Stock market today: S&P 500, Dow hit fresh records as Wall Street ends Nvidia-fueled rally week

Karen Friar and Hamza Shaban
Updated
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US stocks lost steam Friday but powered through a dizzying week of record breaking stoked by AI chipmaker Nvidia's (NVDA) blowout earnings.

The S&P 500 (^GSPC) rose just above the flatline, notching a new closing high, while the Dow Jones Industrial Average (^DJI) increased 0.2%, or about 60 points, claiming a fresh record of its own. The Nasdaq Composite (^IXIC) headed in the opposite direction, finishing down 0.3% after a blockbuster week.

Investors appeared to catch their breath after a worldwide breakout, which added about $277 billion to Nvidia's market value for the biggest single-day gain in Wall Street history. The chipmaker's shares continued their rise Friday, pushing the company close to a $2 trillion valuation.

Beyond the AI frenzy, the chances of a US interest rate cut are coming back into view for the market. A parade of Federal Reserve officials underlined that cuts are coming, but not soon — though they differed on just when the shift might start.

Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards

A solid fourth quarter earnings season is winding down, with more than one-third of reports so far beating estimates. An upbeat earnings forecast from Block (SQ) was followed by a 16% jump in the fintech's shares, while Carvana (CVNA) stock popped about 30% as investors welcomed the used-car seller's first annual profit.

LIVE COVERAGE IS OVER13 updates
  • Hamza Shaban

    S&P 500 ekes out record finish

    The S&P 500 just barely achieved a record close on Friday, capping a blockbuster week fueled by excitement over AI and the stunning rise of chipmaker Nvidia (NVDA).

    The S&P 500 (^GSPC) rose just above the flatline, ending the week on a high, while the Dow Jones Industrial Average (^DJI) increased 0.2% or about 60 points. The Nasdaq Composite (^IXIC) retreated, however, closing down 0.3%.

  • Hamza Shaban

    A look at the week ahead

    Zoom (ZM), Salesforce (CRM), Lowe's (LOW), and Paramount (PARA) are among the major names to report next week, as the fourth quarter earnings season that has largely pleased Wall Street winds down and pushes the market to new highs.

    A new reading on GDP will inform Fed officials as they continue to weigh economic data leading up to the first round of rate cuts — although when that will be continues to be uncertain. Federal Reserve officials have maintained that cuts are on the way, but recent remarks have tempered expectations that they will arrive soon.

    Investors and and policymakers will also be on the lookout for the latest consumer confidence data, as well as new readings on personal consumption and income.

    The coming days will bring new insight into the housing market with fresh data on mortgage applications and new home sales, giving shape to how 2024 is developing.

    Yahoo Finance's Brent Sanchez has a graphical breakdown of what to watch next week:

  • Hamza Shaban

    Walmart's latest fight with Amazon is digital advertising

    The two biggest retailers online and in real life are relying on a reimagined product to sell: advertising space.

    Walmart (WMT) this week confirmed plans to extend the reach of its ads business through a $2.3 billion acquisition of smart TV maker Vizio, wielding an array of screens to give Walmart and advertisers in-home tools "to connect to customers" (surveillance?) and another surface for boosting e-commerce.

    The Vizio play aligns with Walmart's aggressive advertising build-out. The retailer is poised to grow its ad revenue by nearly 40% this year, according to forecasts by Insider Intelligence. That's more than any other company.

    Among the businesses expected to significantly expand their ad sales in 2024 are others in the grocery and retail space seeking the higher margins of digital ads — Instacart (CART), Target (TGT), and, you guessed it, Amazon (AMZN) — turning their online platforms into another system for steering user attention and money. It's a natural evolution for these companies, which have also become powerful search engines, hosts of user-generated content (reviews! usernames!), and content publishers over the years.

    Walmart's move to capture more data and advertising power comes as Amazon grew its ads business 27% year over year, according to its most recent quarterly report.

    The market's deference to Big Tech and the eagerness to turn legacy and digital operations into ad portals have been revealed in other ways. Next week Amazon, the No. 3 player in the digital ads world behind Google (GOOG, GOOGL) and Meta (META), will join the elite members of the Dow Jones Industrial Average.

    "Reflecting the evolving nature of the American economy, this change will increase consumer retail exposure as well as other business areas in the DJIA," said S&P Dow Jones Indices, which manages the 30-stock gauge. Or, as S&P analyst Howard Silverblatt bluntly put it on Yahoo Finance Live, the index added Amazon because it "needs to stay relevant."

    Amazon is becoming an ad tech giant while the nation's largest retailer is busy turning itself into a tech company. "Digital advertising is the future of Walmart," Oliver Chen, a senior research analyst at TD Cowen, told Yahoo Finance Live.

    And while this may sound somewhat silly at first glance, it's yet another way a company can gain advantage through vertical integration: owning the store and the billboards. Or in this case, the screens that function as both.

  • Hamza Shaban

    Reddit’s WallStreetBets is an IPO risk factor

    Reddit's IPO filing called out the meme stock trading frenzy from 2021 that emerged from its WallStreetBets forum, but not in a way you might expect.

    The company noted the notorious subreddit in its discussion of risk factors leading up to its public offering.

    "Interest in our Class A common stock from retail and other individual investors, for reasons unrelated to our underlying business or macroeconomic or industry fundamentals, could result in increased volatility in the market price of our Class A common stock," the company wrote in its filing.

    The same retail investor interest and energy that propelled stocks like GameStop (GME) and AMC (AMC), attracting extreme volatility, could be pointed at Reddit itself, the company warned.

    "Given the broad awareness and brand recognition of Reddit, including as a result of the popularity of r/ wallstreetbets among retail investors, and the direct access by retail investors to broadly available trading platforms, the market price and trading volume of our Class A common stock could experience extreme volatility for reasons unrelated to our underlying business or macroeconomic or industry fundamentals," Reddit said.

    One of the major takeaways of the COVID-era meme stock mania was how social media can influence the market, underscoring the impact that motivated retail investors can have on stocks.

    Come Reddit's IPO, the same dynamics might again be unleashed.

  • 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:

    Warner Bros. Discovery (WBD): The media and entertainment giant fell nearly 10% Friday afternoon after missing fourth quarter estimates on both the top and bottom line, including a 12% drop in advertising revenue for its networks segment.

    Nextdoor (KIND): The social networking site for neighborhoods rose more than 17% after announcing a change in leadership, with Nirav Tolia, co-founder of the company, returning as CEO and Sarah Friar, the current leader, stepping down. The changeup follows a challenging run on the public markets for the company. Nextdoor has lost more than 70% of its value since its 2021 debut.

    Walmart (WMT): Shares of the nation's largest retailer rose 0.4% Friday morning as investors braced for the company’s 3-for-1 stock split, increasing the company's outstanding shares from 2.7 billion to about 8.1 billion. This split comes amid other employee-friendly initiatives this year, including stock grants for store managers of up to $20,000.

    Intuitive Machines (LUNR): Shares increased 15% Friday after the space company became the first private firm to land a spacecraft on the moon Thursday evening, marking the first return to the lunar surface by an American lander since the Apollo era.

  • Ines Ferré

    Carvana stock surges on first annual profit: 'We didn't disintegrate'

    Carvana stock (CVNA) surged as much as 40% on Friday amid a short squeeze following the used car platform's first ever annual profit and better-than-expected guidance.

    The Tempe, Ariz.-based company results prompted CEO Ernie Garcia to take a victory lap during the company's conference call on Thursday.

    “It's very hard for a group to go through a period like the last two years and not disintegrate under the pressure. We didn't disintegrate,” Garcia told analysts.

    Carvana posted net income of $150 million for 2023, helped by a gain on debt reduction. For the current quarter the company is guiding retail units up slightly on a year-over-year basis, and an adjusted core profit "significantly above $100 million."

    Shares hovered near $70 each on Friday afternoon. Short interest on this stock currently sits just above 32% of the float, according to S3 Partners data.

    The results signal a turning point for a company that faced bankruptcy speculation in December 2022 and a share price as low as $3.55.

    Read more here.

    Correction: A previous version of this story misstated the name of S3 Partners. We regret the error.

  • Hamza Shaban

    Stocks mixed in afternoon trading

    US stocks lost steam on Friday afternoon after a record-breaking rally stoked by AI chipmaker Nvidia's (NVDA) blowout earnings.

    The S&P 500 (^GSPC) rose 0.1%, retreating from bigger gains earlier in the day, while the Dow Jones Industrial Average (^DJI) increased 0.2%. The Nasdaq Composite (^IXIC) also reversed course and headed downward, slipping 0.1%.

  • Hamza Shaban

    Forecasts of an even higher S&P rally

    As high as the S&P 500 (^GSPC) has traveled this year, there's still room to grow.

    Goldman Sachs Research raised its year-end target for the S&P from 5,100 to 5,200, representing a 4% increase from its level last week.

    Chief US equity strategist David Kostin attributes the beefed-up forecast to expectations of stronger economic growth and higher profits from information technology and communication services companies that are powering the gains of the benchmark index.

    That sector, Goldman noted in a briefing on Friday, claims five of the Magnificent Seven stocks, the collection of high-flying names that account for one-third of the S&P 500's market capitalization.

    The upgraded forecast comes as the index breached the 5,000 mark for the first time earlier this month, bucking bearish estimates that have predicted a slowdown on Wall Street.

    But even as fears of a US recession have largely subsided, the year is still defined by uncertainty over the future of the Fed's monetary policy. A recent batch of comments from Federal Reserve officials have underlined that rate cuts are coming, but perhaps further down the road than many investors expect, especially as the stock market rally continues.

  • Hamza Shaban

    The ad woes of Warner Bros. Discovery

    Shares of Warner Bros. Discovery (WBD) sank more than 12% Friday morning after the company reported lower fourth quarter revenue, including a notable drop in advertising revenue for its networks segment.

    Ad revenue for the business unit fell 12% compared to the same period last year. The fall was "primarily driven by audience declines in domestic general entertainment and news networks and soft linear advertising markets mainly in the US," the company said in its earnings report.

    Legacy media businesses across the industry are feeling the advertising squeeze, even as the tech giants are reaping the rewards of an ad spending rebound expected this year.

    WBD's earnings come as other media brands struggle with a changing landscape, including Disney (DIS) and Fox (FOX), whose linear networks business and ad revenue sank, according to their respective quarterly reports.

    Rich Greenfield, a media and technology analyst at LightShed Partners, told Yahoo Finance Live Friday that the turn away from the stock was also tied to the company's unwillingness to offer guidance.

    "The fear that is sitting with investors right now is the concern that numbers are coming down and the inability to guide is another way of saying we're going to be lower that we previously anticipated," he said.

    While WBD is still reporting losses, they are shrinking. WBD reported a loss of $400 million, compared to the loss of $2.1 billion last year.

  • 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:

    Walmart (WMT): Shares of the nation's largest retailer rose 0.4% Friday morning as investors braced for the company’s 3-for-1 stock split, increasing the company's outstanding shares from 2.7 billion to about 8.1 billion. This split comes amid other employee-friendly initiatives this year, including stock grants for store managers of up to $20,000.

    Carvana (CVNA): The used car retailer surged more than 40% after reporting its first-ever annual profit. The company also forecasted a strong first quarter.

    Block (SQ): Shares of the payments company gained 17% Friday morning after the company reported fourth quarter earnings that beat expectations. Block also raised its full-year outlook.

    Intuitive Machines (LUNR): After the space company became the first private firm to land a spacecraft on the moon Thursday evening, shares increased 15% Friday, marking the first return to the lunar surface by an American lander since the Apollo era.

  • Hamza Shaban

    Stocks rise after AI-led rally

    Stocks continued to rise Friday morning, following an AI-led rally that lifted the major indexes into record territory.

    The S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) both edged up by 0.3% and 0.2%, respectively, after closing at all-time highs on Thursday. The Nasdaq Composite (^IXIC) ticked 0.5% higher, riding the momentum following its own record finish from the prior session.

  • Brian Sozzi

    Walmart’s stock price is getting cheaper soon

    Walmart (WMT) investors are gearing up for a stock split later today.

    For the 12th time in 50 years, Walmart will conduct a stock split after the close of trading in an effort to make shares more affordable for its employees, as Yahoo Finance senior reporter Brooke DiPalma reported. Shares will trade on a post-split basis starting Feb. 26.

    Walmart last carried out a 2-for-1 stock split on April 20, 1999. This time, it will be the company's first 3-for-1 stock split.

    This comes amid a flurry of employee-friendly initiatives this year from the world’s largest retailer. The other ones include offering store managers stock grants of up to $20,000 and a higher starting base pay rate.

    I assure you these are not the normal practices in the retail sector. But they should be given the increasing demands on store workers, such as racing around cavernous aisles to fulfill online orders.

    Here’s what Walmart CFO John David Rainey told me on Yahoo Finance Live this week when I asked if there was a cultural reset happening inside the company:

    "You might call it that. It's an interesting characterization of it. Look, I think fundamentally for us, we want to continue to invest in our associates. Fortunately for us, we have the margin profile as a company right now where we can still do that, invest in our associates but also see our operating income grow faster over time.

    "I think a consistent theme through my two-and-a-half decades of work is that when we get the operators of our business, the frontline, to act like owners, that's a very good thing for shareholders as well. So we're very happy to allow our store managers to participate through share ownership with the stock grant."

    What's good for employees could be good for a company's stock price. makes sense!

    Stock splits have generally worked out well for Walmart.
    Stock splits have generally worked out well for Walmart. (Yahoo Finance)
  • Brian Sozzi

    Old tech + new tech = Reddit’s IPO

    Some fun facts from Reddit’s IPO filing last night are below. I did the reading, so you didn’t have to — you’re welcome! I am told by sources familiar with the matter that this listing is likely to go down toward the latter part of March.

    All in all, I am genuinely fascinated by how Reddit was received by investors during the roadshow and then in public markets. For starters, here is an old tech business model (relies on ad revenue) that is trying to cash in on a new business model (licensing content to train AI platforms — see Google news). But while the old tech business model is trying to wade into the newer areas, it continues to lose a lot of money.

    This is a market that seems to reward only money-making tech companies — see Nvidia (NVDA), among others.

    So will investors overlook the losses and ad sales reliance and view Reddit as a future bet on exploding AI usage? I am curious about what you think. Drop me a line on X, formerly known as Twitter, @BrianSozzi.

    We are about to find out the market's views.

    In the meantime, here’s what we do know:

    • AI kingmaker Sam Altman is Reddit’s third-largest shareholder.

    • Tencent (TCEHY) is Reddit’s second-largest shareholder.

    • Including $93.7 million in options rewards and $98.3 million in stock awards, CEO Steve Huffman’s total 2023 compensation stood at $193.2 million.

    • Key call out: “Our Chief Executive Officer, Steven Huffman, holds 662,447 PRSUs for shares of our Class B common stock that are issuable upon achievement of a vesting condition that will be deemed satisfied based on our attaining a $5.0 billion market capitalization valuation following this offering.”

    • Co-founder Alexis Ohanian was not mentioned in the S-1 (Ohanian resigned from the board in 2020).

    • The GameStop (GME) and AMC (AMC) meme stock trading saga from a few years back was mentioned in the company’s risk factor section.

    • Reddit has lost about $178 million on an adjusted EBITDA basis in the past two years combined.

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