Wall Street stocks popped on Thursday, as investors weighed hotter-than-expected retail sales and wholesale price inflation data for a steer on what path the Federal Reserve will take on rates policy.
The S&P 500 (^GSPC) gained 0.8%, while the Dow Jones Industrial Average (^DJI) ticked up almost 1%, or about 330 points. The Nasdaq Composite (^IXIC) added around 0.8%, as British chipmaker Arm (ARM) popped more than 25% in its public debut.
Thursday's reading on retail sales for the same month came in stronger than they were in July, underscoring how the US consumer has remained resilient despite rising interest rates. Sales grew 0.6% on the month, compared with 0.1% expected, picking up steam as people shelled out more for gas.
The Producer Price Index increased 0.7% in August, up from 0.4% the previous month, data out Thursday showed — a sign that inflation remains stubbornly persistent despite the Fed's efforts to cool pressures. But at the same time, "core" wholesale inflation rose 2.2%, down from July's print of 2.4%.
Arm's debut on the Nasdaq on Thursday comes after the SoftBank-backed chip designer priced its blockbuster IPO at the top of the range at $51 per share for a $54.5 billion valuation. The stock quickly rose above $57 per share in the first 15 minutes of trading, ending the day at $63.59.
Elsewhere, the European Central Bank hiked its interest rates for the 10th time in a row, to 4% — the highest level since the euro was launched in 1999. ECB policymakers also upped their inflation forecast, which they expect to remain too high for too long.
Stocks rally into the close
All three of the major averages picked up steam throughout the afternoon as investors digested a stronger than expected August retail sales report which did little to change that market participants see the Federal Reserve keeping interest rates flat at its policy meeting next week.
Trending tickers on Thursday afternoon
Nikola (NKLA) stock surged more than 30% as the electric-vehicle maker announced plans to start selling its hydrogen fuel-cell trucks later in September.
Shares of Carvana (CVNA) surged nearly 13% as the auto sector came into focus late Thursday. Workers at Ford (F), GM (GM), and Stellantis (STLA) had threatened to strike if a new contract isn't reached by a 11:59 p.m. ET deadline on Thursday.
Netflix stock drops again on CFO's soft outlook
Netflix (NFLX) stock dropped another 2% on Thursday after closing down 5% the previous day following comments from CFO Spencer Neumann at Bank of America's Media, Communications, and Entertainment Conference on Wednesday.
Neumann touched on multiple facets of the business but disappointed investors with his comments on operating margins. The executive said he anticipates operating margins, which peaked at 21%, to be in the range of 18% to 20%. Current consensus estimates are just below 20%.
Neumann went on to explain he expects margins to "tick up again going forward" as the company leans on multiple revenue initiatives, such as the crackdown on password sharing and ad-supported offering.
But he warned both of those initiatives, especially the advertising business, will take time to mature.
"We're still in the crawl of the crawl-walk-run stage, so it is not easy to build an ad business from scratch. We got a lot of work to do," he said.
He added that "as you've seen in our guidance, what we've done so far is not material to the overall revenue of the business. It's something we're building into and we have to get better across the board."
Neumann said the company needs to "scale the reach" of its ad tier, explaining, "Advertisers want a scaled solution. So that is the number one priority. And then number two is to better monetize that reach."
Based off of Neumann's comments, Pivotal Research analyst Jeffrey Wlodarczak lowered his fourth-quarter average revenue-per-user (ARPU) growth expectations to 2% from 4%, in addition to reducing his Q4 revenue forecast to $8.73 billion — down from the prior $8.89 billion.
Arm's significance for IPO market
British chipmaker Arm (ARM) jumped nearly 20% on its first day of trading and could spark excitement for the IPO market.
The chipmaker's go-public is the most high-profile IPO that the Nasdaq has seen since 2021's IPO boom, which cycled into a bust in 2022.
Since then, the IPO market has been relatively quiet, picking up slowly with the IPOs of beauty company Oddity (ODD) and Mediterranean restaurant chain Cava (CAVA) over the summer. That trickle has grown into, at minimum, a stream of IPOs, with Arm's opening and the recent filings of Instacart (CART) and Klaviyo.
"This could be a lot more important than people realize," Miller Tabak strategist Matt Maley told Yahoo Finance Live ahead of the IPO on Thursday. "If [Arm] does well, that’s certainly going to help open up things for a market that’s been dormant for over a year now. It’s also going to tell us something about this whole thing with AI. There’s still plenty of hype surrounding it but not the big euphoria."
Arm skyrockets more than 20% in first minutes trading
SoftBank's Arm Holdings (ARM) jumped as much as 20% in its first few minutes trading on the Nasdaq stock exchange. Shares of the British chip designer initially opened at $51.60 on Thursday before advancing beyond $61 in early trading.
Trending tickers in morning trade
Arm Holdings (ARM) led the Yahoo Finance trending ticker page all morning as investors eagerly awaited the stock to begin trading on the Nasdaq.
Nikola (NKLA) stock surged more than 20% as the electric-vehicle maker announced plans to start selling its hydrogen fuel-cell trucks later in September.
Netflix (NFLX) extended losses for a second-straight day, falling more than 1%, after the company's CFO Spencer Neumann said the Hollywood writer's strike is "not good for business."
United Auto Workers nears strike with Big Three automakers
The UAW union says it is planning several coordinated strikes at select Big Three auto plants to exercise maximum bargaining leverage, as the Thursday 11:59 p.m. ET deadline to produce a new deal with Ford, GM, and Stellantis fast approaches.
In a Facebook Live video address to members, UAW President Shawn Fain said the Big Three automakers have extended improved offers to the union, but haven’t come close enough to where the union wants to be — specifically around issues including the elimination of wage tiers and a defined pension plan, which Fain says the automakers have rejected.
“We do not yet have offers on the table that reflect the sacrifices and contributions our members have made to these companies,” Fain said in the video to members. “To win we're likely going to have to take action. We are preparing to strike these companies in a way they've never seen before.”
In order to get the automakers to meet the UAW's demands, Fain outlined a tactic known as a "stand up" strike. Instead of striking at all plants all at once, select local UAW chapters will be called on to “stand up” and walk out on strike. The UAW says as time goes on, more locals may be called on to join the strike, giving what the UAW says is "maximum leverage and maximum flexibility" in negotiations with the automakers.
Meanwhile, other chapters who have not been called to strike will keep working. This allows the UAW to keep its $825 million "strike fund" going as long as possible while the union pursues its strategy of striking at all three automakers in a select way. "We're going to hit where we need to hit," Fain said.
AMC jumps on cash infusion
AMC (AMC) stock jumped as much as 9% in early trading on Thursday after the theater chain announced it received approximately $325.5 million of new equity capital through the sale of 40 million shares.
The company said Wednesday the completion of the equity offering, which initially led to volatile stock swings amid investor concerns over share dilution, "significantly boosts AMC's cash reserves," in addition to "addressing current liquidity concerns" as the company works to strengthen its balance sheet after the pandemic hammered its business.
“The successful completion of this equity offering marks another significant milestone for AMC," President and CEO Adam Aron said in a statement. "Raising more than $325 million in gross proceeds has bolstered our ability to survive and then thrive."
"As we navigate the recovery phase of our industry, this infusion of capital provides us with flexibility to assist us in navigating the waters ahead and continue delivering the magic of movies to our guests," he continued.
The news comes as AMC has enjoyed lofty box office sales following the stunning debuts of "Barbie" and "Oppenheimer" this past summer.
The chain will also have one blockbuster theatrical event to look forward to — Taylor Swift's Eras Tour movie.
Stocks open higher amid stronger-than-expected economic data
Stocks were higher at the open on Thursday as a rise in energy prices drove stronger-than-expected retail sales in August but did little to change investor sentiment that the Federal Reserve won't hike interest rates at its policy meeting next week.
Visa, HP, and AMC: Stocks trending in premarket trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in premarket trading on Thursday:
Visa (V): Shares rose 2% on Thursday. Paysend, the UK fintech group, and Visa announced a strategic collaboration on Thursday, enabling Paysend’s customers globally to send money in real-time to eligible Visa cards across 170 countries and territories.
HP (HPQ): Shares fell 3%. On Thursday, the group unveiled its HP Spectre Foldable PC.
AMC Entertainment (AMC): AMC stock rose 6% premarket. The entertainment group said it raised $325.5 million through the sale of 40 million shares it began offering on September 6. AMC said the cash could help the theater chain in its recovery.
Nauticus (KITT): The developer of ocean robots and artificial intelligence for autonomous services to offshore industries saw its share price rise 12% premarket on Thursday after announcing it had entered into a service contract with Shell.