Yahoo Finance 
Josh Schafer
Stock market today: Stock rally takes a breather ahead of key jobs report
US stocks were little changed on Thursday, hovering near record highs, with investors awaiting an update on the labor market amid growing hopes for interest rate cuts.
The S&P 500 (^GSPC) dipped barely below the flatline on the heels of a record close. The Dow Jones Industrial Average (^DJI) popped slightly, adding 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) gave back early-session gains to drop about 0.1%.
Stocks took a breather after the roaring rally that also lifted the Nasdaq to an all-time high on Wednesday. Tech stocks helped drive the gains, with Nvidia (NVDA) overtaking Apple (AAPL) as the second-biggest US company.
However, on Thursday, Nvidia shares gave back some of those gains to fall more than 1%, sending the AI chip giant's market cap below the $3 trillion level.
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The market has greeted recent soft economic readings as a reason to put a Federal Reserve policy pivot back on the table, with the ADP private payrolls miss just the latest sign of a labor market cooldown. Traders now see a 69% chance of a September rate cut, versus around 50% a week ago, according to the CME FedWatch tool.
Read more: How does the labor market affect inflation?
The countdown is on for the May monthly jobs report on Friday, seen as pivotal for stocks. The report is set for release at 8:30 a.m. ET on Friday.
LIVE COVERAGE IS OVER13 updates
A crucial jobs report awaits investors on Friday morning
The May jobs report from the Bureau of Labor Statistics, slated for release at 8:30 a.m. ET on Friday, is expected to show nonfarm payrolls rose by 185,000 in May while the unemployment rate remained flat at 3.9%.
Largely, economists expect the report to show signs of a cooling labor market after a hot start to 2024.
"The May payrolls print is likely to show a healthy but better-balanced labor market," Bank of America US economist Michael Gapen wrote in a research note previewing the release. "Also, the report will likely provide evidence that the 'catch-up' effect in hiring is fading."
This would be a continuation of a trend seen throughout labor market data this week. The latest Job Openings and Labor Turnover Survey (JOLTS), released Tuesday, showed job openings fell in April to their lowest level since February 2021. As we noted earlier this week, this brought the ratio between the number of job openings and unemployed people to 1.2 in May, which in line with pre-pandemic levels.
This reversion to normal was also seen in private wage data out from ADP on Wednesday. The data showed that the median year-over-year pay increase for job switchers fell to 7.8% in May, from a recent spike of 8.3% in March and 8% in April. The gap between pay gains for job changers and those of job stayers, which grew at a 5% pace in May, is at its lowest level since February and a far cry from 2022-2023 levels.
While not exciting news for anyone looking to job hop, it's a welcome sign for investors hoping a job market cooldown could position the Federal Reserve to cut interest rates later this year.
Amid the softer labor market data of the past week, markets are now pricing in a 67% chance the Fed cuts rates in September, up from a roughly 50% chance seen a week ago, per the CME FedWatch Tool.
- Josh Schafer
Oil expected to head back into high $80s by September, JPMorgan analysts say
On Thursday, West Texas Intermediate (CL=F) futures rallied 2% to rise above $75 per barrel while Brent (BZ=F), the international benchmark price, increased almost 2% to trade just below $80 per barrel. And JPMorgan analysts think the commodity's rally from a recent pullback could have more room to run through the summer.
Yahoo Finance's Ines Ferre reports:
"Summer inventory draws should be enough to get Brent back into the high $80s-$90 range by September," Natasha Kaneva, JPMorgan's head of global commodities strategy, wrote in a note on Thursday.
The markets had anticipated the OPEC+ reductions to stay in place through the fourth quarter of this year.
Saudi Arabia's oil minister said price stability is still the oil alliance's goal and hinted that the phaseout of voluntary cuts later this year could be changed.
While adding barrels to the market would be bearish for prices, JPMorgan analysts pointed out that a number of key OPEC producers are already pumping well above their assigned quotas and demand growth remains healthy.
We expect a seasonal uptick in demand to begin shortly and project demand for both products and crude to surge by 2.5 mbd [million barrels per day] and 4.0 mbd, respectively, between April and August," wrote Kaneva.
The analyst said additional demand could potentially come from Chinese buyers as the country takes advantage of lower prices to add to its strategic and commercial crude reserves.
- Josh Schafer
Lululemon stock rises on profit outlook, stock buybacks
Lululemon's stock (LULU) rose about 4% on Thursday after the company boosted its full-year profit outlook and raised its stock repurchase program by $1 billion.
The company said late Wednesday it now sees full-year earnings per share in a range of $14.27 to $14.47, up from a prior range of $14 to $14.20. It maintained its previously given full-year revenue forecast in a range of $10.7 billion to $10.8 billion.
The report came as investor concerns mount over the company's slowing sales growth amid growing competition in the athleisure space from newer brands like Alo and Vuori. Prior to the earnings release, Lululemon stock was down about 40% to start 2024, making it one of the worst performers in the S&P 500 (^GSPC) this year.
"It’s a bit of a relief rally that you’re seeing in the market," Aneesha Sherman, Bernstein senior analyst, told Yahoo Finance after Lululemon's release.
Comparable sales in North America were flat in the first quarter, which Sherman noted was largely expected but remains a concern for investors moving forward.
"The question is, can they offset that with international, and in this quarter they did," Sherman said.
Lululemon CEO Calvin McDonald said the company had some "missed opportunity" in its women's clothing lines in the US. Particularly, a narrow color palette in leggings contributed to the slowing sales growth, per McDonald. Conversely, McDonald noted male consumers have responded well to new launches in categories like golf and training.
"Absolutely nothing has changed in terms of the growth potential of this brand, not just internationally, across all markets, but in the US," McDonald said.
He added, "All of this is within our control. All of this the teams have been chasing, and we expect much of that to be addressed in the second half of this year."
- Josh Schafer
GameStop shares jump 17% as "Roaring Kitty" teases out livestream
Gamestop (GME) stock popped about 20% Thursday afternoon following a post on YouTube from an account linked to Keith Gill.
Gill, credited with igniting the meme stock rally back in 2021, is also known as "Roaring Kitty" on X, formerly Twitter, and YouTube. The post wasn't an actual video but rather a teaser for a livestream set to start at noon on Friday.
GameStop shares have been on a wild ride the past few weeks after Gill's X account began posting for the first time in three years. The stock has since fallen from its highs but remains up about 130% over the past month.
Gill, who became famous on YouTube by posting videos of himself talking about GameStop, has yet to reemerge despite the activity on his various social accounts. But the YouTube post follows other posts from Gill's accounts on X and Reddit in the past several weeks.
- Brian Sozzi
KeyBanc keeping it real on Apple into WWDC
I appreciate KeyBanc analyst Brandon Nispel trying to pop the hype bubble surrounding Apple's (AAPL) Worldwide Developers Conference (WWDC) next week.
From his note out this afternoon:
"Investor enthusiasm is extremely high in relation to a potential AI upgrade cycle being triggered out of WWDC, which we have seen no evidence to suggest is true and believe it's more of a sell-the-news event. We continue to expect U.S. upgrade rates to hit all-time lows. While China market share losses have improved, growth is likely still challenged, in our view."
- Ines Ferré
Nvidia pulls back, sending market value below $3 trillion
Nvidia's (NVDA) valuation fell below the $3 trillion mark on Thursday, a day after the company achieved the feat.
The artificial intelligence chip giant opened higher but quickly fell. The stock was trading down by more than 1% at around 11:45 a.m. ET.
As Yahoo Finance's Dan Howley reported, Nvidia has been the poster child for investor enthusiasm in artificial intelligence, which accelerated with OpenAI's release of ChatGPT in late 2022.
Nvidia shares are up more than 140% year to date.
Read more here.
- Ines Ferré
Oil gains as ECB lowers rates, Saudi Arabia signals flexibility on output cut phaseout
Oil gained on Thursday after the European Central Bank lowered its key interest rate and OPEC leader Saudi Arabia signaled it still prioritizes price stability, signaling it could change an earlier decision to phase out some voluntary cuts starting this year.
West Texas Intermediate (CL=F) futures rose 0.8% while Brent (BZ=F), the international benchmark price, also rose nearly 1%.
Earlier this week, crude fell following a decision by the oil alliance to keep most of its production cuts in place but start phasing out voluntary decreases starting in October. The market had widely expected all the cuts to stay in place through 2024.
On Thursday the ECB lowered its key rate by 25 basis points for the first time since 2019, in a move widely anticipated.
Lower interest rates tend to spur economic activity which increases demand for oil and gas.
- Ines Ferré
Nvidia reverses earlier gains, dips into negative territory
Nvidia (NVDA) fell into negative territory following a gain of 2.6% in early trading.
The stock reached an all-time high of $1,255.87 shortly after the market open but then declined as much as 3% by 10 a.m. ET.
Nvidia's decline has sent the Nasdaq Composite into negative territory
- Ines Ferré
Stocks steady as Nvidia inches higher
US stocks were little changed on Thursday morning following a tech-fueled rally that sent the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) to record highs.
Nvidia (NVDA) opened slightly higher after the AI darling surpassed the $3 trillion market cap level in the prior session.
On Thursday morning, the S&P 500 and the Dow Jones Industrial Average (^DJI) hovered around the flatline. The Nasdaq rose about 0.1%.
Investors have their eyes on the highly anticipated jobs report set to be released on Friday morning.
- Brian Sozzi
The commercial PC market is rebounding
Two make a trend, in my books.
Recent results out of the major PC makers have suggested a rebound in the commercial PC market, at long last.
Loop Capital's John Donovan is out with a note this morning providing more insight into the emerging trend:
"The more we dig into this sector, frankly the news and updates are becoming increasingly exciting. All the ingredients are present for a protracted and extended refresh cycle. Among the inputs are the finalization of back-to-work doctrines, an extended and prolonged lack of upgrades since the pandemic (this is also in play on the consumer side to a degree), the Windows 10-11 rollover – and this is leading to growing optimism. Add to this the simple fact that AI PC solutions will undoubtedly carry higher ASPs, particularly on the commercial side of the ledger, and the optimism appears to be realistic. Keep in mind that corporations upgrading can simply not go the “cheap route” as AI innovations would render “just good enough solutions” obsolete, so we see a roadmap to a level of “overbuying” in the near future. More good news for the PC OEMs."
Here's what HP Inc. (HPQ) CEO Enrique Lores told me about this rebound:
- Brooke DiPalma
A new face on the Walmart board
One of the most popular CEOs in the fast food industry has a meaningful new side hustle.
Chipotle (CMG) CEO Brian Niccol has been officially elected as a director of the Walmart (WMT) board. He is now the fifth independent director Walmart has onboarded since 2017, CEO Doug McMillon said Wednesday morning prior to the shareholders vote.
Niccol takes the spot of longtime board member Rob Walton (son of Walmart founder Sam Walton), who retired as of Wednesday.
This isn't Niccol's first rodeo as a board member outside the confines of Chipotle. He previously served on the boards of KB Home (KBH) and Harley-Davidson (HOG).
The addition of Niccol makes a lot of sense.
Both Chipotle and Walmart have seen success in recent years as value-conscious consumers seek items that they believe allow them to stretch their dollars. Niccol has also led the charge on digital ordering at Chipotle, whereas McMillon has led a digital rebirth at Walmart.
While other food chains struggled to keep traffic up last quarter, Chipotle saw its same-store sales jump by 7%, thanks in part to Niccol's efforts.
There's a similar vibe at Walmart: Its US same-store sales increased 3.9% year over year.
Shares of the burrito chain are up nearly 38% year to date, while Walmart shares are up more than 26%. It's also worth noting that Walmart recently conducted a 3-for-1 stock split, while Chipotle is awaiting shareholder approval for its 50-for-1 split.
- Brian Sozzi
Hey, before you get excited about this Lululemon quarter
The bears raided Lululemon's (LULU) stock prior to its earnings report last night, so I get the 9% premarket pop on results that weren't that brutal.
But this wasn't a typical Lululemon quarter (strong double-digit growth at each division) by any means, and the positive reaction may be overdone.
Of worry is that comparable sales in the Americas division were unchanged versus the prior year. The company called out misses with customers in colors, usually not a good sign of future demand. (I used to cover the stock as an analyst — believe me, this isn't a good indicator.)
"We advise investors to be sellers on any strength, the Lululemon brand and its fundamentals have peaked, in our view, and we anticipate relentless competition ahead," said Jefferies analyst Randal Konik in a client note this morning.
Konik reiterated an Underperform rating on the stock.
Makes a lot of sense.
- Brian Sozzi
Good to learn the AI terminology
If you are going to invest in artificial intelligence, it's good practice to understand the lingo.
And that includes yours truly, who isn't investing in AI but is writing way more about it than I thought I would a decade ago.
Here's a helpful insight into the topic of "liquid cooling" below in my chat with HPE (HPE) CEO Antonio Neri on Yahoo Finance. I think you will be hearing more about this, given the power that new AI chips generate.
I also found what Neri said about Nvidia (NVDA) to be of interest.
