Yahoo Finance Hamza Shaban
Stock market today: Tech stocks lead S&P 500, Nasdaq higher to end volatile week
Updated
US stocks pushed higher Friday as Wall Street looked to bounce back from the Dow's biggest wipeout in over a year.
The S&P 500 (^GSPC) rose 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) gained 1.1%. The blue-chip Dow Jones Industrial Average (^DJI) rose just above the flatline, eking out a victory after shedding 600 points on Thursday in its worst day in more than a year.
Renewed interest rate concerns fueled the prior session's rout, led by the Dow's sharp decline. Meanwhile, US Treasury yields eased up, with the benchmark 10-year yield (^TNX) hovering below 4.5%.
May's earlier roaring sentiment turned sour after stronger-than-expected US business data prompted a rethink on the Federal Reserve's path on interest rates.
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Traders are more evenly split on whether the central bank will slash rates at its September meeting, according to the CME FedWatch tool. That marks a significant shift from last week when only around one-third expected the Fed to hold rates steady through the fall's first meeting. Goldman Sachs on Friday said it no longer expects the Fed to make its first cut in July, instead suggesting September was more likely.
But Wall Street could enter the holiday weekend in better spirits. Nvidia (NVDA), whose latest blowout quarter spurred an early rally on Thursday, was up by 2% Friday, trading around $1050 per share. Its coming stock split may fuel even more retail interest in owning a piece of the company.
Highlighting the macroeconomic front Friday is a revised look at the University of Michigan's consumer sentiment index for May, which fell to 69.1. The print beat expectations but still registered a month-over-month fall. That brings the sentiment reading to its lowest level in about five months, as inflation and interest rate concerns bit into Americans' views of the economy.
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Stocks push higher, led by tech surge
US stocks gained ground Friday, claiming victory at the end of a volatile week that included the Dow's worst plunge in more than a year.
The S&P 500 (^GSPC) rose 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) gained 1.1%. The blue-chip Dow Jones Industrial Average (^DJI) rose just above the flatline.
- Hamza Shaban
Musk is not the only CEO testing new compensation limits
Tesla's Elon Musk isn't the only CEO testing the limits of executive compensation. Other companies are also pushing pay packages higher.
Median total CEO compensation rose 11.4% in fiscal 2023 to $23.7 million, according to an Equilar analysis of firms with revenues greater than $1 billion, reports Yahoo Finance's Alexis Keenan. That followed a 7.7% boost in 2022.
Tesla stockholders will have a chance on June 13 to bless a $56 billion compensation deal Musk received in 2018 that was nullified by a Delaware judge earlier this year.
The number of CEOs in the S&P 500 who nabbed total pay packages worth more than $50 million has also jumped in recent years, according to a recent analysis from the Wall Street Journal.
But not all CEOs have found shareholders receptive to these increases. Last week, 3M shareholders voted against $16.4 million in compensation for its former CEO Mike Roman, as well as other company executives.
- Hamza Shaban
The White House keeps talking up Fed independence
The Biden White House has made the independence of the Federal Reserve a 2024 campaign issue. But rather than target swing state voters with a message of institutional autonomy, the intended audience is Wall Street.
The latest salvo came Wednesday with a blog post from the White House Council of Economic Advisers citing "the importance of an independent central bank," reports Yahoo Finance's Ben Werschkul.
The post ran through a historical connection between West Wing meddling in monetary policy and bad economic outcomes, with the authors stating that they "thought this was a good moment to explain."
And it's clear why: Donald Trump. Allies of the former president have floated a series of ideas in recent months that could undercut an independent Federal Reserve and possibly spook markets.
The ideas range from firing Federal Reserve Chair Jerome Powell to a long-shot plan recently reported in the Wall Street Journal that has the president himself playing a role in setting interest rates.
- 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.
Deckers (DECK): Shares of the the parent company of apparel brands UGG, Hoka One One, and Teva gained 13% Friday afternoon as fiscal fourth quarter earnings showed net sales that surpassed Wall Street expectations, posting $959.8 million.
Dell (DELL): Following another powerhouse quarter from Nvidia (NVDA), an array of AI-related companies are gaining on the AI trade, including Dell, whose shares rose more than 6% Friday. The technology company will report fiscal 2025 first quarter results next week and is expected to post a 4% increase in revenues from the same period last year of $21.7 billion, according to Wall Street estimates.
Boeing (BA): Shares of the aircraft manufacturer recovered and gained nearly 1% Friday afternoon after CFO Brian West warned that he anticipates slowing fleet deliveries and negative free cash flow.
Bitcoin (BTC-USD): The value of the cryptocurrency held steady following a move by the Securities and Exchange Commission to approve critical rule changes that would allow spot ether (ETH-USD) ETFs to trade. But regulators still have not given approval to money managers that want to issue the new products.
- Hamza Shaban
Google isn't rolling back AI Overview despite criticism over bungled answers
Following a series of absurd and incorrect answers offered by its new AI Overview feature, which were shared widely on social media, Google said it is making improvements to when the new search tool is triggered. But the company said AI Overview, a significant initiative the company debuted earlier this month, is not being rolled back.
"We're taking swift action where appropriate under our content policies, and using these examples to develop broader improvements to our systems, some of which have already started to roll out," Google said in a statement to Yahoo Finance on Friday.
This week several users on social media posted screenshots of AI Overview spitting out erroneous answers, suggesting that people include glue in their pizza recipes and that former President Barack Obama is Muslim.
"The vast majority of AI Overviews provide high quality information, with links to dig deeper on the web. Many of the examples we’ve seen have been uncommon queries," the company said, adding that AI Overviews underwent extensive testing before its launch.
A Google spokesperson told Yahoo Finance that when results reflect inaccuracies that exist on the broader web, the company works on improvements for a broad range of queries, and that the company doesn’t aim to show AI Overviews for explicit or dangerous topics.
- Hamza Shaban
Stocks rebound in afternoon trading
Investors bounced back Friday afternoon, sending stocks upward after the Dow's biggest wipeout in over a year.
The S&P 500 (^GSPC) rose 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) gained roughly 1.1%. The blue-chip Dow Jones Industrial Average (^DJI) put on around 0.3%, or roughly 100 points.
- Alexandra Canal
Paramount, Charter reach multi-year distribution deal as buyout talks persist
Paramount (PARA) reached a new multi-year distribution deal with Charter Communications (CHTR) on Thursday, a significant win for the company as it weighs its strategic options and a possible buyout from Skydance Media or Apollo Global and Sony. (Disclosure: Yahoo Finance is owned by Apollo.)
Charter, the parent company of Spectrum TV, will continue to carry all of Paramount's networks, including Showtime, CBS, and Paramount+. Additionally, subscribers to Charter's largest tier will receive the ad-supported versions of Paramount+ and BET+ at no additional costs.
Financial terms of the deal were not disclosed.
"With its TV Media segment largely driven by linear networks accounting for two-thirds of Paramount’s revenue last year and all of the company’s EBITDA, [Charter] had the potential to cause serious damage if it had decided to turn the screws on Paramount," MoffettNathanson analyst Robert Fishman said in a new note to clients on Friday.
"This means that Paramount has successfully averted one of the biggest risks it faced (droppage of its longer-tail networks) while confirming a costly, though widely expected, development (provisioning of Paramount+ for free)," the analyst continued. "[This forgoes] the dramatic blackout that occurred last September during Charter’s negotiations with Disney."
Last year, Disney (DIS) pulled its owned and operated channels, including ESPN and ABC, from Charter Spectrum cable systems after the two sides failed to reach a distribution agreement. At the time, the media blackout impacted a slew of high-profile sporting events, including the US Open, and arrived on the heels of the NFL's debut — upping the pressure for both sides to make a deal.
The stalemate was eventually resolved as Charter agreed to offer some Disney streaming services — the ad-supported version of Disney+, ESPN+, and ESPN's yet-to-be-launched direct-to-consumer offering — as part of select cable packages at no additional cost to the consumer.
But for Paramount, the stakes appeared even higher amid its uncertain future.
"We have repeatedly discussed this Charter negotiation as a potential stumbling block for any bigger strategic action or deal for Paramount as buyers need confidence in the trajectory of the company’s linear cash flows," Fishman said. "With this deal now locked in, we would not be surprised to see some renewed progress on the Skydance Media bid or Sony/Apollo offer."
"Depending on the Charter distribution deal terms, the newly instated Office of the CEO led by a trio of senior executives might even have more conviction to move forward with its own long-term plan."
- Hamza Shaban
Nvidia is the fourth Mag 7 company to split its stock in recent years
Nvidia's (NVDA) upcoming 10-for-1 stock split, which arrived alongside its blockbuster earnings report, marks the fourth split from Magnificent Seven companies since 2022.
The trend, according to Bank of America Global Research analysts, highlights the bullishness of such moves, which historically signals optimism from company managers and, for companies that split their stocks, pays out in stronger performances. Stock splitters have shown 25% gains a year after the split, compared to 12% for the broader market, according to the note, published Friday.
Nvidia follows three other Mag Seven peers that have split their stocks in the past two years. Amazon (AMZN), Alphabet (GOOG, GOOGL), and Tesla (TSLA) have all moved to make their stock more accessible, the analysts said. And the splitting also reinforces a trend of tech companies pursuing shareholder friendly policies with dividend introductions or expansions as well as stock buybacks.
Tech companies with expensive shares may be inclined to follow their peers into splitting. Microsoft and Meta, for example, have share prices that are over $500, making them potential split candidates.
- 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.
Boeing (BA): Shares of the aircraft manufacturer sank by almost 8% Friday morning after CFO Brian West warned that he anticipates slowing fleet deliveries and negative free cash flow.
Bitcoin (BTC-USD): The value of the cryptocurrency sank 2% following a move by the Securities and Exchange Commission to approve critical rule changes that would allow spot ether (ETH-USD) ETFs to trade. But regulators still have not given approval to money managers that want to issue the new products.
Workday (WDAY): The corporate software company fell 11% after cutting its full-year subscription guidance in its first quarter results. CFO Zane Rowe said the guidance reflects elevated sales scrutiny and lower customer headcount growth.
Intuit (INTU): Shares of the financial software company slid nearly 8% Friday morning after reporting a decline in lower-end customers for tax preparation services. One million fewer people used TurboTax's free tax filing service compared to a year ago, the company said, as it lost market share with low-paying customers.
- Brian Sozzi
Sonos CEO keeps it real on tariffs
Tariffs just aren't good business.
Sonos (SONO) CEO Patrick Spence caught up on the tariff topic in a new episode of my Opening Bid podcast — you can watch his comments around the 15-minute mark below. Recall the business was among those harmed by the Trump tariffs on China.
Interestingly, since the tariff announcement on China last week from the Biden administration, shares of Sonos have lagged.
Also in the below clip: details on the company's initial foray into the headphone market.
- Hamza Shaban
Stocks edge up in a bounce back for the Dow
US stocks ticked back up Friday as Wall Street tried to come back from the Dow's biggest wipeout in over a year.
The S&P 500 (^GSPC) rose about 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) gained around the same amount. The blue-chip Dow Jones Industrial Average (^DJI) increased 0.2%, or roughly 80 points.
- Brian Sozzi
Where the minds of investors are...
Some interesting insights into the psyche of investors out of the JPMorgan team this morning.
Their new survey of 850 investors found:
The asset class with the highest returns in 2024 is expected to be stocks (51%), with a majority holding a slightly bullish view on the S&P 500, expecting the index to be at 5,250-5,750 (55%) at year-end.
The majority agreed that the next move from the Federal Reserve will be a rate cut (69%), expected at the September meeting (49%).
The biggest threat to markets this year was geopolitical turmoil (cited by 35%) and resurgent inflation (32%).
On the topic of US presidential elections, investors were almost evenly split between whether the Republican (51%) or Democratic (49%) candidate would win.
30% of respondents expected a Republican win would lead to a risk-on environment for markets.
27% thought a Republican win would have no material market impact.
21% expected a Democratic win would cause no material market impact.
