging, some analysts still do not believe that a September cut is guaranteed. Fed officials have emphasized that more data is needed before they can pull the trigger on an easing cycle.
"The Fed is optimistic that cuts are likely in the near-term, but we do not think it is willing to signal September is a done deal," Gapen said. "It could happen, but it would depend on the data."
Gapen also noted that easing inflation has prompted the Fed to emphasize both sides of its dual mandate, instead of just focusing on price stability. That will give officials leeway to cut rates for a variety of reasons.
"Cuts can happen because the economy cools, because inflation slows, or both."
Hamza Shaban
Stocks trending in morning trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday.
3M (MMM): Shares of the manufacturing company rose more than 15% early Friday after raising the low end of its full-year adjusted earnings guidance and reporting second quarter sales that came in above expectations.
DexCom (DXCM): The manufacturer behind glucose monitors saw its shared plummet close to 40% Friday morning after the company shocked Wall Street with a cut to its annual revenue forecast tied to fewer new customers and an internal restructuring.
Deckers Outdoors (DECK): Shares of the footwear designer rose 7% after the company reported Q1 results that beat estimates, with net sales of $825.3 million coming in better than the $807.8 million Wall Street was expecting. Deckers also raised its full-year profit forecast.
Coursera (COUR): The online learning platform, which has been under pressure because of the looming threat of an AI-led disruption in education, surged more than 40% Friday after earnings came in above expectations. Coursera said it surpassed more than 2 million enrollments in its array of generative AI offerings.
Hamza Shaban
Coming rate cuts could calm fears of slowing growth
This week's topsy-turvy trading was fueled in part by fears of slowing growth and second-guessing tied to Big Tech's AI push.
But Friday's favorable inflation reading, which will boost the case for the Fed to start cutting rates, could help calm those fears, as more affordable borrowing will help the economy to continue to expand.
"Recently, the market has pivoted to fears of slowing growth over fears of sticky inflation, and we think both concerns are valid, but if the Fed is able to lower rates in a predictable and reasonable manner then the economy should continue to expand and inflation should (very slowly) proceed lower to the Fed’s target," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, in a note on Friday.
A recent stream of encouraging inflation data has also helped minimize less-favorable price pressure data from the first quarter, which Fed officials have said prompted them to rethink their rate-cutting timeline and instead instill a plan of higher rates for longer.
Without that impediment, central bankers now have more leeway to start cutting rates. "For the past few months the inflation data have been cooperating," Zaccarelli said. And as long as the data keeps coming in to boost the Fed's confidence in slowing inflation, multiple cuts could be in store for the year.
Hamza Shaban
Stocks poised for rebound after encouraging inflation data
The final session of a volatile trading week had stocks set for a rebound as new inflation data showed easing price pressures, boosting investor confidence in a widely expected September rate cut.
The Dow Jones Industrial Average (^DJI) added 0.6%, or about 200 points, after the blue-chip index eked out a closing gain. The S&P 500 (^GSPC) rose about 0.8%, while the Nasdaq Composite (^IXIC) climbed 1.1%, both coming off a failed attempt to rebound from this week's tech-led sell-off.
Josh Schafer
Fed's preferred inflation gauge steadies ahead of expected cuts
The latest reading of the Fed's preferred inflation gauge showed prices increased slightly more than expected in June.
The core Personal Consumption Expenditures (PCE) index, which strips out the cost of food and energy and is closely watched by the Federal Reserve, rose 2.6% over the prior year in June; above economists' estimate of a 2.5% increase and unchanged from the month prior. Still, the print marked the slowest annual increase for core PCE in more than three years.
Core PCE rose 0.2 % from the prior month, in line with Wall Street's expectations for 0.2% and faster than the 0.1% increase seen in May.
Pho, a white-owned pho restaurant chain with multiple outlets in the U.K., is receiving renewed criticism after TikToker @iamyenlikethemoney recently revisited its trademarking of the word “Pho.” In 2013, the company asserted its right over the name, forcing Mo Pho, a smaller, Vietnamese-owned business, to scramble for alternative monikers. Amid heavy backlash, Pho said it will not pursue action against Mo Pho.
Consumers are flocking to online resale marketplace StockX to find the latest and greatest offerings from vintage sneakerheads, streetwear sellers, and all other sorts of collectors. StockX CEO Scott Cutler sits down with Brad Smith on Wealth! to discuss trends in the resale space and what they are indicating about consumer behavior heading into the holiday shopping season. “We're obviously in a challenging macro environment, but I think things are positive going forward. We've had four years of interest rates increasing inflation, and now I think as consumers are looking forward, it's much more optimistic,” Cutler says. Cutler calls the state of the resale market as "super dynamic," noting tremendous shifts in market share in 2024. "And you see this also reflected in the public markets. On the one side, you've got the challenges associated with Nike (NKE), which has really been driven by restocks, oversupply, [and] a lack of innovation. But if you look at the price performance in the resale markets as well as market share gains, where is it happening? Adidas (ADDYY), Asics (ASCCY), Deckers (DECK), which is Hoka and Uggs, and Crocs (CROX).” Cutler says that StockX reflects the dynamics of the resale market in its digital marketplace, with resellers “finding opportunities between wholesale and retail” to offer attractive prices for buyers. “In the catalog of StockX, we've got hundreds of thousands of product pages across multiple categories in sneakers, shoes, electronics, collectibles, apparel, [and] accessories. And so I think if you're a seller, you're really looking for those opportunities for products that you really think customers will be positioned to buy," he tells Yahoo Finance. To watch more expert insights and analysis on the latest market action, check out more Wealth here. This post was written by Naomi Buchanan.
Nearly $75 million in federal grant funds over the next five years will be aimed at helping Alaska Native communities as they grapple with the impacts of climate change. The Alaska Native Tribal Health Consortium is receiving the grant as part of a program aimed at building resilience to extreme weather and environmental changes in U.S. coastal communities, the Anchorage Daily News reported. The National Oceanic and Atmospheric Administration will work with tribal governments as part of the effort.
NEW YORK, October 17, 2024--Aspen Power, a leading distributed generation platform dedicated to building the clean energy future, held ceremonies this week to celebrate the completion of two community solar sites in Corinth and Prospect, Maine, which together deliver 8.5 megawatts (MW) of renewable energy capacity.
Hong Kong police dismantled a cross-border fraud syndicate that allegedly used deepfake technology to swindle over $46 million from victims across Asia through cryptocurrency romance scams. With 27 individuals arrested, the bust includes one of the largest fraud centers ever found in the city and marks the first known case of deepfakes being used in Hong Kong for such crimes. What happened: Police raided a 4,000-square-foot fraud center in the Hung Hom area on Oct. 9, arresting 21 men and six women aged 21 to 34.
Vice President Kamala Harris is shifting her campaign strategy to win over more men and Republicans, and sharpening her attacks on Donald Trump as Democratic anxieties rise over polls showing her rival making strong gains. The Democratic nominee is in a statistical dead heat in crucial states with Trump, the Republican former president, according to public and internal campaign polls cited by Democratic sources, sparking a round of finger-pointing and second-guessing from some corners. It is a frustrating moment for a whirlwind campaign that opened with a huge jump in enthusiasm and cash when she replaced President Joe Biden in July, put on a robust Democratic convention and was widely hailed as the winner of her only debate with Trump.
Manoj Bhargava, the Indian American billionaire and founder of 5-Hour Energy, is under investigation by the U.S. Senate Finance Committee and the Internal Revenue Service for alleged tax abuse. Bhargava, who once lived as a monk in India, is accused of gifting a significant stake in his company and hiding Swiss bank accounts to lower his tax bill. Ongoing investigation: The investigation is part of an ongoing effort to close tax loopholes exploited by the ultra-wealthy.
After a year of record warm global temperatures caused by climate change and an El Niño weather pattern, “a weak La Niña” is expected to form ahead of the arrival of winter, the National Weather Service said, and could last through March of next year.
Welcoming the pandas: The National Zoo has released footage of the pandas, who are now settling into their new homes at the David M. Rubenstein Family Giant Panda Habitat. In the video, they are captured being transported, seen exploring their new environment and eating bamboo.
President Joe Biden and Vice President Kamala Harris described Thursday as a good day for the world after the death of Hamas leader Yahya Sinwar. Sinwar, considered the mastermind behind the Oct. 7, 2023, terror attack on Israel that prompted war in Gaza and wider regional conflict, was killed by Israeli forces in the Gaza Strip, the Israel Defense Forces announced on Thursday.
Kincardine, Ontario, Oct. 17, 2024 (GLOBE NEWSWIRE) -- An international collaboration between Bruce Power, Saugeen Ojibway Nation (SON), Isogen (a Kinectrics and Framatome company), and ITM Isotope Technologies Munich SE (ITM) commenced commercial production of lutetium-177 today on a second production line of the Isotope Production System (IPS) on Bruce Power’s Unit 7, effectively doubling the production capabilities for this cancer-fighting isotope. This investment in new isotope production in
For the first time since March of 2021, Jordan Spieth has dropped out of the top 50 in the world. The former world No. 1 and three-time major champion slipped to No. 51 in the latest tabulations of the Offic
The Australian market has shown impressive momentum, climbing 1.1% in the last week and up 17% over the past year, with earnings forecasted to grow by 12% annually. In this dynamic environment, identifying high growth tech stocks involves looking for companies that not only align with current market trends but also demonstrate strong potential for sustainable earnings growth.
HARTFORD, Conn. & BOSTON, October 17, 2024--As a strong reinforcement of its position as an energy industry leader, Eversource (NYSE: ES) has been listed in TIME’s ranking of the World’s Best Companies in 2024 which was curated in collaboration with global research and data firm Statista. Ranked #396 overall out of 1,000 companies and the #1 U.S. utility, this recognition highlights the energy company’s exceptional performance in three key categories, including employee satisfaction, revenue gro