February 28, 2024

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Stocks rose after a massive sell-off on Fed Day as big tech companies boomed

Stocks rose after a massive sell-off on Fed Day as big tech companies boomed

US stocks rose on Thursday after the worst sell-off in months on Wall Street, as investors reset their timeline for interest rate cuts from the Federal Reserve and braced for a strong round of huge technology profits.

The S&P 500 (^GSPC) rose 0.8%, while the Dow Jones Industrial Average (^DJI) rose 0.6%. The Nasdaq Composite Index (^IXIC), which suffered a more than 2% decline on Wednesday, traded nearly 1% higher.

The financial world is moving fast and furious this week, but the Federal Reserve remained the focus of attention Thursday morning. Federal Reserve Chair Jerome Powell, while cementing a pivot in the central bank's interest rate plans, gave investors looking for quick rate cuts a wake-up call. He hinted that he viewed the bank as unlikely to start cutting interest rates at the Fed's next meeting in March, something that was largely viewed as frustration earlier this week.

In fact, according to the CME FedWatch tool, investors were calculating about a two-thirds chance of holding again at the March meeting, while almost all bets are on a small — or larger — cut in May.

Meanwhile, members of the “Magnificent Seven” will take center stage after the closing bell, as Apple (AAPL), Amazon (AMZN), and Meta (META) are scheduled to report earnings. Tuesday's first batch of Big Tech results from Microsoft (MSFT) and Alphabet (GOOGL, GOOG) failed to meet investors' lofty expectations, helping those stocks slide.

And we shouldn't forget that the economic world has another narrative-fueling data point waiting for it this week. Investors will get a quick glimpse into the January labor market with Friday's non-farm payrolls report.

He lives7 updates

  • The Federal Reserve Bank of Atlanta now expects growth of 4.2% in the first quarter of 2024

    On Wednesday, Federal Reserve Chairman Jerome Powell praised the US economy's resilience despite rising interest rates, noting that the economy is “expanding at a strong pace.”

    The latest forecasts from the Federal Reserve Bank of Atlanta show that there may be no signs of a slowdown in sight.

    On Thursday, RGDP Now at the Federal Reserve Bank of Atlanta First-quarter economic growth estimates rose to 4.2% from 3% on January 26 after new data from the Consensus Bureau showed that construction spending rose more than expected in December, and a new reading from the ISM Industrial Business Report showed declines in the sector had risen. . It will probably hit bottom.

    It is worth noting that this expectation comes amid a shift in how investors receive economic news. After moments in the Fed's rate hike cycle where positive economic developments were seen as a potential risk to inflation and thus some believed they could lead to further rate hikes, Powell backed away from that narrative on Wednesday.

    “We're not looking [economic growth] “As an issue. I think at this point we want to see strong growth. We want to see a strong labor market. We are not looking for a weaker labor market. We expect inflation to continue to decline, as it has been declining over the past six months,” he said.

  • Mortgage rates fall below 7%

    Mortgages fell for the second time in 2024, according to new data released Thursday.

    Rebecca Chen of Yahoo Finance reports:

    The US housing market is expected to see a warm return this spring, thanks to quiet economic data.

    The average interest rate on a 30-year loan fell to 6.63% from 6.69% the week before, Freddie Mac said Thursday. Mortgage rates fell for a second time in 2024, and are expected to fall further as inflation moderates, which could help the housing sector rebound.

    As most indicators indicate To lower interest rates next yearHousing experts expect the spring buying season to be busier starting in the next couple of months as more supply and demand return to the housing market, thanks to lower mortgage rates.

    “As long as core inflation and economic activity continue to moderate, mortgage rates are not expected to rise further,” said Orvi Devongi, chief macroeconomist at Zillow. “If layoffs remain low and mortgage rates decline, housing market activity should rebound modestly this spring — meaning more listings coming on the market and more sales.”

  • Amazon stock rises ahead of earnings announcement

    Shares of Amazon (AMZN) rose more than 1% on Thursday ahead of the e-commerce giant's quarterly earnings results after the bell.

    As Yahoo Finance's Hamza Shaaban reports, the Seattle-based company joins two trillion-dollar giants to complete a week defined by high expectations and disappointment over technology results.

    Amazon's role in the wave of Big Tech reports will likely provide updates on the development of artificial intelligence and its lucrative cloud business.

    Below is a breakdown of what analysts expect from the company's upcoming results.

  • Peloton stock fell 22% on weak guidance

    Peloton (PTON) stock fell 22% on Thursday, and is set to close at a record low, after the connected fitness platform posted disappointing revenue guidance.

    The company expects third-quarter revenue to range between $700 million and $725 million, below Wall Street expectations of $753.8 million.

    “While we continue to outperform the connected fitness market, our biggest challenge remains growing at scale,” the company's shareholder letter issued Thursday said.

    Peloton has partnered with Amazon (AMZN) and LuluLemon (LULU) as part of its growth initiatives.

    Shares of the interactive bike maker are a far cry from their pandemic highs when customers were clamoring for at-home exercise equipment. User growth began to wane after nationwide lockdowns were lifted and thereafter Call voluntary devices.

  • Big Tech companies lead recovery after Fed day selloff

    Big Tech stocks led Thursday's rebound after heavy selling in the previous session after the Federal Reserve kept interest rates steady and delayed investors' expectations for cuts.

    The S&P 500 Technology Sector ETF (XLK) rose 0.9%, while telecom services stocks and consumer discretionary stocks also rose.

    Shares of e-commerce giant Amazon (AMZN) and social media platform Meta (META) rose nearly 2% on Thursday. Both companies are scheduled to report their 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) rose 0.7% after falling more than 2% on Wednesday.

    Heat map of the Nasdaq 100 on February 1 at 10:15 a.m. ETHeat map of the Nasdaq 100 on February 1 at 10:15 a.m. ET

    Nasdaq 100 heat map on February 1 at 10:15 a.m. ET.

  • Stocks rose after a sharp sell-off and more profits from big technology companies

    Stocks rose on Thursday after a heavy sell-off after the Federal Reserve hinted that investors would have to wait until after March to make any interest rate cuts.

    The S&P 500 (^GSPC) is slightly higher, while the Dow Jones Industrial Average (^DJI) is hovering near the flat line. The Nasdaq Composite (^IXIC) opened 0.6% higher after falling more than 2% on Wednesday.

    More Big Tech earnings will be announced after the closing bell on Thursday, as Apple (AAPL), Amazon (AMZN) and Meta (META) are scheduled to report their quarterly results.

    Results from Microsoft (MSFT) and Alphabet (GOOGL, GOOG) earlier this week failed to meet investors' lofty expectations. On Wednesday, Alphabet shares fell more than 7%.

  • Layoffs announced in January were high, but also down

    January Job cuts report Staffing firm Challenger, Gray & Christmas showed Thursday morning that layoff announcements were on the rise in January compared to December, but also down significantly from what we saw a year ago.

    Last month, the company 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 this decline from last year's total, January 2024 saw the third-highest number of January layoff announcements since 2009.

    Initial unemployment claims data Out Thursday It also showed a slight uptick in the number of first-time claims for unemployment insurance, with claims totaling 224,000 last week, up from 9,000 the week before.

    However, this overall level of initial claims remains near historic lows.

    Both reports come ahead of the January jobs report on Friday and follow Federal Reserve Chair Jerome Powell's comment on Wednesday that the labor market continues to be better balanced.

    However, Powell noted that the supply of available workers is still less than the total demand for jobs — meaning there is more than one job open for every person looking for work right now.