News
Stocks Rise After Dow’s Biggest Drop in a Year
US stocks rose on Friday as Wall Street tried to recover Dow’s biggest drop in more than a year.
The S&P 500 (^GSPC) rose about 0.3%, while the Nasdaq Composite (^IXIC) won approximately the same amount. The blue-chip Dow Jones Industrial Average (^DJI) put about 0.1%, or about 50 points.
Renewed concerns about interest rates fueled Thursday’s rout, led by the Dow’s more than 600-point drop. Meanwhile, U.S. Treasury yields rose again, with the benchmark 10-year yield (^ TNX) hovering close to 4.5%.
A thunderous mood turned sour afterwards US business data stronger than expected led to a rethink of the Federal Reserve’s trajectory in terms of interest rates.
Traders are evenly divided on whether the central bank will cut rates at its September meeting, according to the CME FedWatch Tool. This marks a significant change from a few days ago, when only about a third expected the Fed to hold steady during its first meeting of the fall. Goldman Sachs said on Friday it no longer expects the Fed to make its first cut in July, suggesting instead that September would be more likely.
But Wall Street could enter the holiday weekend in a better mood. Nvidia (NVDA), whose last quarter burst spurred an early rally on Thursday, rose 1% on Friday, hovering around $1,040 per share. Your next stock split could further fuel retail interest in your stock.
Highlighting the macroeconomic front Friday is a revised analysis of the University of Michigan consumer sentiment index for May. One Previous readings showed the index plummeted this month as concerns about inflation and interest rates affected Americans’ views on the economy.
Live updates5
- Friday, May 24, 2024 at 5pm GMT+2
Nvidia is the fourth Mag 7 company to split its shares in recent years
from Nvidia (NVDA) upcoming 10-for-1 stock split, which arrived along with its blockbuster earnings reportmarks the fourth separation of the Magnificent 7 companies since 2022.
The trend, according to analysts at Bank of America Global Research, highlights the optimism of such movements, which historically signals optimism on the part of company managers and, for companies that share their shares, pays off with stronger performance. Stock splitters showed gains of 25% a year after the split, compared with 12% for the broader market, according to the note published Friday.
Nvidia (NVDA) follows three other Mag 7 peers that have split their shares over the past two years. Amazon (AMAZN)Alphabet (GOOG, Google) and Tesla (TSLA) have moved to make their shares more affordable, analysts said. And the split also reinforces the tendency of tech companies to pursue shareholder-friendly policies, with dividend introductions or expansions as well as share buybacks.
Technology companies with expensive shares may be inclined to follow their peers into the division. Microsoft and Meta, for example, have share prices above $500, presenting themselves as potential candidates for the split.
Stock trend in morning trading
Here are some of the stocks leading Yahoo Finance trend tickers page during Friday morning trading.
Boeing (BA): Shares of the aircraft maker fell nearly 8% on Friday morning after CFO Brian West warned that he expects slowing fleet deliveries and negative free cash flow.
Bitcoin (BTC-USD): Cryptocurrency value sank 2% after Securities and Exchange Commission move to approve critical rule changes This would allow spot ether (ETH-USD) ETFs to trade. But regulators have not yet given approval to financial managers who want to issue the new products.
Work day (TUESDAY): The enterprise software company fell 11% after cutting your annual subscription guidance in the first quarter results. CFO Zane Rowe said the guidance reflects heightened sales scrutiny and lower employee growth.
Intent (INTU): Shares of the financial software company fell nearly 8% on Friday morning after reporting a decline in low-cost customers for tax preparation services. One million fewer people used TurboTax’s free tax filing service compared with a year ago, the company said, as it lost market share with low-wage customers.
Sonos CEO keeps tariffs real
The rates are simply not a good deal.
Only U.S (THEN NO) CEO Patrick Spence addressed the topic of tariffs in a new episode of my Opening bid podcast – you can watch his comments around the 15 minute mark below. Remember, the business was among those hurt by Trump’s tariffs on China.
Interestingly, since the tariff announcement in China in the last week of the Biden administrationSonos shares lagged.
Also in the clip below: details on the company’s initial foray into the headphone market.
Stocks Rise on Recovery for the Dow
US stocks rose on Friday as Wall Street tried to recoverDow’s biggest drop in more than a year.
The S&P 500 (^GSPC) rose about 0.3%, while the Nasdaq Composite (^IXIC) won approximately the same amount. The blue-chip Dow Jones Industrial Average (^DJI) increased by 0.2%, or about 80 points.
Where are the minds of investors…
Some interesting insights into the psyche of investors from the JP Morgan team this morning.
Its new survey of 850 investors found:
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The asset class with the highest returns in 2024 is expected to be stocks (51%), with the majority maintaining a slightly bullish view on the S&P 500, expecting the index to be between 5,250-5,750 (55%) at the end of the year.
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The majority agreed that the Federal Reserve’s next move will be a rate cut (69%), expected at the September meeting (49%).
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The biggest threat to markets this year has been geopolitical turmoil (cited by 35%) and the resurgence of inflation (32%).
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On the topic of the US presidential election, investors were almost equally divided between whether the Republican (51%) or Democrat (49%) candidate would win.
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30% of respondents expected that a Republican victory would lead to a risk-on environment for markets.
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27% thought that a Republican victory would have no material impact on the market.
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21% expected a Democratic victory to have no material impact on the market.
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