Stock market today: S&P 500 hits fresh record as stocks recover from CPI rout

Ines Ferré, Karen Friar and Josh Schafer
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Stocks popped on Thursday, with the S&P 500 (^GSPC) hitting a fresh record high, despite a disappointing retail sales report that raised questions about a "soft landing" scenario for the US economy.

The Dow Jones Industrial Average (^DJI) rose 0.9%, or almost 350 points, while the tech-heavy Nasdaq Composite (^IXIC) added 0.3%. The S&P 500 was up nearly 0.6% to hit a record closing high of 5,029.73.

Stocks have put an early-week rout in the rearview mirror, recouping all of the steep losses booked Tuesday after a hot inflation print dented hopes for interest rate cuts. Comments from Federal Reserve policymakers playing down the data helped soothe nerves.

But investors are still wondering whether the rout was a one-off, with some seasonal weakness playing a part, or the start of a bigger pullback. Many Wall Street strategists have pointed out that there were signs of resilience even as stocks tumbled.

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

On Thursday, investors turned their focus on January retail sales, which fell 0.8% from the prior month, raising questions about consumer resilience and the chance of a "no landing" scenario for the US.

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  • Josh Schafer

    S&P 500 hits new record as stocks rally

    Stocks popped on Thursday, with the S&P 500 (^GSPC) hitting a fresh record high, despite a disappointing retail sales report that raised questions about a "soft landing" scenario for the US economy.

    The Dow Jones Industrial Average (^DJI) rose 0.9%, or almost 350 points, while the tech-heavy Nasdaq Composite (^IXIC) added 0.3%. The S&P 500 was up nearly 0.6% to hit a record closing high of 5,029.73.

    Energy (XLE) and Real Estate (XLRE) were the big winners on Thursday, both rising more than 2%.

    Source: Yahoo Finance
    Source: Yahoo Finance
  • Josh Schafer

    The S&P 500 has recovered from its Tuesday sell-off

    Stocks had one of the worst days of 2024 on Tuesday as investors digested a hotter-than-expected inflation print. But two trading sessions after the sell-off, the S&P 500 (^GSPC) has now surpassed its closing level on Monday, just before the inflation print.

    This comes as many on Wall Street noted the inflation print could give investors pause. But for now it likely isn't enough to change the overall narrative that a soft landing for the US economy is in sight.

  • Brian Sozzi

    Busy Day at the NYSE...

    Earnings season is just about over, and that means it’s time for top execs to hit the speaking circuit.

    A few examples today: the power players at elevator giant Otis Worldwide (OTIS) and Restaurant Brands International (QSR).

    Otis held an investor day down at the NYSE this morning that ran until noon, and uncorked a rather bullish presentation ahead of the gathering. What stood out to me is Otis calling out 10% adjusted EPS growth for its medium-term planning horizon. That will in part be supported by a whopping $8 billion being returned to shareholders via dividend and buybacks through 2028.

    Two things are clear after reading the 63-page slide-deck: Otis is making a killing modernizing elevators and escalators and servicing older ones. And who said this company isn’t a recurring revenue play!

    I go live with Otis CEO Judy Marks down at the NYSE around 4:20 p.m. ET on Yahoo Finance Live. If you are off the work elevator by then, tune in.

    But before that, I am live with Restaurant Brands CEO Josh Kobza and executive chairman Patrick Doyle (who saved Domino’s Pizza). I saw in the company’s earnings earlier this week a turnaround brewing at Burger King US. Hence, I plan to dive in with them both on that topic.

    That chat is live around 3:45 p.m. ET.

  • Josh Schafer

    Cuts to first quarter economic growth expectations come with a silver lining

    Expectations for economic growth in the first quarter are on the decline.

    The January retail sales report came in weaker than expected on Thursday. Retail sales fell 0.8% in January from the month prior, according to Census Bureau data. Economists had expected a 0.2% decline. The control group in the retail sales report, which many economists include as an input in their GDP forecasts, declined 0.4%.

    Additionally, retail sales for the last two months were revised downward in the release too. In aggregate, the report dampened expectations for first quarter economic growth.

    The Atlanta Fed now sees the economy growing at a 2.9% annualized pace, down from the 3.4% projection made on Feb. 8.

    Source: Atlanta Fed
    Source: Atlanta Fed

    Wall Street economists also lowered their forecasts. Goldman Sachs cut its first quarter GDP estimate from 2.8% to 2.5% after the report. Meanwhile Bank of America now sees 0.8% annualized in the first quarter, down from its initial forecast of 1%.

    But Bank of America US economist Aditya Bhave points out the lower projection for economic growth could cool concerns about the economy running too hot for inflation to continue on its downward trajectory.

    "After the blowout January jobs report and the large beat in CPI inflation, there were growing concerns that the economy was overheating," Bhave wrote in a note to clients on Thursday. "The January retail sales data, along with the revisions, goes a long way toward reducing those concerns."

  • Brian Sozzi

    OpenAI chairman exits stealth mode, and has some thoughts on AI-driven layoffs

    Former Salesforce (CRM) co-CEO and current OpenAI chairman Bret Taylor has exited stealth mode with his new unicorn AI startup, Sierra. He launched it this week with longtime friend from Google Clay Bavor.

    The Silicon Valley wunderkinds (turned more mature tech professionals now in their 40s) told me on Yahoo Finance Live moments ago that the new technology is akin to a customer service bot on steroids. Already, Sonos (SONO), WeightWatchers (WW), and others are customers.

    Naturally when you get a chance to chat with the chair of OpenAI you have to, well, ask about OpenAI and the future of humanity amid the onslaught of AI. Heavy topics, limited time, but you have to ask.

    I thought what Bret told me on two fronts were interesting:

    On jobs:

    “So short term, certainly AI will displace some types of jobs. I think it will also create new types of jobs."

    On AI valuations:

    “As I mentioned I think to a colleague yesterday, there is probably a little bit of froth right now. Maybe the excitement is really high. I think we will look back and say it’s warranted, though. I think this technology can impact our personal and professionals lives in remarkable ways.”

    Sierra has raised $110 million in capital from VC titans Sequoia and Benchmark.

  • Josh Schafer

    Mortgage rates rise as early rate cut hopes dampen

    Mortgage rates are back above 7% as the outlook for interest rates remains in flux.

    Yahoo Finance's Rebecca Chen reports:

    Mortgage rates surged this week with homebuyers retreating from the housing market — taking with them hopes of the Fed cutting rates by the spring buying season as inflation remains higher than expected.

    The average mortgage rate for a 30-year fixed loan surged past 7% from 6.97% a week prior and peaked at 7.13% on Feb 13, according to the Mortgage News Daily index. Rates have been increasing over the last seven days, settling 7.03% today.

    A separate tracker showed a similar week-over-week rise in borrowing costs, with the average 30-year mortgage rate climbing to 6.77% from 6.64% a week prior, according to Freddie Mac's latest release.

    Borrowing costs are proving stubbornly high, even as the economy remains robust, with inflation hitting above economists' expectations in January. The US Consumer Price Index (CPI) gained another 0.3% month over month and grew 3.1% annually, according to data from the Bureau of Labor Statistics released on Tuesday. Economists surveyed by Bloomberg forecasted decelerated monthly growth of 0.2% and an annual gain of 2.9%.

    Taken together, it suggests the Federal Reserve's fight with inflation will last longer than previously thought, an unhopeful sign for homebuying affordability.

    "Rate cuts that the market expected in the first half of this year may simply not materialize because strong January economic data raised the risk that disinflation could be stalling," said Orphe Divounguy, a senior economist at Zillow.

  • Josh Schafer

    Nvidia's investments in these AI companies sent their stocks soaring

    Investors can't get enough of Nvidia (NVDA). Now, the company is spreading that love to other stocks.

    On Wednesday night, an SEC filing revealed the chipmaking giant held investments in the stocks Arm Holdings (ARM), SoundHound AI (SOUN), and biotech company Recursion Pharmaceuticals (RXRX) as of Dec. 31, 2023.

    All three of the AI-related stocks popped on the news. Arm, whose stock was already up more than 80% in the last month after the company attributed its better-than-expected revenue expectations to AI initiatives, saw a modest 1% gain on the news. Recursion's stock rose nearly 10%.

    Meanwhile, SoundHound, a smaller player that specializes in voice AI and speech recognition, saw a huge gain. The stock was on track for its best day ever at the open, popping about 80% before paring gains to more than 60% on Thursday afternoon.

    Still, the massive price move in SoundHound, which had been down more than 40% over the last year, reaffirms market enthusiasm for Nvidia and other names associated with the stock.

  • Ines Ferré

    Stocks mixed, tech hits pause button on rebound

    Stocks were mixed on Thursday as Technology stocks (XLK) hit the pause button on a rebound.

    Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Nvidia (NVDA) all fell more than 1% while Alphabet (GOOG,GOOGL) shares sank as much as 3%.

    The Nasdaq Composite (^IXIC) slid about 0.2% while the S&P 500 (^GSPC) gained 0.2%. The Dow Jones Industrial Average (^DJI) rose as much as 0.5% as components JPMorgan (JPM) and Disney (DIS) both hit 52-week highs.

    The S&P 500 Energy Select ETF (XLE) was the biggest gainer among the sectors on Thursday, up more than 2%.

  • Ines Ferré

    Alphabet falls on worries of potential OpenAI search rival

    Alphabet (GOOG) (GOOGL) shares sank as much as 3% on Thursday, dragging on the Nasdaq Composite (^IXIC) amid investor worries over competition stemming from OpenAI.

    The owner of ChatGPT is reportedly working on a search engine that would compete with Google search, according to a report from The Information.

    Several of the mega tech names were under pressure on Thursday as Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Nvidia (NVDA) all fell more than 1%.

    On Wednesday chipmaker Nvidia overtook Alphabet as the third-most-valuable company in the US.

  • Dani Romero

    Homebuilder confidence rises for third consecutive month as mortgage rates decline

    Homebuilders are feeling more confident about the housing market as a decline in mortgage rates bolsters expectations of stronger demand from buyers.

    The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) rose 4 points to 48 in February, marking the third consecutive month that sentiment gained and the highest level since August 2023. Economists polled by Bloomberg were anticipating a reading of 46.

    The continued enthusiasm reflects the strength of the newly constructed home market and expectations that mortgage rates will continue to move lower, fueling more buyer appetite.

    “Buyer traffic is improving as even small declines in interest rates will produce a disproportionate positive response among likely home purchasers,” said NAHB Chairman Alicia Huey, a custom home builder and developer from Birmingham, Ala., in a press release.

    “And while mortgage rates still remain too high for many prospective buyers, we anticipate that due to pent-up demand, many more buyers will enter the marketplace if mortgage rates continue to decline this year.”

    Mortgage rates have softened from their near 8% peak last year, and more builders are cutting back on reducing home prices to boost sales. In February, 25% of builders reported cutting home prices, down from 31% in January and 36% in the last two months of 2023.

    Meanwhile, the share of builders offering some form of incentive dropped to 58% in February, down from 62% in January and the lowest share since last August.

  • Ines Ferré

    JPMorgan and Disney hit 52-week highs

    The Dow Jones Industrial Average (^DJI) rose 0.5% as components JPMorgan (JPM) and Disney (DIS) both hit 52-week highs.

    Disney shares are up about 13% since the entertainment giant posted a beat on its quarterly earnings last week.

    JPMorgan is up about 6% over the past month amid an overall rally in financials stocks.

    On Thursday the S&P 500 (^GSPC) rose 0.2%, following a solid recovery in the prior session that saw the benchmark top the 5,000 mark again.

    The the tech-heavy Nasdaq 100 (^NDX) fell about 0.2% during the session.

    January retail sales fell 0.8% from the month prior. Economists had been expecting a drop of 0.2% in spending. The worse-than-expected reading raises questions of whether America's resilient consumer could be losing steam.

  • Ines Ferré

    Stocks little changed after retail sales tumble

    The S&P 500 (^GSPC) hugged the flatline on Thursday, coming off a solid recovery that saw the benchmark top the 5,000 mark again.

    The Dow Jones Industrial Average (^DJI) and the tech-heavy Nasdaq 100 (^NDX) were also little changed at the open.

    Investors turned their focus on fresh economic data out Thursday. Retail sales fell 0.8% in January from the month prior versus expectations for a drop of 0.2% in spending, according to Bloomberg data. The reading raises questions about whether America's resilient consumer could be losing steam.

  • Brian Sozzi

    Cisco said everything you don't want to hear from a tech company right now

    Cisco (CSCO) shares are one of the top trending tickers on Yahoo Finance right now, getting smoked by about 4% in premarket trading.

    The move down makes all sorts of sense.

    The company said everything an investor doesn't want to hear from a tech giant on its earnings day: inventory corrections, lower demand, an uncertain outlook, and worse-than-expected guidance. I can go on, but why?

    Wall Street is letting Cisco execs have it this morning in the wake of another guide down. The most vocal of the group: Jefferies analyst George Notter.

    "We’re not really buying their comments about a softer macro environment also impacting the business. Also, we have ongoing concerns re: market share," Notter said in a client note. The headline on that note is Second Trip Through the Inventory Correction Confessional.

    Ouch.

    The saving grace for Cisco bulls: Execs said on last night’s earnings call that the company’s $28 billion deal for Splunk will likely close early, by the end of the second quarter. Once the business is in Cisco’s house, the company's CFO will probably recast guidance higher to factor in the earnings power of Splunk.

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