US stocks pressed higher on Thursday after the worst sell-off in months on Wall Street, as investors recalibrated their timeline for rate cuts from the Federal Reserve and prepared for a heavy-hitting round of mega-cap tech earnings.
The benchmark S&P 500 (^GSPC) rose 1.2%, while the blue-chip Dow Jones Industrial Average (^DJI) gained almost 1%. The tech-heavy Nasdaq Composite (^IXIC), which suffered a more than 2% decline Wednesday, led the gains on Thursday rising 1.3%.
The financial world is moving fast and furious this week, but the Fed remained the focus Thursday morning. Fed Chair Jerome Powell, while cementing a pivot in the central bank's rate plans, gave investors looking for quick interest rate cuts a wake-up call. He hinted that he views it unlikely that the bank would begin to cut rates at the Fed's next meeting in March, something that was viewed largely as a toss-up earlier this week.
Indeed, according to the CME FedWatch tool, investors were pricing in about a two-thirds chance of another hold at the March meeting, while almost all bets are on a small — or larger — cut come May.
Meanwhile, members of the "Magnificent Seven" took center stage after the closing bell, with Apple (AAPL), Amazon (AMZN), and Meta (META) all reporting earnings.
Shares of Meta skyrocketed more than 12% after hours as the company topped Wall Street's earnings estimates, issued a $50 billion share buyback, and announced a $0.50 cash dividend. Amazon stock also gained, adding more more than 4% in post-market trade, after the company reported fourth quarter earnings that beat analysts' expectations and delivered an optimistic outlook for the months ahead.
Additionally, Apple's revenue topped Wall Street's estimates but concerns over slowing sales growth in China appeared to weigh on shares ahead of the company's earnings call.
This marked a reversal from Tuesday's first batch of Big Tech results from Microsoft (MSFT) and Alphabet (GOOGL, GOOG) which failed to live up to investors' lofty expectations, helping send those stocks lower.
Lest we forget, the economic world has one more narrative-fueling data point waiting this week. Investors will get a snapshot of January's job market with Friday's nonfarm payrolls report.
LIVE COVERAGE IS OVER13 updates
Josh Schafer
Apple returns to revenue growth, beats street estimates
Apple (AAPL) stock fell as much as 1.5% in after-hours trading on Thursday after the company reported stronger revenue growth than Wall Street expected, but revealed sales in China slowed in its most recent quarter.
In the quarter, Apple saw earnings per share of $2.18 on revenue of $119.6 billion. Analysts were anticipating earnings of $2.11 on revenue of $117.9 billion.
In the quarter, Apple reported iPhone sales of $69.7 billion versus expectations of $68.6 billion. But sales out of China, the company's third-largest region after North American and Europe, were lower than anticipated, topping out at just $20.8 billion. Wall Street was looking for sales of $23.5 billion.
Apple is dealing with both a sluggish Chinese economy as well as a resurgent Huawei in the country, which has hurt sales in the region.
"Today Apple is reporting revenue growth for the December quarter fueled by iPhone sales, and an all-time revenue record in Services," Apple CEO Tim Cook said in a statement. "We are pleased to announce that our installed base of active devices has now surpassed 2.2 billion, reaching an all-time high across all products and geographic segments."
Apple's Mac revenue topped out at $7.8 billion in the first quarter, just missing analysts' expectations of $7.9 billion. The company's iPad revenue also missed at $7 billion. Wall Street was looking for $7.1 billion. That's a steep drop from the $9.4 billion the iPad business generated last year.
Josh Schafer
Meta stock roars on boosted dividend, $50 billion buyback
Meta Platforms (META) stock rose as much as 12% after hours following an impressive fourth quarter report that saw the company beat expectations and post a first quarter outlook ahead of estimates, while also announcing a a $50 billion buyback authorization and issuing a cash dividend for the first time.
For the quarter Meta reported adjusted earnings per share of $5.33 on revenue of $40.11 billion. Analysts were anticipating adjusted EPS of $4.94 on revenue of $39.01 billion, according to Bloomberg consensus data. The company reported revenue of $32.2 billion in the same quarter last year.
For the current quarter, Meta said it anticipates revenue of between $34.6 billion and $37 billion, surpassing analysts' expectations for $33.6 billion.
Josh Schafer
Amazon jumps after hours on net income beat, sales guidance
Amazon (AMZN) stock jumped more than 4% after hours as the company's net income topped Wall Street estimates and its sales outlook for the current quarter matched expectations.
Net sales came in at nearly $170 billion versus expectations of $166.2 billion. That's higher than the almost $150 billion the company generated during the same period in the prior year. The outlook for the current quarter also surpassed forecasts, with the company estimating an upper range of $143.5 billion.
Here are some of Amazon's most significant metrics compared to what Wall Street was expecting in the company’s fiscal fourth quarter, according to data from Bloomberg:
Revenue: $169.9 billion vs. $166.2 billion expected ($149.2 billion in Q4 2022)
Adjusted earnings per share: $1.00 vs $0.78 expected ($0.03 in Q4 2022)
Amazon Web Services: $24.20 billion vs $24.22 billion expected ($21.4 billion in Q4 2022)
Josh Schafer
Stocks bounce back after rough Fed day
US stocks pressed higher on Thursday after the worst sell-off in months on Wall Street, as investors recalibrated their timeline for rate cuts from the Federal Reserve and prepared for a heavy-hitting round of mega-cap tech earnings.
The benchmark S&P 500 (^GSPC) rose 1.2%, while the blue-chip Dow Jones Industrial Average (^DJI) gained almost 1%. The tech-heavy Nasdaq Composite (^IXIC), which suffered a more than 2% decline Wednesday, led the gains on Thursday rising 1.3%.
Josh Schafer
A chart to watch in the January jobs report on Friday
The monthly labor report from the Bureau of Labor Statistics, slated for release at 8:30 a.m. ET, is expected to show nonfarm payrolls rose by 185,000 in January while the unemployment rate ticked up to 3.8% from the previous month, according to consensus estimates compiled by Bloomberg. In December, the US economy added 216,000 jobs while unemployment unexpectedly remained flat at 3.7%.
EY chief economist Gregory Daco wrote on X he believes the labor market is softening but it won't appear in Friday's headline payroll additions number. Instead, Daco will be watching for a lack of breadth in job gains.
"As in prior months, softening is visible in the reduced diffusion of job growth across sectors, the reduced hours worked & easing aggregate payrolls index," Daco wrote.
This trend was recently flagged by JPMorgan chief US economist Michael Feroli in the Yahoo Finance Chartbook as a reason job growth could slow in 2024.
Alexandra Canal
Disney password-sharing crackdown to hit Hulu users
It's official: Streaming's password-sharing crackdown will hit Hulu users next.
Disney (DIS), which fully owns the platform after purchasing Comcast's (CMCSA) minority stake late last year, announced updates to its Hulu subscriber agreements and added additional terms on its sharing policies. The changes will go into effect on March 14.
"We're adding limitations on sharing your account outside of your household, and explaining how we may assess your compliance with these limitations," the company wrote in a note to subscribers on Wednesday.
Disney CEO Bob Iger, who previously said the number of subscribers sharing accounts is "significant," first revealed the company will address password sharing during its fiscal third quarter earnings call in August.
Disney stock is up about 6% year to date compared to the S&P 500's (^GSPC) 2% gain over that same time period. The company will report earnings on Feb. 7.
Atlanta Fed now sees 4.2% growth in first quarter of 2024
On Wednesday, Federal Reserve Chair Jerome Powell praised the resilience seen in the US economy despite higher interest rates noting the economy has "been expanding at a solid pace."
And the latest projections from the Atlanta Fed show there may be no signs of slowing on the horizon.
Of note, this projection comes amid a shift in how economic news could be received by investors. After moments in the Fed hiking cycle where positive economic developments were viewed as a potential risk for inflation, and therefore some thought could lead to more interest rate hikes, Powell backed off that narrative on Wednesday.
"We don’t look at [economic growth] as a problem," he said. "I think at this point we want to see strong growth. We want to see a strong labor market. We’re not looking for a weaker labor market. We’re looking for inflation to continue to come down, as it has been coming down for the last six months."
Josh Schafer
Mortgage rates slide further below 7%
Mortgages fell for the second time in 2024, according to new data released Thursday.
The US housing market should experience a warm return this spring, thanks to calming economic data.
The average rate for a 30-year loan declined to 6.63% from 6.69% the week prior, according to Freddie Mac on Thursday. Mortgage rates dropped for the second time in 2024 and are expected to retreat further as inflation moderates, which could help spark a housing rebound.
As most indicators point to interest rate cuts this coming year, housing experts are predicting a busier spring buying season starting in the next couple of months as more supply and demand return to the housing market, thanks to the mortgage rate drop.
"So long as core inflation and economic activity continue to moderate, mortgage rates aren't expected to rise further," said Orphe Divounguy, senior macroeconomist at Zillow. “If layoffs remain low, and mortgage rates ease, housing market activity should rebound modestly this spring – meaning more listings coming on the market and more sales."
Ines Ferré
Amazon stock drifts higher ahead of earnings release
Amazon (AMZN) shares were up more than 1% on Thursday ahead of the e-commerce giant's quarterly earnings results after the bell.
Here's a breakdown of what analysts expect from the company's upcoming results.
Ines Ferré
Peloton stock sinks 22% on weak guidance
Peloton (PTON) stock was down 22% on Thursday, set to close at a record low, after the connected fitness platform posted disappointing revenue guidance.
The company expects third quarter revenue in the range of $700 million to $725 million, below Wall Street expectations of $753.8 million.
"While we continue to outperform the connected fitness market, our biggest challenge continues to be growth, at scale," read the company's shareholder letter released on Thursday.
Peloton has struck partnerships with Amazon (AMZN) and LuluLemon (LULU) as part of its growth initiatives.
Shares of the interactive bike maker are far off their pandemic highs when customers were clamoring for at-home exercise equipment. User growth started waning following the lifting of nationwide lockdowns and after some voluntary hardware recalls.
Ines Ferré
Big Tech leads rebound following Fed day sell-off
Big Tech stocks led Thursday's rebound following a heavy sell-off in the prior session after the Federal Reserve kept rates steady and delayed investors' expectations for cuts.
The S&P 500 Technology Sector ETF (XLK) gained 0.9%, while Communication Services and Consumer Discretionary stocks also gained.
E-commerce giant Amazon (AMZN) and social media platform Meta (META) each gained roughly 2% on Thursday. Both companies are set to report quarterly results after the closing bell, along with iPhone maker Apple (AAPL).
The S&P 500 (^GSPC) rose 0.5% on Thursday. The Nasdaq Composite (^IXIC) gained 0.7% after declining more than 2% on Wednesday.
Nasdaq 100 heat map on Feb. 1 at 10:15 a.m. Eastern.
Ines Ferré
Stocks inch higher following steep sell-off, more Big Tech earnings on tap
Stocks edged higher on Thursday following a sell-off after the Federal Reserve hinted investors would have to wait beyond March for any rate cuts.
The S&P 500 (^GSPC) rose fractionally, while the Dow Jones Industrial Average (^DJI) hovered near the flatline. The Nasdaq Composite (^IXIC) opened 0.6% higher after declining more than 2% on Wednesday.
More Big Tech earnings are on tap after the closing bell on Thursday, with Apple (AAPL), Amazon (AMZN), and Meta (META) set to report quarterly results.
Microsoft (MSFT) and Alphabet (GOOGL, GOOG) results earlier this week failed to live up to investors' lofty expectations. On Wednesday, Alphabet shares declined more than 7%.
Myles Udland
Layoffs announced in January were up, but also down
The January job cuts report from staffing firm Challenger, Gray & Christmas out Thursday morning showed that layoff announcements were on the rise in January compared to December, but also down notably from what we saw a year ago.
Last month, the firm counted 82,307 job cut announcements, up 136% from December but down 20% from the 102,943 cuts announced this month last year.
But even with that decline from last year's total, January 2024 saw the third-highest number of layoff announcements of any January since 2009.
Initial jobless claims data out Thursday also showed a slight uptick in the number of first-time filings for unemployment insurance, with claims totaling 224,000 last week, up from 9,000 in the prior week.
Still, this overall level of initial claims remains near historic lows.
Both reports come ahead of Friday's January jobs report and follow commentary from Fed Chair Jerome Powell on Wednesday that said the labor market continues to come into better balance.
Powell did note, however, that the supply of available workers is still lower than overall job demand — that is, there is more than one job open for each person seeking work right now.
Donald Trump’s aides have drawn up secret plans to oust the chairman of the Federal Reserve and allow the president to set interest rates, according to reports.
A month after a higher state minimum wage for fast-food workers went into effect, consumers picking up burgers and burritos at chains in the Golden State grapple with prices rising at a faster clip than in other states.
“When she died, we were told by her attorney that we were responsible for the taxes and property insurance during the time when the life tennant lives in the home.”
SHANGHAI (Reuters) -A private jet linked to Tesla CEO Elon Musk landed in Beijing on Sunday, a flight tracking app showed, as two people with knowledge of the matter said the billionaire was kicking off a surprise visit to the automaker's second-biggest market. Musk is seeking to meet senior Chinese officials in Beijing to discuss the rollout of Full-Self Driving (FSD) software in China and to obtain approval to transfer data collected in the country abroad to train algorithms for its autonomous driving technologies, one of the people said. Tesla has since 2021 stored all data collected by its Chinese fleet in Shanghai as required by Chinese regulators and has not transferred any back to the United States.
