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Yahoo Finance Plus Nasdaq tumbles as Apple losses deepen, Fed's next move in focus: Stock market news today
The Nasdaq tumbled on Thursday, dragged down by Apple's (AAPL) continued slump, as shares of the tech giant continued to fall after reports that China has forbidden government officials from using its iPhone and it plans to extend the ban to state companies.
The Dow Jones Industrial Average (^DJI) was the only index in the green on Thursday, up a modest 0.2%. The S&P 500 (^GSPC) dropped about 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) plummeted roughly 1% as Apple (AAPL) sank nearly 3%.
Unemployment claims fell to their lowest levels since February last week, another sign the Federal Reserve will likely keep interest rates higher for longer. The surprise reading followed Wednesday's data showing US services activity at a six-month high in August, seen as a sign of resilience among consumers and in the broader economy amid higher borrowing costs.
Meanwhile, gains in Treasury yields (^TNX) have also weighed on tech stocks.
The run-up in oil prices (CL=F) that cast doubt on the Fed's push to cool inflation took a step back on Thursday after China trade figures failed to ease worries about sluggishness in the world's second-biggest economy. Questions are swirling about whether the slowdown in China could be a "top risk" to the US economy.
Those reports are feeding into the debate as to whether the Fed will be persuaded it needs to stick with high rates at its September meeting in a couple of weeks.
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AApple, Google ‘choke points’ to US payments system: CFPB
The US government is once again targeting big tech. Consumer Financial Protection Bureau director Rohit Chopra said Thursday tech giants like Apple (AAPL) and Google (GOOGL) are cutting off innovation in the US payments system.
As Yahoo Finance's Jennifer Schonberger reports:
"Regulations imposed by Big Tech firms have a big impact on whether consumers and businesses can make payments using third-party apps," Chopra said during a fintech conference organized by the Philadelphia Federal Reserve.
"We need strong challenges to dominant Wall Street banks and card networks," he added. "But there is real concern that the largest technology firms will be able to erect even more gates and toll booths that will prevent the smallest firms from emerging, raising capital, growing and succeeding even when they offer a superior technology."
Chopra’s comments follow a long-awaited report CFPB published Tuesday that focused on the impacts of Big Tech policies on tap-to-pay functions used on mobile devices like smartphones and watches.
Apple and Google set regulations that govern app developers’ ability to integrate near field communication (NFC) technology into their apps, which is needed to execute the tap-to-pay transactions. If an app does not comply with their regulations, the app can be denied access or face removal.
"There's no comparable gatekeeper as we know for accessing service through a web browser," Chopra said.
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AApple, Google ‘choke points’ to US payments system: CFPB
The US government is once again targeting big tech. Consumer Financial Protection Bureau director Rohit Chopra said Thursday tech giants like Apple (AAPL) and Google (GOOG, GOOGL) are cutting off innovation in the US payments system.
As Yahoo Finance's Jennifer Schonberger reports:
"Regulations imposed by Big Tech firms have a big impact on whether consumers and businesses can make payments using third-party apps," Chopra said during a fintech conference organized by the Philadelphia Federal Reserve.
"We need strong challenges to dominant Wall Street banks and card networks," he added. "But there is real concern that the largest technology firms will be able to erect even more gates and toll booths that will prevent the smallest firms from emerging, raising capital, growing and succeeding even when they offer a superior technology."
Chopra’s comments follow a long-awaited report CFPB published Tuesday that focused on the impacts of Big Tech policies on tap-to-pay functions used on mobile devices like smartphones and watches.
Apple and Google set regulations that govern app developers’ ability to integrate near field communication (NFC) technology into their apps, which is needed to execute the tap-to-pay transactions. If an app does not comply with their regulations, the app can be denied access or face removal.
"There's no comparable gatekeeper as we know for accessing service through a web browser," Chopra said.
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AHilton embraces the EV boom
Hilton hotel guests will now have access to Tesla (TSLA) chargers.
As Yahoo Finance's Pras Subramanian reports:
Starting in early 2024, the hotel operator will install 20,000 Tesla Universal Wall Connector plugs at 2,000 of its hotel locations in the US, Canada, and Mexico. Hilton (HLT) says this project will make its EV charging network the largest of any hospitality company. Hilton currently has chargers at 1,850 Hilton-branded hotels globally.
Hilton, which operates its namesake brand as well as Embassy Suites, Hampton Inn, and DoubleTree, among others, says that customers are increasingly looking for EV chargers while traveling, with search volume on the company’s website for EV charging growing fastest year to date, jumping from fourth to second highest in converting searches to stays.
Hilton has said previously that access to an airport shuttle from a hotel location was the top search query leading to room booking.
The Tesla Universal Wall Connectors that Hilton is using are different from Tesla’s Supercharger Network, which offers faster DC charging, while the wall connectors offer cheaper, but slower, AC charging.
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JC3.ai's Thursday stock plunge speaks to shift in AI trade
The artificial intelligence trade is maturing.
After exuberance around the potential for AI sent tech stocks soaring into the summer and had some Wall Street strategists boosting their outlook for the stock market overall, investors have shifted back to a focus on the fundamentals.
The latest iteration played out on Wednesday night when C3.ai (AI), which had seen its stock rise more than 200% this year, announced earnings.
C3.ai, an artificial intelligence software company, said it expects 2024 revenues in a range of $295 to $320 million, roughly in line with Wall Street's expectations for $308 million. But the company also now anticipates operating income losses in a range of $70 to $100 million. Previously the company had projected losses of $50 to $70 million. It also no longer expects to be profitable on a quarterly basis by the end of 2024.
"We have made the decision to invest in generative AI, to invest in lead generation, to invest in branding, to invest in market awareness, and to invest in market and customer success related to our generative AI solutions," C3.ai CEO Thomas Siebel told investors on the earnings call.
The stock fell more than 15% just after the opening bell on Thursday morning before paring losses to about 12%.
"We don't see top line metrics [revenue] materially inflecting higher at this point to justify the increased investment posture [on generative AI]," JPMorgan analyst Pinjalim Bora wrote in a note on Thursday.
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AWhy Wall Street is bullish on the oil rally
Could oil at $100 per barrel be a possibility? Wall Street analysts seem to think so.
As Yahoo Finance's Ines Ferré reports:
“The notion of $100/bbl has evolved from completely unimaginable a few short months ago, to within striking (or hyping) distance today,” Michael Tran and Helmina Croft at RBC Capital Markets wrote in a note to investors on Thursday.
West Texas Intermediate (CL=F) was little changed during Thursday’s session following a nine-day rally. Brent crude futures (BZ=F) fell fractionally, though still hovering above $90 per barrel.
“The idea of $100/bbl remains far from a base case scenario for us, but we have learned to respect that this oil market has evolved into as much of a momentum-based market as it is a fundamentally based one when thinking about near dated prices,” said the note. “It often overshoots and overcorrects.”
Earlier this week Saudi Arabia announced an extension of its unilateral production cuts for the next three months. Russia also reduced its exports by 300,000 barrels per day through year-end. These cuts are in addition to OPEC+ reductions that started at the end of last year.
The reductions are squeezing supply as crude futures have rallied more than 25% since late June despite China’s slower-than-expected economic recovery and increased production output by US producers.
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AStocks mixed, Nasdaq biggest laggard
US stocks were mixed in afternoon trading with the tech-heavy Nasdaq Composite (^IXIC) leading the day's declines, down about 1%. The S&P 500 (^GSPC) slipped roughly 0.3% while the Dow Jones Industrial Average (^DJI) remained the only major index in the green, up a modest 0.3%, or more than 110 points.
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AApple, Nvidia, ChargePoint: Stocks trending in midday trading
Apple (AAPL): Shares fell about 3% on Thursday after the tech giant stock saw its biggest single-day drop in a month on Wednesday following a Wall Street Journal report that China is banning government officials' use of iPhones for work
Nvidia (NVDA): Similar to Apple, Nvidia shares extended losses on Thursday, falling roughly 3% as rising yields pressure growth stocks.
ChargePoint (CHPT): The EV charging company saw losses accelerate in mid-afternoon trading, sinking 14% on the heels of disappointing earnings results.
C3.ai (AI): Shares dropped roughly 15% after the company posted a deeper full-year loss than expected and pulled back from its original forecast to reach non-GAAP profitability by the end of fiscal 2024.
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AApple losses deepen
Apple (AAPL) shares continued to fall in mid-morning trading on Thursday, down more than 3%, after the stock saw its biggest single-day drop in a month on Wednesday.
The declines come after a Wall Street Journal report said China is banning government officials' use of iPhones for work. China accounted for about a fifth of Apple's total revenue last year with the tech giant manufacturing the majority of its hardware in the country, as well. The report comes one week before Apple is expected to release its next iPhone.
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AWhy stocks could surge in the back half of 2023
Stocks have slumped to kick off September — but one Wall Street bull thinks there's still more room to run.
As Yahoo Finance's Josh Schafer reports:
BMO Capital Markets Chief Investment Strategist Brian Belski believes the S&P could gain another 13% this year.
"Yes, there is still a fair amount of uncertainty to be resolved in the coming months that will likely lead to shorter periods of heightened volatility, but we continue to believe that higher US stock prices through year-end is the path of least resistance with our bull case scenario (5,050) becoming increasingly more likely," Belski wrote on Tuesday night.
The analyst said stocks have historically produced gains 71.4% of the time in the six months following a 20% run-up like the S&P 500 saw to start 2023, meaning September seasonality may not be at play.
He isn't the only one who has voiced the sentiment. Carson Group chief market strategist Ryan Detrick told Yahoo Finance that when stocks are up more than 10% year-to-date, September seasonality usually isn't as bad. Fundstrat head of research Tom Lee recently called for a gain in the benchmark average this September.
"We believe consensus caution of September will prove to be unwarranted," Lee wrote in a note on Friday. "In fact, we believe September probabilities favor a gain of 2% to 3%, supported by a downward shift in consensus views around inflation and inflation risks."
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