Stock market today: Stocks climb as Fed rate-hike fears fade, with Apple on deck - Yahoo Finance

US stocks strode higher Thursday in a calm after the Fed day storm, as investors set aside rate worries for now to focus on Apple (AAPL) earnings and the coming monthly jobs report.

The S&P 500 (^GSPC) rose roughly 0.5%, while the Dow Jones Industrial Average (^DJI) gained 0.5%. The tech-heavy Nasdaq Composite (^IXIC) led the gains, up 0.9%.

Stocks are recovering from Wednesday’s volatile session dominated by the wait for the Federal Reserve’s policy decision. Chair Jerome Powell played down the likelihood of an interest-rate hike, bringing relief to investors worried that recent signs of “sticky” inflation might prompt that move.

As Powell again stressed the Fed is still depending on data to shape its thinking, the April jobs report due Friday is in full focus. Wall Street is watching for any signs of cracks in the strong labor market story, a key factor for policymakers.

Meanwhile, the OECD credited US outperformance as the reason the global economy is growing faster than expected, providing another reason for optimism.

Top of mind in earnings are Apple’s quarterly results, expected after the market close Thursday. Wall Street is bracing for a decline in revenue and a potentially hefty pullback in iPhone sales in China. But there could be some potential bright spots for the “Magnificent Seven” megacap in its results.

Live8 updates

Thu, May 2, 2024 at 6:45 PM GMT+2

Trending tickers Thursday

Carvana (CVNA)

Carvana stock occupied the No. 1 spot on Yahoo Finance’s trending tickers list Thursday. Shares of the used car platform rose 34% after posting record quarterly results.

The stock has been volatile over the last year, with short squeezes along the way. Short interest on the stock hovers just above 28% of the float.

“There is definitely a short squeeze going on in CVNA but it is the long buyers driving the stock price up with short covering greasing the skids for an easier ride up,” said Ihor Dusaniwsky, president of S3 Partners.

Qualcomm (QCOM)

Qualcomm stock rose roughly 10% Thursday after the semiconductor company beat quarterly results expectations and issued an upbeat sales outlook.

Shares are up roughly 28% year to date.

Peloton (PTON)

Peloton shares fell 12% after the connected fitness equipment maker announced CEO Barry McCarthy would step down and the company’s global workforce would be cut about 15%, impacting about 400 workers.

The maker of stationary fitness bikes also announced quarterly results, which missed on earnings estimates.
Thu, May 2, 2024 at 6:17 PM GMT+2

Homebuyers turn to ARMs as rates hover above 7% for third straight week

Homebuyers are turning to adjustable rate mortgages in order to strike a deal.

Yahoo Finance’s Gabriela Cruz-Martinez reports:

The rate on the 30-year fixed mortgage increased to 7.22% from 7.17% the week prior, according to Freddie Mac. Rates have risen more than half a percent since the first week of the year and have hovered above 7% for three straight weeks.

It remains unclear when borrowing costs might start to ease, given the Federal Reserve’s decision this week to hold benchmark rates steady and keep them higher for longer. Though the Fed doesn’t directly impact mortgage rates, market reactions do.

Priced-squeezed homebuyers are doing anything they can to combat soaring borrowing costs, and that means adjustable-rate mortgages, or ARMs, are again gaining popularity.

The share of ARMs made up nearly 8% of total applications for the week ending April 26, the Mortgage Bankers Association (MBA) weekly survey found — the highest share seen this year.

The uptick in ARMs came even as overall applications for mortgages weakened last week after the average rate for the popular 30-year fixed home loan reached its highest level since November 2023.

Read more here.
Thu, May 2, 2024 at 5:25 PM GMT+2

Tech stocks rise, semiconductors lead gains

Semiconductor stocks were among the biggest gainers with the tech sector on Thursday. The Information Technology Sector Select ETF (XLK) rose more than 1% during trading.

Nvidia (NVDA) rose more than 2% while Qualcomm (QCOM) increased more than 10% following the semiconductor company’s better-than-expected revenue forecast. Chipmaker equipment maker ASML (ASML) rose more than 2%.
Thu, May 2, 2024 at 4:34 PM GMT+2

Bitcoin rebounds to $59,000 following record ETFs outflow

Bitcoin (BTC-USD) rose more than 3% Thursday to hover above $59,000 following a record daily outflow from spot bitcoin exchange traded funds (ETFs).

The cryptocurrency sank to below $57,000 on Wednesday as investors retrieved a net $564 million from spot bitcoin ETFs, according to Bloomberg data.

The cryptocurrency has been on a recent downtrend, falling for three consecutive days prior to Thursday’s rebound.
Thu, May 2, 2024 at 4:07 PM GMT+2

Carvana soars 34% on surprise profit

Carvana (CRVN) shares soared 34% on Thursday after the online car platform posted a surprise profit for its latest quarter.

The company reported quarterly adjusted earnings of $0.23 versus expectations for a loss of $0.80. Revenue came in at $3.06 billion, above the Wall Street estimates for $2.76 billion.

The company also posted a record for gross profit per unit (“GPU”) of $6,432, or $2,129 higher than last year.

Shares were hovering near $120 each in early trading Thursday. The stock is up roughly 143% year to date.
Thu, May 2, 2024 at 3:38 PM GMT+2

Stocks rise after Fed holds rates steady, Apple earnings on deck

Stocks rose on Thursday morning after a volatile trading session on Wednesday following the Federal Reserve’s policy decision.

The S&P 500 (^GSPC) rose roughly 0.6% at the open. The Dow Jones Industrial Average (^DJI) gained 0.5%. The tech-heavy Nasdaq Composite (^IXIC) led the gains, up 0.8%.

On Wednesday the Federal Reserve held rates unchanged. The fear of a possible rate increase instead of cuts had creeped into the markets recently. Investors were reassured by Fed Chair Jerome Powell’s commentary that the central bank was unlikely to hike rates.

On the earnings front, Apple (AAPL) is set to report this afternoon. Shares of the iPhone maker opened roughly 1.5% higher on Thursday.
Thu, May 2, 2024 at 11:51 AM GMT+2

Bring your macro notes to Apple’s earnings call tonight

Most investors are bracing for a soft quarter from Apple (AAPL) this afternoon.

To that end, shares are down 12% year to date versus a 5% gain for the S&P 500.

Lots of focus on how economic challenges in the US and China are impacting mighty Apple. If these challenges prove more of an issue to sales, investors could refrain from getting too ecstatic on the inevitable AI talk on the earnings call.

Helpful point from JPMorgan analyst Samik Chatterjee:

“The sentiment [on Apple] has improved despite tough datapoints as the focus has shifted to owning the potential AI upgrade cycle; however, the upcoming earnings print will still matter for investors in offering insights into the magnitude of the cyclical challenges on account of pressured consumer spending as well as the headwinds in relation to market share moderation in China.”
Thu, May 2, 2024 at 11:45 AM GMT+2

The pushback on rate hikes from the Fed

The Street is singing in unison this morning on a growing narrative in markets: The Fed may actually hike rates this year to finally bring inflation down to its 2% goal.

That song is that pigs have a better chance of flying than the Fed whipping out a rate increase.

Good point on all of this from Mike O’Rourke at JonesTrading this morning after Wednesday’s Fed decision:

“Fear hype that chairman Powell would put rate hikes back on the table was ludicrous. If there was ever a straw man catalyst for a rally, this was it. The speculation was as inane as the belief at the start of the year that the FOMC would cut interest rates six times this year. There was nothing in the data or the Fed commentary supporting such easing speculation, but somehow it became the consensus view and was actually priced into markets. Chairman Powell has been adamantly clear on repeated occasions that if inflation is resilient, the FOMC will hold rates steady for as long as necessary to rein in inflation. Beyond risking overtightening as some decelerating economic data emerges, there is also an election in six months. Most obviously, this is a man who took the Fed’s balance sheet from $4 trillion four years ago to $9 trillion, then today said he is tapering normalization at $7.4 trillion. Chairman Powell is only hawkish when he has no other choice, and currently inflation is keeping him in check. Raising interest rates aggressively a year late does not make one tough on inflation.”