The 2026 FIFA World Cup, set to kick off in a couple of weeks, will determine which of the planet's 200-plus national men's teams get to call themselves the world's greatest for the next four years.

But this isn't Sports Illustrated. The reason you're reading about the World Cup at Kiplinger is that the tournament could have a financial impact on numerous publicly traded companies.

Big sports is big business, and there's no bigger sports spectacle than the World Cup; not the Super Bowl; not even the Olympics.

This year's edition is expected to top the rest, in part because the 2026 FIFA World Cup has been significantly expanded, from 32 teams previously to 48.

The tournament, which will be held across 16 host cities in the U.S., Canada and Mexico, will play out across more than five weeks — from the June 11 opener between South Africa and our southern neighbor's "El Tri" in Mexico City to the July 19 final at New Jersey's MetLife Stadium (temporarily renamed New York/New Jersey Stadium to comply with FIFA regulations).

The World Economic Forum estimates that the tournament and its wild 104 matches "could create more than $40 billion in global GDP."

Today, we'll talk about Wall Street's views on the stocks that could enjoy some of that World Cup windfall.

Will the World Cup runneth over … into these companies' bottom lines?

We'll be clear: The World Cup generally isn't expected to make or break the financial fortunes of companies worth tens or even hundreds of billions of dollars. In virtually all cases of the stocks we've looked at, Wall Street views the World Cup as one of several drivers.

Still, a surprise earnings beat here or a whiff there can make a material difference, which is why many equity researchers have spent the past few months weighing in on how the soccer tournament could influence a variety of publicly traded companies.

Let's examine some of the companies they've been talking about.

Coca-Cola and Visa

The most obvious connection between companies and sporting events is corporate sponsorship. In the case of the World Cup, companies working with FIFA will enjoy a variety of marketing rights, including brand exposure in stadiums, digital platforms and publications, fan experiences, hospitality opportunities and more.

The spotlight will shine brightest on FIFA Partners*, which represent the top tier of association with FIFA. Coca-Cola (KO) and Visa (V) are the two most prominent U.S. names, and they're joined by Aramco, Lenovo, Adidas, Qatar Airways, ADI Predictstreet and Hyundai/Kia.

In February, Morgan Stanley Research looked at the most important points that Coca-Cola's then-CEO-elect, Henrique Braun, and Chief Financial Officer John Murphy made during an appearance at the Consumer Analyst Group of New York (CAGNY).

"Braun cited upcoming FIFA World Cup activations [in other words, campaigns] as an example of a consumer-centric focus, with activations in (New York) focused around new experiences, recruitment and European influence, vs. activations in Houston focused on Latin American influence, and tailored tie-ins, packaging and marketing by city," a team of Morgan Stanley analysts wrote.

They view Coca-Cola as "a strong long-term compounder with sustained higher organic sales growth than peers," but didn't explicitly cite World Cup optimism in their Overweight call (equivalent to Buy) on the Dow Jones stock. But BNP Paribas (Outperform, equivalent to Buy) did in May, saying that the company's upcoming World Cup activations should support its momentum in both the carbonated soft drink and sports drink categories.

Morgan Stanley also wrote in late April that "increased FIFA World Cup-related client enthusiasm for travel and marketing services" was one of several reasons Visa management raised its full-year 2026 outlook.

That said, "operating expense guidance was also raised to low-double digit to low teens, largely reflecting increased FIFA-linked marketing services spend." Morgan Stanley Research also has an Overweight rating on the blue chip stock, believing the durability of the payment-card provider's network is "underappreciated."

Nike and Adidas

No one should be surprised that Nike (NKE) and German rival Adidas (ADDYY) are in the spotlight, given that together, they account for a vast majority of the global soccer market.

Back in March, Bernstein Research said it believed Nike and Adidas could each see a 3% to 4% bump in global sales, with the World Cup driving demand for jerseys, shoes and other gear. The firm has Outperform ratings on both consumer discretionary stocks.

However, Bernstein cut its price target on NKE (to $80 from $85 previously) in early April following a merely modest top- and bottom-line beat in its fiscal third-quarter earnings report. Later in the month, it lowered its price target on Adidas to $132.50 from $137.91.

Still, "with both stocks down YTD and sentiment washed out, a strong World Cup showing and a boost in sales and brand heat could also drive investor interest and re-rating over the next few months," Bernstein said.

BNP Paribas researchers (Underperform, equivalent of Sell) threw some cold water on the World Cup's effect on NKE, saying that the estimated revenue benefit from the event would be "small and one-time in nature."

Stifel analysts (Hold) see World Cup sell-in adding 2 percentage points of lift to Nike's fiscal fourth-quarter revenues.

DraftKings

Wall Street is much more emphatic about the potential for a World Cup boost for online sportsbook DraftKings (DKNG).

"We think the World Cup (spread between Q2/Q3) could be a roughly $1 billion of handle opportunity for DKNG, which would be bigger than the Super Bowl," say Truist analysts Barry Jonas and Patrick Keough, who rate the stock at Buy.

DraftKings' management is excited about the potential opportunity from its app's Spanish-language functionality, which rolled out late last year. Morgan Stanley (Overweight) adds that the World Cup could help "[drive] incremental wagers during a low period over the next few months."

Both firms also nod to the potential for DraftKings' prediction market offerings, also launched in late 2025 to take on the likes of Kalshi and Polymarket.

Wingstop

BNP Paribas (Outperform) and Stifel (Buy) also like what a month-plus of international soccer could do for chicken slinger Wingstop (WING).

The former lays out a difficult environment for the restaurant stock, including financial pressure on its core consumers, poor weather to start the year and higher gas prices. But "looking ahead, easier comparisons and catalysts like the World Cup could help support improving demand as the year progresses."

Stifel calls the World Cup "a potential demand driver this summer," but arguably a more interesting and significant driver is the company's march toward the "10-minute unlock."

In 2025, Wingstop began to roll out a system designed to dramatically accelerate its speed of service (SoS) from 20 minutes to 10. While the initiative has taken longer than expected, the company is making progress, Stifel says; for instance, 46% of the system is consistently hitting a 10-minute SoS on Friday and Saturday nights (up from 30% in the prior quarter).

"We believe the brand is currently transitioning from a niche, sports-centric fan favorite into a cultural mainstay," Stifel's analysts write. "The cornerstone of that evolution is the 10-minute service time unlock, which would expand Wingstop's relevance across a broader range of dining occasions."

* This is the top tier of association with FIFA. It shouldn't be confused with FIFA World Cup Sponsors, which include Anheuser-Busch, Bank of America, Frito-Lay, Hisense, McDonald's, Mengniu Dairy, Unilever (Dove) and Verizon. I couldn't tell you which are merely FIFA World Cup Sponsors, and which belong to FIFA World Cup Sponsor Plus.

And I beg you not to mistake FIFA Partners and FIFA World Cup Sponsors for Tournament Supporters, which include Airbnb, Diageo, DoorDash, Globant, The Home Depot, Marriott Bonvoy, Rock-It Cargo and Marriott Bonvoy.

But it should be easy to discern the FIFA Partners, FIFA World Cup Sponsors and Tournament Supporters from the FIFA Women's Football Partners, FIFA Women's World Cup Sponsors, FIFAe Finals Presenting Partners, FIFAe Finals Tournament Sponsors and FIFAe Finals Regional Tournament Supporters. Maybe. Truth be told, I don't know. They could be the same exact companies.

And no, I'm not kidding. It really is that stratified.

Related content

• Buying World Cup Tickets? Beware of These Scams
• How 2026's Surge in First-Time Bettors and New IRS Rules Are Shifting World Cup Odds
• Where to Stay Comfortably for the World Cup in New Jersey

The Federal Reserve Bank of Kansas City's annual Economic Policy Symposium bills itself as a "venue for international central bankers, Federal Reserve officials, other policymakers and academics to discuss issues of mutual concern."

But normies really just care about what Federal Reserve Chair Jerome Powell had to say in his speech Friday morning.

After all, when the Fed chief speaks, markets listen. And that's especially true at this particularly delicate time for both the economy and the independence of the Federal Reserve.

Powell walked a fine line when he delivered what will likely be his final keynote address at Jackson Hole.

The Fed's dual mandate of maximum employment and stable prices is increasingly challenged by a softening labor market and above-target inflation.

In terms of these goals, Powell said in his Jackson Hole speech, that "the labor market remains near maximum employment, and inflation, though still somewhat elevated, has come down a great deal from its post-pandemic highs."

However, Powell added that "the balance of risks appears to be shifting," and this "may warrant" the Fed adjusting its policy stance.

With Powell & Co. increasingly under pressure from the White House to lower interest rates, the Fed chair added that Federal Open Market Committee (FOMC) members will make policy decisions "based solely on their assessment of the data and its implications for the economic outlook and the balance of risks" and "will never deviate from that approach."

Should the Fed cut rates?

In an argument for lower rates, it's true that gross domestic product (GDP) grew at an annual rate of only 1.2% in the first half of the year. Second-half growth is set to come in at a "still-subdued" 1.3%, writes David Payne, staff economist at The Kiplinger Letter, in the Kiplinger GDP Outlook.

A softer labor market also helps make the case for lower rates. The July jobs report featured "stunning revisions that suggest the labor market slowdown has happened earlier than economists expected," Payne notes in the Kiplinger Jobs Outlook.

On the other hand, inflation remains above the Fed's long-term target and tariffs are very much complicating the outlook.

"Inflation has made little progress toward the Fed's 2% target since last year's Jackson Hole conference," writes Lauren Goodwin, economist and chief market strategist at New York Life Investments. "The labor market is better balanced, but increasingly shaped by a mix of cyclical softening, structural trends and policy-driven shocks."

Powell also faces challenges outside the arena of economic data. In addition to the mounting political pressure for the Fed to cut rates, Powell's tenure as chief has even seemingly been put at risk.

More recently, President Donald Trump is threatened to fire Fed Governor Lisa Cook amid allegations over her mortgages.

And inside the Fed, two voting members of the FOMC dissented with the central bank's move to keep rates steady at its July meeting.

Either way, odds are that the central won't stand pat at the next Fed meeting.

Following Powell's Jackson Hold speech on Friday, interest rate traders are now assigning a 91% probability to the FOMC cutting the short-term federal funds rate by a quarter of a percentage point, or 25 basis points, in September.

That's up from 75% one day ago and 58% a month ago, according to CME Group's FedWatch, reflecting changes in the labor market.

What the experts say about Powell's Jackson Hole speech

With the Fed Chair Powell's Jackson Hole speech now in the books, here's some of what economists, strategists and other experts around Wall Street have to say about the results and what they could mean for investors going forward.

"Fed Chair Powell has begun to turn the wheel of the Fed with his speech today, which should benefit consumers and small businesses, along with sectors benefiting from AI, technology, REITs and ttilities. All these sectors benefit from lower financing costs and their dividends will be more attractive with lower bond yields. This is only the beginning of what I hope is a new commitment to several future rate drops." – Ben Fulton, CEO of WEBs Investments

""As expected, Powell's comments remained measured. He acknowledged the difficulty in the Fed's current balancing act and re-re-reiterated their reliance on data-driven decision making. However, he also seemed to conclude that tariffs were more likely to drive a one-time increase in prices, rather than drive a more continuous upward trend in inflation, which would be a change in his stance. He also noted the clear slowdown in the labor market. The implication was that the likelihood of a rate cut in September was even higher than it had been before." – Melissa Brown, Managing Director of Investment Decision Research at SimCorp

"This is just what investors were hoping to hear, given the recent slowdown in the labor market. While there is still one more employment report before the September meeting, it's clear the Fed has enough data under its belt to justify a September cut. The stock market tends to favor lower interest rates and given the likely prospect of a September cut, we expect the market's bullish trend to continue over the short term. We would not be surprised to see a 5-10% correction in the S&P 500 sometime between September and October, in line with historical trends, before rallying to 6,500 through 7,000 by the end of the year." – David Laut, Chief Investment Officer, Abound Financial

""The macro outlook should convince the Fed to cut rates at the September 17th meeting. The hint of upcoming rate cuts will tamp down yields and bolster markets in the near term. But looking out on the horizon, structural shifts in the economy have created uncertainty about the long-run fed funds rate. Suffice it to say, the neutral rate will be higher than during the 2010s." – Jeffrey Roach, Chief Economist for LPL Financial

Related content

• How Big Will the Fed Rate Cut Be This Fall?
• Who Will Replace Jerome Powell as Fed Chair?
• How to Invest for a Fall Interest Rate Cut by the Fed

President Donald Trump's aggressive tariff plans have thrown Wall Street into a tailspin. Both the stock and bond markets have been selling off, and corporations are pulling guidance amid the uncertainty.

"The global economic system under which most countries have operated for the last 80 years is being reset," writes Pierre-Olivier Gourinchas, economic counselor and director of research of the International Monetary Fund (IMF). "Existing rules are challenged, while new ones are yet to emerge."

The effective tariff rate in the U.S. is now at its highest level in roughly a century and is forecast to have a far-reaching impact on the global economy.

The IMF in late April said it expects global economic growth to rise 2.8% this year and next, down from the 3% it forecast in January. This includes tariff announcements made by the U.S. and its trading partners from February 1 to April 4.

For reference, global economic growth rose 3.3% in 2024.

Gourinchas notes that the Trump administration's 90-day pause on most tariffs and "prohibitive" tariffs on Chinese imports "does not materially change" the IMF's outlook.

S&P 500 targets are revised lower amid tariff uncertainty

Meanwhile, several investment firms, such as LPL Financial, have lowered their outlooks for where the S&P 500 is likely to be at year's end.

"With little visibility into where tariff rates shake out and the effects on earnings, it's hard to have much conviction in a year-end S&P 500 target," say Adam Turnquist, chief technical strategist, and Jeffrey Buchbinder, chief equity strategist at LPL Financial.

The strategists' year-end fair value target for the S&P 500 heading into 2025 was 6,275 to 6,375, which they say was "rightly well below consensus … but now is too high, based on the new tariff regime."

They now expect the S&P 500 to end the year around 5,700, which represents an implied upside of roughly 3% to current levels and a decline of 3% from its 2024 close.

With this in mind, we thought it would be helpful for investors to see what some of Wall Street's top CEOs and chief financial officers (CFOs) are saying about the impact of Trump's tariffs, which could affect a company's financials — and its share price — down the road.

3M

Industrial conglomerate 3M (MMM) makes a variety of products for consumers and businesses, from Post-it Notes to stethoscopes to insulation.

The company beat top- and bottom-line expectations for its first quarter and gave two sets of guidance for 2025 — one with a "tariff sensitivity" impact.

In 3M's earnings call, CEO Bill Brown acknowledged that "tariffs are going to be a headwind this year."

He added that "with the significant footprint we have in the U.S. and the flexibility of our global network, we're identifying a number of ideas to adjust product sourcing and logistics flows to mitigate at least a part of the impact, some of which are no-regret moves regardless of where trade policies eventually settle."

As for the impact on 3M's bottom line, CFO Anurag Maheshwari said that the company imports $1.6 billion into the U.S. and exports $4.1 billion from the U.S., adding that trade flow with China is roughly $600 million.

Based on tariff rates as of April 22 (125% on U.S. exports to China, 145% on Chinese exports to the U.S.), 3M will realize an "approximately $675 million of potential annualized tariff impact after anticipated exemptions," Maheshwari noted.

Add in tariffs on products not included under the United States-Mexico-Canada Agreement (USMCA), the total impact could reach $850 million before any mitigation actions," he said.

Maheshwari said 3M will attempt to offset these headwinds through "cost and productivity initiatives [and] optimizing production and logistics."

JPMorgan Chase

JPMorgan Chase's (JPM) first-quarter results came in higher than Wall Street expected.

In the company's earnings release, CEO Jamie Dimon wrote that the "economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and 'trade wars,' ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility."

As a result, Dimon noted in the earnings call, people and companies "are not going to be doing things" because of the impact of tariffs. Instead, they're going to "wait and see."

This includes actions such as mergers and acquisitions (M&A) and hiring, he said.

Dimon added that if a recession were to hit — JPMorgan gives it a 50-50 chance — the bank, which is the biggest in the U.S. by assets under management, can handle it.

"Earnings won't be great, and the stocks will go down," he said, but noted that he would view this as "an opportunity to buy back more stock."

Chipotle Mexican Grill

Bad weather and slowing consumer spending caused Chipotle Mexican Grill (CMG) to report a top-line miss and the first same-store sales contraction since 2020 in Q1.

Chipotle CEO Scott Boatwright noted in the company's earnings call that signs consumers were worried about the economy began to emerge as early as February, with a visitation study highlighting this as a main reason customers were cutting back on restaurant visits.

"This trend has continued into April," Boatwright added.

Meanwhile, Chipotle CFO Adam Rymer said the company expects cost of sales to remain in the high 29% range due, in part, to "higher inflation across several items" and "the impact of the newly enacted tariffs [that] included aluminum and the broad-based 10% tariff."

The company's Q2 guidance includes the expected impact of these tariffs, but not any that were postponed or those put in place against Mexico and Canada, since Chipotle's "imports fall under the USMCA exemption," Rymer said.

The CFO added that the company anticipates a "full offset by the back half of the year through several in-restaurant initiatives, including the produce slices."

PepsiCo

PepsiCo (PEP) reported a rare earnings miss in its first quarter and lowered its full-year EPS guidance, citing concern about tariffs, the economy and consumer spending.

"As we look ahead, we expect more volatility and uncertainty, particularly related to global trade developments, which we expect will increase our supply chain costs," said CEO Ramon Laguarta in the earnings release.

"At the same time, consumer conditions in many markets remain subdued and similarly have an uncertain outlook," Laguarta added.

He noted that the soft drink and snack maker is "actively planning mitigation actions" where possible to address higher supply-chain costs.

"Some of those we'll be able to execute more quickly. Some of those will take more time to execute," said James Caulfield, PepsiCo's chief financial officer, in the company's earnings call.

Verizon Communications

Verizon Communications (VZ) reported higher-than-expected first-quarter results and said it's on track to meet its full-year guidance, even as Q1 postpaid phone losses totaled 289,000 — more than the 114,000 seen in the year-ago period.

When asked about tariffs in the telecommunication giant's earnings call, CEO Hans Vestberg said that Verizon will not foot the bill on "any enormous increase on tariffs in handsets. That's ultimately going to hit the consumer in the market."

In other words, more price increases on phones could be coming.

Procter & Gamble

Procter & Gamble (PG) also talked about price increases following its fiscal third-quarter revenue miss. The company also lowered its full-year outlook.

"We continue to expect the environment around us to remain volatile and challenging, from input costs, to currencies, to consumer, competitor, retailer and geopolitical dynamics, and now, tariff impacts," said Procter & Gamble CFO Andre Schulten during his company's earnings call.

Schulten added that the volatility is impacting consumer behavior, as well, with lots of people choosing to pause spending, which is "reflected in retail traffic being down," and that's weighing on P&G's top line. Overall, P&G anticipates a $1 billion to $1.5 billion impact.

The CFO noted that "it's clear that productivity, innovation and pricing are probably the short-term levers" that the company will employ to mitigate the impact of tariffs, while "other levers" include formulation and sourcing changes.

What does this mean for investors?

During periods of market instability, market participants must remember that investing is a marathon and not a sprint — and that the long-term trend is up and to the right.

As unsettling as volatility can be, it creates opportunity for investors, writes a team of experts from BlackRock in their second-quarter equity market outlook.

"We believe some of the corrections may be overdone, causing dislocations between fundamentals and current pricing — and opening some interesting entry points and attractive prospects," BlackRock writes, adding that "caution and selectivity are key."

Remember, one of the main goals for investors is to buy low, so any pullbacks in share price create an ideal time to dollar-cost average into high-quality assets.

Related content

• Stocks to Buy for a Trump Presidency
• How to Hedge Against Trump's Tariffs
• How Do Tariffs Impact the Stock Market?

To help you understand what is going on in politics and the economy, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

Prepare for slower growth and higher inflation as the president seeks to revise the global trade system through sweeping tariffs on virtually all U.S. imports. He is promising short-term pain for long-term gain. We agree on the short term. The long term is murkier. Given the highest U.S. tariffs in a century:

Prices of many goods will turn higher. Sellers of imported goods will absorb some of the new duties and pass along the rest to their overseas suppliers and to U.S. consumers. The exact breakdown will vary by product and industry, but the trend is inflationary.

Overall inflation could hit 5% by year-end, up from 2.8% in February, but not as bad as the 9% peak that the economy endured in 2022. Still, for businesses and consumers alike, steeper price hikes will hurt.

Spending will suffer, at the retail level because shoppers’ dollars won’t stretch as far now, and among businesses because of the uncertainty about how long the tariffs will last. The White House wants companies to invest in new manufacturing here. Some will — indeed, some already are — but other firms are likely to hold off. Building new factories is costly and can take years, a major risk if tariffs then get reversed by Trump or his successor.

Recession doesn’t appear imminent. But there is a real threat of stagflation — the dreaded combo of slow growth and stubbornly high inflation, last seen in the 70s. Of course, the exact impact of the new tariffs depends on reactions to them.

Trade partners must decide whether to negotiate, stand pat or push back. We expect a mix of reactions there.

• China will almost certainly retaliate. It faces the highest combined duties, well over 50%. And while the U.S. is a key market that China can ill afford to lose, Beijing also can’t afford to appear cowed by Trump. Look for it to respond by targeting sensitive U.S. products, especially foodstuffs.
• The European Union may well also push back as it faces 20% U.S. duties.
• For now, Australia, India and possibly the U.K. appear unlikely to retaliate.
• Smaller countries facing steep tariffs may have no choice but to negotiate by dropping their own duties on U.S. goods. Vietnam, for instance, depends heavily on exports to the U.S., and now faces a punishing 46% rate. That may be unbearable.
• Mexico and Canada, spared new duties, may also look to make deals. USMCA, the free-trade pact Trump made with them in his first term, is up for renewal in 2026. He appears open to extending it if he gets concessions on migration and other issues.

The big question: Will Trump succeed and bring back U.S. manufacturing?
He is determined to try. But there are limits to what any president can do. Consumers are also voters, and even voters who support him may blanch at the cost tariffs will add to what they buy. Some foreign leaders will bet we can’t take the pain.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

Related content

• What’s Happening With Trump Tariffs? Full Updates and Analysis
• How Tariffs Could Impact Affluent Retirees
• Trump's Tariffs on Canada and Mexico to Spike Food, Gas Prices

Apple (AAPL) fell more than 9% on Thursday, April 2, after President Donald Trump unveiled sweeping reciprocal tariffs after Wednesday's close. Shares dropped another 7% on Friday as the sell-off continued to a second day.

This is the latest bout of technical troubles the once-high-flier has faced recently, with shares of AAPL down nearly 25% for the year to date.

Why is Wall Street so worried about Apple stock – and should you be too?

Trump tariffs create a major headwind for Apple stock

Apple's price struggles this year have come amid broader risk-off sentiment from investors. Concerns about slowing iPhone sales and consumer demand didn't help matters.

These worries are being compounded following the latest Trump tariff news.

"Both the magnitude of 'reciprocal' tariffs imposed per country and the set of countries they were imposed on were larger than many had reasonably anticipated," notes UBS Global Research strategist Bhanu Baweja.

The 10% universal tariffs "is an added shock," Baweja says. This, he believes, has the potential to "considerably worsen" both domestic and global economic growth in the year ahead.

Additionally, Apple relies "on extensive international manufacturing, with the large majority of finished goods sold into the U.S. assembled in (Southeast) Asian nations," which leaves it one of the worst-positioned to absorb the tariffs, notes Morgan Stanley analyst Erik Woodring.

Woodring believes that Apple could incur an added tariff cost of more than $38 billion annualized, which works out to roughly 26% of EBIT (earnings before interest and taxes) for fiscal 2026.

He adds that the "heightened uncertainty" will also likely elongate sales cycles.

CFRA Research analyst Angelo Zino says he is waiting for more clarity from both Apple's management and the Trump administration on potential next steps.

Still, Zino lowered his price target on AAPL stock to $235 from $270, explaining that he sees "downside to both margins and earnings if the reciprocal tariffs hold. We also see risk that China and others could retaliate, targeting technology companies like AAPL."

Despite Wall Street's worries, most analysts remain in Apple's corner. Of the 45 analysts who cover AAPL stock tracked by S&P Global Market Intelligence, 21 say it's a Strong Buy, seven call it a Buy, 13 have it at Hold, and four say it's a Sell or Strong Sell.

This works out to a consensus Buy recommendation, though with slightly less conviction than at the start of the year.

What should investors do about Apple stock?

Ups and downs are part of being invested in the stock market, and investors who have held on to their Apple shares over the long term have come out on top.

Even though Apple is one of the worst Dow Jones stocks so far this year, shares have averaged an annual total return (price change plus dividends) of 28.2% in the past five years. The S&P 500, meanwhile, has generated an average annual total return of 19.4% in that same time frame.

Remember that the idea is to buy low. Stocks are cheaper today than they were yesterday. They might get cheaper tomorrow, but the long-term trend has always been up and to the right. That's why dollar-cost averaging works for investors.

As CFRA's Zino reminds us, Apple is better positioned than most hardware vendors in terms of free cash flow and balance sheet strength, and its growing Services business should help buffer downside for now.

In Apple's most recently reported quarter, its Services division accounted for 21% of total revenue.

Related content

• How to Hedge Against Trump's Tariffs
• The Stock Market Is Selling Off. Here's What Investors Should Do
• Apple's 100,000% Return Is a Result of Innovation, Brand Loyalty and Buybacks

Wells Fargo (WFC) is one of the best S&P 500 stocks Wednesday after the financial services company beat profit expectations for its fourth quarter and issued a strong outlook for fiscal 2025.

In the quarter ending December 31, Well Fargo said its revenue slipped 0.5% year over year to $20.4 billion. Its earnings per share (EPS) increased 66.3% from the year-ago period to $1.43.

"Our solid performance this quarter caps a year of significant progress for Wells Fargo," said CEO Charlie Scharf in a statement. "Our earnings profile continues to improve, we are seeing the benefit from investments we are making to increase our growth and improve how we serve our customers and communities, we maintained a strong balance sheet, we returned approximately $25 billion of capital to shareholders, and we made significant progress on our risk and control work."

The results were mixed compared with analysts' expectations. While Wells Fargo fell short of the $20.6 billion in revenue Wall Street anticipated, its earnings per share came in above the $1.35 per share analysts guided for, according to CNBC.

Included in the shareholder-friendly initiatives Wells Fargo undertook during the fourth quarter was the repurchase of roughly 57.8 million shares for approximately $4 billion, bringing its total repurchases in 2024 to approximately $20 billion. Stock buybacks are another way for corporations to boost value for shareholders.

For the full fiscal year, Wells Fargo said it expects to achieve net interest income growth of 1% to 3% over 2024's figure of $47.7 billion.

Wells Fargo's impressive EPS beat "along with a strong statement about continued growth and productivity gains lifted guidance more than expected," says Brian Mulberry, client portfolio manager at Zacks Investment Management. "This is evidence that the expense management project continues to pay dividends on the balance sheet, combined with better net interest income results boosting revenues by as much as 3% demonstrates that WFC is in a strong balance sheet position."

Is Wells Fargo stock a buy, sell or hold?

Wells Fargo has outperformed the broader market over the past 12 months, up 60% on a total return basis (price change plus dividends) vs the S&P 500's 24% gain. Unsurprisingly, Wall Street remains bullish on the financial stock.

According to S&P Global Market Intelligence, the average analyst target price for WFC stock is $77.30, representing implied upside of nearly 3% to current levels. Additionally, the consensus recommendation is a Buy.

Financial services firm BofA Securities is one of the more bullish outfits on the large-cap stock, calling it a "top pick" in the banking industry, along with a Buy rating and $84 price target.

"We remain bullish on bank stocks and expect the group to build on 2024 gains and outperform the S&P," wrote BofA Securities analyst Ebrahim Poonawala in a January 7 note, adding that the outperformance would be driven by several factors, including solid earnings-per-share growth, discounted valuation and increased ownership.

Related Content

• Earnings Season: Live Updates and Commentary
• Is JPMorgan Chase Stock a Buy, Hold or Sell After Earnings?
• Citigroup Stock Jumps on Earnings, $20 Billion Stock Buyback News

Constellation Energy (CEG) is one of the best S&P 500 stocks Friday, up more than 22% at last check, after the utility company said it will acquire independent power producer Calpine for a net purchase price of $26.6 billion. The merger of the two firms will create the nation's largest clean energy provider.

Constellation said it will use 50 million CEG shares priced at the 20-day volume-weighted average price (VWAP) of approximately $237.98 apiece and $4.5 billion in cash to fund the purchase. It will also assume roughly $12.7 billion of Calpine's net debt.

"This acquisition will help us better serve our customers across America, from families to businesses and utilities," said Constellation CEO Joe Dominguez in a statement. "By combining Constellation's unmatched expertise in zero-emission nuclear energy with Calpine's industry-leading, best-in-class, low-carbon natural gas and geothermal generation fleets, we will be able to offer the broadest array of energy products and services available in the industry."

The transaction is expected to immediately begin boosting Constellation's earnings, with the company projecting an increase of more than 20% to EPS in 2026 and adding at least $2 per share to earnings in future years. It's also expected to add more than $2 billion of free cash flow annually.

The transaction is subject to the customary closing conditions, including regulatory approvals from numerous agencies, Constellation said. If all goes as planned, the transaction is expected to close within 12 months.

Is Constellation Energy stock a buy, sell or hold?

The utility stock was one of the top performers of 2024, ending the year up nearly 93% on a total return basis (price change plus dividends) and it remains a top stock pick this year too. Indeed, Wall Street is overwhelmingly bullish on the large-cap stock.

According to S&P Global Market Intelligence, the consensus recommendation among the 18 covering analysts that it tracks is Buy.

However, analysts' price targets may need to be adjusted following the news of the acquisition. At last check, the average analyst price target of $279 represents a discount of more than 7% to current levels.

Financial services firm UBS Global Research is one of those with a Buy rating on CEG stock, along with a $289 price target.

After rumors of the deal surfaced earlier this week, UBS Global Research analyst William Appicelli said the deal would position Constellation "for a variety of market conditions and have more volumetric upside as power demand grows, as most expect it will in a meaningful manner."

He added that "the addition of a large gas portfolio opens the door for CEG to be more flexible in meeting future large load demand."

Related Content

• Why Walgreens Is the Best S&P 500 Stock After Earnings
• Analysts' Top S&P 500 Stocks to Buy Now
• Stock Picks That Billionaires Love

The stock market is comfortably higher to start the short trading week after President-elect Donald Trump late Friday nominated Scott Bessent to serve as the 79th Treasury secretary of the United States.

In a post on Truth Social, President-elect Trump said Bessent is "one of the world's foremost international investors and geopolitical and economic strategists. Scott's story is that of the American Dream." 

He went on to say that Bessent will help "usher in a new Golden Age for the United States" and help the incoming administration "ensure that no Americans are left behind in the next and greatest economic boom."

"Scott will support policies that drive U.S. competitiveness, stop unfair trade imbalances, and build an economy centered on growth, especially through our coming world energy dominance," Trump added.

Who is Scott Bessent?

Scott Bessent is an investor and hedge fund manager. He served as chief investment officer at Soros Fund Management before founding Key Square Group, an investment firm that focuses on macroeconomic strategies, including analyzing economic, political, and market conditions to place trades on currencies, interest rates, commodities and equities.

"Bessent has been involved in some of the largest and most profitable trades in Hedge Fund History, including shorting the British pound and the Japanese yen, the Argentine debt reorganization and MF Global Italian bonds liquidation," Trump said.

What does Wall Street think of Trump's selection?

"The selection of Scott Bessent as Treasury secretary is extremely positive for markets," says Jay Hatfield, CEO of Infrastructure Capital Advisors. "Bessent has a deep understanding of markets and economics, and, importantly, understands the long-term benefits of taxing consumption through tariffs with proceeds from the tariffs used to fund cuts in taxes on investment. He is also a fiscal hawk who is likely to support spending restraint, which increases national savings and investment."

Hatfield added that federal fiscal irresponsibility reduces U.S. gross domestic product (GDP) growth by 0.75% per year.

"The early word on the street is that, while Bessent has pledged to uphold Trump's promises for tariffs and tax cuts, he is seen as a thoughtful moderate," said Mark Malek, chief investment officer of Siebert, in emailed commentary. "This suggests we might expect a more measured approach to policy deployment."

Sal Guatieri, senior economist at BMO Capital Markets, shares a similar outlook. "Though a proponent of tariffs, he leans more toward targeted measures," Guatieri said. "He favors tax cuts but also supports cutting government spending to control the budget deficit. He could be a steady hand in the administration."

Related Content

• Trump Picks Dr. Oz as Head of Medicare and Medicaid
• Six Ways Trump Could Change Your Retirement
• Stocks to Buy for a Trump Presidency

TJX Companies (TJX) stock is lower Wednesday even after the off-price retailer and TJ Maxx parent beat top- and bottom-line expectations for its fiscal 2025 third quarter and raised its full-year outlook.

In the 13 weeks ended November 2, TJX's revenue increased 6% year over year to $14.1 billion, driven by comparable-store sales growth across all its brands and geographies, including 2% combined growth at TJ Maxx, Marshalls and Sierra and 3% collective growth at HomeGoods and HomeSense stores across its U.S. stores.

The retailer also said its earnings per share (EPS) rose 10.7% from the year-ago period to $1.14.

"Our comparable-store sales increase of 3% was at the high-end of our plan, and both pretax profit margin and earnings per share came in well above our expectations," said TJX CEO Ernie Herrman in a statement. "Across the Company, customer transactions drove our comparable-store sales increases, which tells us that our values and treasure hunt shopping experience are appealing to a wide range of customers."

The results beat analysts' expectations. Wall Street was anticipating revenue of $13.95 billion and earnings of $1.10 per share, according to Yahoo Finance.

As a result of its "above-plan profitability results in the third quarter," TJX raised its full-year profit forecast. It now expects to achieve EPS in the range of $4.15 to $4.17, up from its previous forecast of $4.09 to $4.13. Management added that it continues to anticipate consolidated comparable-store sales to rise 3%.

For the fourth quarter, TJX said it expects to achieve comparable-store sales growth in the range of 2% to 3% and earnings per share between $1.12 to $1.14. However, the midpoint of this range, $1.13 per share, came up short of the average analyst estimate of approximately $1.18 per share.

"The fourth quarter is off to a strong start, and we are excited about our opportunities for the holiday selling season," Herrman said.

Is TJX stock a buy, sell or hold?

TJX has slightly outperformed the broader market in 2024, up 29% for the year to date on a total return basis (price change plus dividends) vs the S&P 500's 26% gain. And Wall Street is bullish on the consumer discretionary stock.

According to S&P Global Market Intelligence, the average analyst target price for TJX stock is $126.55, representing implied upside of roughly 7% to current levels. Meanwhile, the consensus recommendation is a Buy. 

Financial services firm UBS Global Research is one of the more bullish outfits on TJX stock with a Buy rating and $148 price target.

"We think TJX's sales and EPS outlooks justify a premium valuation," said UBS analyst Jay Sole in a November 11 note. "We see TJX as a defensive stock well-positioned to continue to take market share from weaker channels, such as department stores. This should allow the company to deliver solid comparable-store sales growth and fixed cost leverage."

Related Content

• Kiplinger's Earnings Calendar for This Week
• Target Is the Worst S&P 500 Stock After Earnings. Here's Why
• Why Walmart Stock's a Buy After Its Beat-And-Raise Quarter

Cisco Systems (CSCO) stock is trading lower Thursday even after the networking equipment specialist beat top- and bottom-line expectations for its fiscal 2025 first quarter and raised its full-year outlook.

In the three months ended October 26, Cisco's revenue decreased 5.6% year over year to $13.8 billion, pressured by a 28% decline in its Networking segment to $6.8 billion. Its earnings per share (EPS) were down 18% from the year-ago period to 91 cents.

"Cisco is off to a strong start to fiscal 2025," said CEO Chuck Robbins in a statement. "Our customers are investing in critical infrastructure to prepare for artificial intelligence (AI), and with the breadth of our portfolio, we are uniquely positioned to capitalize on this opportunity."

The results beat analysts' expectations. Wall Street was anticipating revenue of $13.77 billion and earnings of 87 cents per share, according to CNBC.

Since its Q1 results came in at the high end or above its guidance range, Cisco raised its outlook for the full fiscal year. The company now expects to achieve revenue in the range of $55.3 billion to $56.3 billion and earnings per share between $3.60 to $3.66. This compares to its previous forecast for revenue in the range of $55 billion to $56.2 billion and EPS of $3.52 to $3.58.

"We are focused on solid execution and operating discipline while making strategic investments to drive innovation and growth," said Cisco Chief Financial Officer Scott Herren.

Is Cisco stock a buy, sell or hold?

Cisco Systems is up 17% for the year to date on a total return basis (price change plus dividends) and Wall Street is moderately bullish on the blue chip stock. 

According to S&P Global Market Intelligence, the average analyst target price for CSCO is $60.37, representing implied upside of roughly 5% to current levels. Meanwhile, the consensus recommendation is Buy. 

Financial services firm Jefferies is one of those with a Buy rating on the Dow Jones stock. It also raised its price target on Cisco to $66 from $53 after earnings.

"Cisco reported solid results and guidance, bolstered by depleted customer inventory and positive AI commentary," wrote Jefferies analyst George Notter in a November 13 note. "Splunk was better than we expected. Order trends were strong – albeit on easy year-ago comparisons. Margins are looking good too as the company continues to manage costs tightly. We still think the risk/reward in the shares is tilted positively."

Related Content

• Kiplinger's Earnings Calendar for This Week
• Why Is Warren Buffett Selling So Much Stock?
• Best Dividend Stocks to Buy for Dependable Dividend Growth

Apple (AAPL) stock is trading in negative territory Friday even after the tech giant beat top- and bottom-line expectations for its fiscal fourth quarter.

In the three months ended September 28, Apple's revenue increased 6.1% year over year to $94.9 billion, boosted by 11.9% growth in its Services segment to $25 billion. The company said its earnings per share (EPS) improved 12% from the year-ago period to $1.64.

"Our record business performance during the September quarter drove nearly $27 billion in operating cash flow, allowing us to return over $29 billion to our shareholders [including through stock buybacks and dividends]," said Apple Chief Financial Officer Luca Maestri in a statement. "We are very pleased that our active installed base of devices reached a new all-time high across all products and all geographic segments, thanks to our high levels of customer satisfaction and loyalty."

The results topped analysts' expectations. Wall Street was anticipating revenue of $94.6 billion and earnings of $1.60 per share, according to CNBC. Meanwhile, Services revenue came in just below expectations of $25.3 billion.

Apple also said that iPhone sales increased 5.5% to $46.2 billion, Mac sales were up 1.7% to $7.7 billion and iPad sales rose 7.9% to $7 billion. On the other hand, Wearables, Home and Accessories sales decreased 3% from the year-ago period to $9 billion. 

Analysts were anticipating iPhone revenue of $45.5 billion, Mac revenue of $7.8 billion, iPad revenue of $7.1 billion, and Other products revenue of $9.2 billion.

Is Apple stock a buy, sell or hold?

Apple is up nearly 18% for the year to date on a total return basis (price change plus dividend) and Wall Street sees even more upside for the Dow Jones stock. 

According to S&P Global Market Intelligence, the average analyst target price for AAPL stock is $241.84, representing implied upside of nearly 9% to current levels. Additionally, the consensus recommendation is a Buy.

Financial services firm Wedbush is one of the most bullish outfits on AAPL stock with an Outperform rating (equivalent to a Buy) and a Street-high $300 price target.

"In a nutshell, this was a rock-solid quarter for Apple, and the iPhone 16 launch appears to be off to a very good start," says Wedbush analyst Daniel Ives. "The step-by-step rollout of Apple Intelligence will result in a strong December quarter but will also flow into the March and June quarters, which should be good news for fiscal year 2025."

Related Content

• Stocks Warren Buffett Is Buying and Selling
• Analysts' Top S&P 500 Stocks to Buy Now
• Stock Picks That Billionaires Love

Tesla's (TSLA) highly anticipated robotaxi event is just days away, with the big reveal slated for Thursday, October 10. TSLA stock has been gaining ground in the weeks leading up to the event, rising 17% in the past month, and investors are hopeful the robotaxi event will create another catalyst to drive shares higher.

The event has been dubbed "We, Robot" and will give Wall Street its first look at the Tesla Cybercab prototype and the platform that owners and riders will use to book rides. In addition, Tesla is expected to release an update to its Full Self-Driving (FSD) technology, which will enable the robotaxis to function, as well as a timeline to the production of the Cybercab and the launch of the service.

However, some analysts on Wall Street think Tesla is simply playing catch-up at this point.

"While Tesla is clearly focused on launching a robotaxi, Waymo and Cruise are already operating robotaxis in the U.S. today," says Bernstein analyst Toni Sacconaghi Jr. "The available data is clearly imperfect, but as of today Tesla appears to be lagging behind the leaders in the space."

Sacconaghi adds that Waymo, which is owned by Google's parent company Alphabet (GOOGL), has been working with regulators on its self-driving cars for over 10 years, while Tesla has not even begun the process.

Other Tesla news

On Wednesday, October 2, Tesla released its delivery numbers for the third quarter. Deliveries totaled 426,890, an increase of 4% from the prior quarter and 6% from the prior year.

Meanwhile, in a separate announcement on Thursday, October 3, Tesla said it recalled 27,000 Cybertrucks due to an issue with the rearview camera image not immediately activating when the vehicles were placed in reverse, according to the Associated Press. 

Is TSLA stock a buy, sell or hold?

Wall Street is on the sidelines when it comes to the Magnificent 7 stock. According to S&P Global Market Intelligence, the average analyst target price for TSLA stock is $208.64, representing a discount of more than 15% to current levels. Additionally, the consensus recommendation is a Hold.

Financial services firm CFRA Research is one of those with a Hold rating on Tesla stock, along with a $240 price target.

"We think the stakes are high, and there is more risk to the downside than upside given the stock's recent run-up and the likelihood that the event could disappoint," says CFRA Research analyst Garrett Nelson. "We also note the stock price run-up and then 'sell the news' pattern of major Tesla events historically. Specifically, we are looking for more visibility regarding intermediate-term earnings growth."

Related Content

• Top 10 Electric Cars in the US – Most Popular EVs
• Analysts' Top S&P 500 Stocks to Buy Now
• How the EV Tax Credit Works 2024

To help you understand how AI and other new technologies are affecting energy consumption, trends in this space and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

It’s getting hard to keep track of the eye-popping sums being invested in artificial intelligence start-ups.

For example, three-month-old Safe Superintelligence (SSI) recently raised $1 billion to develop safe AI, valuing the company, founded by a former chief scientist at Microsoft-backed OpenAI, at $5 billion. Poolside, a start-up building AI to write software, is reportedly in talks to raise nearly $500 million, for an estimated $3 billion valuation. And Glean recently raised $260 million to help build an AI platform for workers. 

Don’t expect the trend to slow down anytime soon, despite rising AI skepticism. Much of the funding will go to buying Nvidia (NVDA) chips or computing power from cloud companies that have installed them.

What are investors thinking? Some appear to be swapping out ROI for AGI. Instead of focusing on return on investment, venture capitalists and other start-up investors are thinking about artificial general intelligence, the advent of a super AI that cracks the code of human intelligence, and then improves on it. 

The term is bandied about often in tech circles, though the definition isn’t clear. Open AI’s founding goal is to build AGI, which it defines as “a highly autonomous system that outperforms humans at most economically valuable work.” Other AI companies and tech firms have similar projects and definitions. The possibilities of an AGI system are seemingly endless and hugely disruptive, at least in theory. Don’t overlook how many technology executives, workers and investors are true believers in this ill-defined inflection point, and the possibility of it happening as soon as one to three years from now. 

“It is possible that we will have superintelligence in a few thousand days (!); it may take longer, but I’m confident we’ll get there,” Sam Altman, CEO of Open AI, wrote this week in a post. The remark highlights the tension between the confidence and uncertainty surrounding AI’s holy grail.

A breakthrough that would upend the global economy is hard to imagine, despite the improvements in AI tech now taking place rapidly. Take such talk with a healthy dose of skepticism, as many of the benefits of generative AI are likely to accrue over a longer period, and many challenges remain. Venture capitalists can still cash in without a breakthrough if a start-up they funded is bought by a bigger company.

There’s another reason for the fever-pitch of dealmaking: A winner-takes-all mentality. Many industry insiders believe that one company will dominate each area of artificial intelligence, and getting to that dominant position requires fast action and lots of cash.  

One person trying to fend off a winner-takes-all world is Meta (META) CEO Mark Zuckerberg, who is giving away powerful AI tech for free in his push for “open source” AI software that prevents companies from being forced to rely on one dominant player. Zuckerberg’s plan stems from the restrictions he feels Meta’s collection of social media apps must abide by on mobile devices. He’s especially irked by the rules implemented by Apple's (AAPL) dominant mobile ecosystem, which Meta must follow to reach Apple’s global iPhone customer base.

So far, the plan is working. Meta’s AI models are seeing rapid adoption by start-ups and major companies, including AT&T, DoorDash, Goldman Sachs, Niantic, Shopify, Spotify and Zoom. 

Meta benefits from its AI models improving, which can be used to help generate more attention-grabbing posts on Facebook and Instagram, plus refine Meta’s underlying tech for its apps and advertising system. The strategy, which costs tens of billions of dollars to buy Nvidia products and install them in Meta’s data centers, also poses a serious challenge to Meta’s closest competitors building their own AI systems.

This forecast is from the team at The Kiplinger Letter, which has been running since 1923. It is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

Related Content

• Beyond the Hype: A Guide to Investing in AI
• How AI Could Have Positive and Negative Effects on Cybersecurity
• Can Stocks Picked by Artificial Intelligence Beat the Market?
• Best AI Stocks to Buy
• Tech Heavy Hitters Join Forces to Form AI Alliance

Dell Technologies (DELL) stock is set to end the week on a positive note, trading higher Friday after the computer maker beat top- and bottom-line estimates for its second quarter and provided a strong outlook for the third quarter and full fiscal year.

In the three months ended August 2, Dell's revenue increased 9.1% year-over-year to $25 billion, driven by an 80% spike in servers and networking revenue to a record $7.7 billion. Its earnings per share (EPS) increased 8.6% from the year-ago period to $1.89.

"We executed well in Q2, and I'm really proud of our team and our performance," said Dell Chief Operating Officer Jeff Clarke on the company's conference call. "Our AI momentum accelerated in Q2 and our results and outlook demonstrate that we are uniquely positioned to help customers leverage the benefits of artificial intelligence."

The results came in ahead of analysts' expectations. Wall Street was anticipating revenue of $24.5 billion and earnings of $1.71 per share, according to Yahoo Finance.

On the conference call, Dell said it anticipates full-year revenue in the range of $95.5 billion to $98.5 billion and earnings of $7.80 per share, plus or minus 25 cents. Analysts are forecasting revenue of $96.3 billion and earnings of $7.70 per share.

For the third quarter, Dell expects revenue to arrive between $24 billion to $25 billion and earnings of $2 per share, give or take 10 cents. Analysts are guiding for revenue of $24.6 billion and earnings of $2.20 per share.

Is Dell stock a buy, sell or hold?

The tech stock has had a great run so far in 2024, rising nearly 50% year to date and outperforming the broader market. Even after the significant rally, analysts think Dell stock has more room to run. 

According to S&P Global Market Intelligence, the consensus analyst target price for the blue chip stock is $152.17, representing implied upside of more than 30% to current levels. Meanwhile, the consensus recommendation is a Buy.

Financial services firm UBS Global Research maintained its Outperform rating (equivalent to a Buy) on DELL stock but lowered its price target to $158 from $164 following the earnings release.

AI server demand strength and strong infrastructure solutions group (ISG) margins should help drive multiple expansion, says UBS analyst David Vogt. 

Related Content

• Why Snowflake Stock Is Sinking After a Q2 Earnings Beat
• Kiplinger's Earnings Calendar for This Week
• Analysts' Top S&P 500 Stocks to Buy Now

Affirm Holdings (AFRM) stock is up by more than 30% at last check in Thursday's session after the leading buy now, pay later (BNPL) company beat top- and bottom-line expectations for its fiscal fourth quarter and issued a strong outlook for the quarter ahead.

In the three months ended June 30, Affirm's revenue increased 48% year-over-year to $659.2 million, driven by gross merchandise volume (GMV) growth of 31% to $7.2 billion. The company said its net loss per share narrowed to 14 cents from 69 cents in the year-ago period.

"We delivered excellent results in both the fourth fiscal quarter as well as full 2024 fiscal year," said Affirm CEO Max Levchin in a statement. "We grew GMV at a rate exceeding 30% and revenue at a rate exceeding 45% – in both the quarter and the fiscal year."

Affirm's results topped analysts' expectations. Wall Street was anticipating revenue of $604 million and a net loss of 51 cents per share, according to CNBC.

For the first quarter of fiscal 2025, Affirm said it anticipates revenue in the range of $640 million to $670 million, well ahead of analysts’ expectations of $625 million.

“By the end of this calendar year, we expect that Affirm will be natively integrated into four of the top digital wallets in North America," Levchin said. "Yet, with GMV barely over 2% of U.S. and Canadian e-commerce, we've only just scratched the surface of our opportunity.”

Levchin also announced a new goal of achieving profitability on a GAAP basis by the fourth quarter of fiscal 2025 and maintaining GAAP profitability from that point forward.

Is Affirm stock a buy, sell or hold?

Heading into today's session, Affirm was down nearly 36% for the year to date. Unsurprisingly, Wall Street has been on the sidelines when it comes to the tech stock. 

According to S&P Global Market Intelligence, the average analyst target price for AFRM stock is $36.97, representing a discount of more than 10% to current levels. Meanwhile, the consensus recommendation is Hold.

Financial services firm Wedbush is one of the more bearish outfits on AFRM stock with an Underperform rating (equivalent to a Sell) and a $20 price target.

"Affirm reported a solid quarter and provided a better than expected guide for fiscal 2025, which included anticipated GAAP profitability by the end of fiscal 2025,” said Wedbush analyst David Chiaverini said in a note this morning. "While results this quarter were solid and the outlook better than expected, we maintain our Underperform rating as we believe consumer lenders such as Affirm should be valued more in line with other consumer finance balance sheet lenders."

Related Content

• Salesforce Reports Earnings Beat, CFO Exit: What to Know
• Should You Buy Nvidia Stock After Earnings?
• Can Buy Now, Pay Later Plans Help You Build Credit?

Peloton Interactive (PTON) stock is trading notably higher in Thursday's session after the connected fitness company beat top- and bottom-line expectations for its fiscal fourth quarter.

In the three months ended June 30, Peloton's revenue increased 0.2% year-over-year to $644 million, marking its first annual revenue growth since the second quarter of its fiscal 2022. The company's net loss per share narrowed to 8 cents from 68 cents in the year-ago period.

"We ended the 2024 fiscal year with strong Q4 performance, meeting or exceeding our guidance on all key metrics and making continued progress on a number of our financial goals," Peloton said. "With a stable financial foundation now in place, we can focus on innovation in a more strategic way, enhancing our Member experience and driving sustainable, profitable growth over the long term."

The company's results handily beat analysts' expectations. Wall Street was anticipating revenue of $631 million and a net loss of 17 cents, according to CNBC.

Here's what Peloton expects to accomplish in the first quarter and full year of fiscal 2025:

For the first quarter of PTON's fiscal 2025, analysts anticipate revenue of $609 million and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $45 million. While the company's revenue forecast is below the Street's expectations, its higher EBITDA outlook reflects a focus on long-term profitable growth.

For the full-year, analysts are calling for revenue of $2.7 billion.

Is Peloton stock a buy, sell or hold?

Peloton has put Wall Street through the wringer since its pandemic peak. This year alone, shares are down nearly 29% – including Thursday's post-earnings surge. Unsurprisingly, Wall Street is on the sidelines when it comes to the consumer discretionary stock. 

According to S&P Global Market Intelligence, the consensus analyst target price for PTON stock is $4.75, representing implied upside of more than 14% to current levels. Meanwhile, the consensus recommendation is a Hold. 

Financial services firm UBS Global Research is even more bearish on the stock, with a Sell rating and a $2.50 price target.

"We believe consistent momentum in positive growth in total interactive visits could signal traction in demand, but we are also mindful of seasonal promotional activity that could temporarily impact these metrics over shorter periods," wrote UBS analyst Arpine Kocharyan in an August 13 note. "We believe investors remain focused on 2025 connected fitness subscription growth, especially as it becomes evident that the tiered app membership approach and the relaunched app did not drive the conversion to connected fitness many were expecting."

Related Content

• The Worst Types of Stocks to Buy
• Penny Stocks: Why You Should Always Stay Away
• Kiplinger's Earnings Calendar for This Week

Apple (AAPL) is is the only Magnificent 7 stock trading in positive territory Friday after the tech giant beat top- and bottom-line expectations for its fiscal  third quarter.

In the three months ended June 29, Apple's revenue increased 4.9% year-over-year to $85.8 billion, driven by 14.1% growth in services to $24.2 billion. Its earnings per share (EPS) improved 11.1% from the year-ago period to $1.40.

"During the quarter, our record business performance generated EPS growth of 11 percent and nearly $29 billion in operating cash flow, allowing us to return over $32 billion to shareholders," said Apple Chief Financial Officer Luca Maestri in a statement. "We are also very pleased that our installed base of active devices reached a new all-time high in all geographic segments, thanks to very high levels of customer satisfaction and loyalty."

The results handily beat analysts' expectations. Wall Street was anticipating revenue of $84.5 billion and earnings of $1.35 per share, according to Yahoo Finance.

Apple also said that Mac sales increased 2.5% to $7 billion and iPad sales surged 23.7% to $7.2 billion. On the other hand, iPhone sales slipped 0.9% to $39.3 billion and Wearables, Home and Accessories sales decreased 2.2% from the year-ago period to $8.1 billion.

On Apple's conference call, Maestri said the company expects revenue to grow at a similar rate in its fourth quarter from the prior year, including a double-digit growth rate in services.

Is Apple stock a buy, sell or hold?

It was a rough start to the year for Apple, but shares turned a corner in early May after the company unveiled a massive stock buyback program. Since May 1, AAPL is up nearly 32%, adding to its impressive long-term return. 

Unsurprisingly, Wall Street is bullish on the blue chip stock. According to S&P Global Market Intelligence, the average analyst target price for AAPL stock is $231.32, representing implied upside of nearly 4% to current levels. Additionally, the consensus recommendation is a Buy.

Financial services firm Needham is one of those with a Buy rating on AAPL stock.

"We argue that the best way to think about AAPL's valuation, pricing power, competitive advantage period, and barriers to entry is through the lens of AAPL's installed base of more than 1.25 billion of the wealthiest consumers in the world using more than 2.2 billion active devices an average of 5 hours per day," said Needham analyst Laura Martin said in a note this morning. 

"We believe AAPL's goal is to grow long-term volume through increasing the average revenue per user and lowering churn levels by up-selling its users into additional devices and services," Martin adds

Needham has a $260 price target, which sits more than 16% above where Apple is currently trading.

Related Content

• Amazon Stock: Why One Analyst Says to Buy the Earnings Dip
• Analysts' Top S&P 500 Stocks to Buy Now
• Stock Picks That Billionaires Love

To help you understand how AI and other new technologies are affecting energy consumption, trends in this space and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

Emerging artificial intelligence technology has set off a frenzy of competition among tech giants. The resulting avalanche of tech spending has led to soaring revenue at AI suppliers, especially Nvidia (NVDA), which makes must-have AI chips.

There’s a problem, though: Growing concerns that generative AI will take too long to pay off. “Tech giants and beyond are set to spend over $1 trillion on AI capex in coming years, with so far little to show for it,” reads the opening of a recent Goldman Sachs publication, “Gen AI: Too Much Spend, Too Little Benefit?” The report cobbles together analysis from interviews with Goldman Sachs analysts and outside experts. 

It underscores an emerging skepticism, even from AI backers, as pressure builds for real products and real profits. Facebook owner Meta (META), for example, will spend up to $40 billion on capital expenditures this year. Alphabet (GOOG), Amazon (AMZN), Apple (AAPL) and Microsoft (MSFT) are spending huge sums on Nvidia chips and related tech infrastructure. Other tech and nontech companies are investing heavily, too.

The supercharged AI chatbots from ChatGPT and others can create text, images, video, data analysis and much more. The tech can assist in medical discovery and legal research or generate computer code and flag security threats. Users interact with the chatbots in plain English, much like an online search engine, so no special technical know-how is necessary. That means, in theory, that millions of consumers and workers can adopt the tech rapidly, especially as tech giants push hard to integrate it into their products and services.

But previous new technology platforms have taken a decade or more to garner mass adoption and yield widespread productivity gains. And the new crop of AI has the distinctive challenge, at least right now, of being an extremely high-cost technology to build that isn’t quickly replacing or disrupting anything. It’s still early and costs will go down, but as more money gets poured into the tech, the return on investment will have to be that much bigger to justify the cost.

If there is a bubble in AI spending, there’s good reason to think it won’t burst soon, say some Goldman Sachs analysts. That’s not exactly a comforting thought, but note some stark differences between today’s AI mania and the 1990s dot-com debacle. Today’s tech giants are flush with cash and have huge customer bases. The level of spending is not that different from other huge technology shifts in the consumer and business market. Also, Wall Street is paying closer attention to return on investment now and is quicker to penalize companies that come up short. On top of that, today’s AI systems truly are amazing innovations with serious long-term potential.

What's next for Generative AI?

With lots of questions about the future, here are four forecasts for making sense of what’s next for generative AI.

Don’t hold your breath for a single breakthrough dominated by one event, app or company, as generative AI spreads. The tech is being integrated, sometimes seamlessly, into consumer and business products and services, such as work collaboration tools, e-mail, word processing, photo editing and online search. For example, Adobe (ADBE) Photoshop already uses AI to create images or transform photos, and LinkedIn uses it to help write user posts. For its part, Meta says its AI investment is helping improve personalized recommendations and ads.

Direct revenue will remain hard to come by. Getting consumers and businesses to fork over extra money for premium AI services won’t be easy, especially for start-ups. But look for early signs of moneymaking potential at Microsoft and Alphabet. Both are charging for their AI tools. Microsoft’s AI assistant CoPilot runs $30 per month per user. Alphabet is charging $20 per month per user for its Google Gemini service. The companies will be eager to highlight any positive signs of rising revenue from AI.

Business adoption will be a bumpy ride. Companies have to contend with cybersecurity risks and inaccurate responses generated by AI chatbots. However, they can look forward to new AI in coming updates of the software they use, which could lead to productivity wins. Surveys show that executives lack a clear plan and are worried about how to prove any benefits. That’s true even if many of their workers are already using generative AI tools, often on the down-low, for work tasks.

Expect a shakeout of sorts in the next year or so. That time horizon is when analysts are looking for hit products and services that gain mass adoption. Expect a harsher assessment of leading AI companies by Wall Street if they aren’t showing clear signs of growing AI adoption, new hit services and increasing sales. In a couple of years, don’t be surprised if big tech and other companies start reassessing their AI spending, perhaps reining in some outlays while prioritizing more focused strategies.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

Related Content

• How AI Could Have Positive and Negative Effects on Cybersecurity
• Can Stocks Picked by Artificial Intelligence Beat the Market?
• Best AI Stocks to Buy
• We Don’t Have to Let AI Win
• Tech Heavy Hitters Join Forces to Form AI Alliance

To help you understand what is going on in the technology and manufacturing sectors and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

In addition to the exploding sales of artificial intelligence chips this year the rest of the semiconductor industry continues to look good — either with solid sales growth or sales set to rebound in the second half. AI chip sales are only about 5%-10% of the $600 billion industry. 

Inventory levels are back under control for memory chips, after a huge glut last year. Supply chains are stable, for the most part. And there’s strong order growth, a good predictor of future sales. It doesn’t seem as though anything will stop Wall Street’s love affair with chip firms, especially after Nvidia’s recent results beat expectations. Even chipmakers in the automotive and industrial space, now slogging through weak sales, should rebound in sales by year-end. That’s expected to reignite investor interest. Notable risks aren’t likely to dim the outlook but continue to loom, such as geopolitical tensions, the war in Ukraine and U.S. political dysfunction. 

Keep an eye on India’s effort to expand its nascent semiconductor industry, according to a recent report by the Information Technology and Innovation Foundation — a tech think tank. The report stems from a federal tech initiative to work with India. 

Among the many factors in India’s favor are massive government support, a robust chip workforce, a huge domestic market and competitive labor costs. Many U.S. chip firms already have R&D offices in India, including Intel, Nvidia, and Qualcomm. 

Recent developments include memory chipmaker Micron setting up shop, with an assembly and testing facility opening in 2024. AMD is investing $400 million over five years. Plus, the government recently OK’d India’s first major chipmaking plant. A rising Indian chip sector would ease U.S. reliance on Taiwan and China. 

Despite promising signs, there are many challenges, ranging from taxation and regulations to transportation and energy. Still, India seems serious about chips

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

Related stories

• Stock Market Today: Nvidia Tops $2 Trillion in Market Cap
• The Best Semiconductor Stocks to Buy
• Semiconductor Sales Will Bounce Back in 2024: The Kiplinger Letter
• Huawei's Chip Breakthrough Triggers U.S. Scrutiny: The Kiplinger Letter
• Best AI Stocks to Buy: Smart Artificial Intelligence Investments

Stocks closed higher for a second straight day as anxiety eased ahead of tomorrow's key Fed decision. 

Turmoil in the financial sector has sparked volatile price swings in bank stocks in recent weeks, but a lack of jarring headlines today helped calm investors' nerves. Some bargain hunting also buoyed the broader market, with financial and energy – two of the most beaten-down sectors of late – seeing notable upside on Tuesday. 

Lifting the financial sector were words from Treasury Secretary Janet Yellen, who said in prepared remarks for a speech to the American Bankers Association that the government is prepared to "to protect the broader U.S. banking system" from "the risk of contagion." First National Bank (FRC) was among the biggest movers today, surging 29.6%. Still, shares of the regional lender are roughly 90% lower than where they closed last Tuesday. 

PacWest (PACW, +18.8%) and Western Alliance Bancorp (WAL, +15.0%) were two other bank stocks that enjoyed big gains. 

Energy was another outperforming sector, rising 3.5% as U.S. crude futures climbed 1.2% to $68.48 per barrel – their highest close in a week. Signs of stabilization in the banking industry is helping lower expectations of a recession, which in turn is boosting the oil market. APA (APA, +6.6%), Devon Energy (DVN, +4.4%) and Marathon Oil (MRO, +5.6%) were some of the best energy stocks today.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Still, the bulk of Wall Street's attention remains focused on the Federal Reserve; specifically, how big of a rate hike – if any – will the central bank announce tomorrow. The Fed meeting kicked off today, and has become even more anticipated over the past two weeks following the failures of Silicon Valley Bank and Signature Bank. Chances for a 50 basis point (0.50%) rate hike quickly went out the window after the bank closures, with Fed funds futures currently pricing in an 86.4% probability of a 0.25% rate increase, according to CME Group.

"Just as rising interest rates were part of the recipe that led to SVB's collapse, interest rates will be impacted in turn again in the aftermath of the collapse," says Shyam Pradheep, general manager at financial education app Zogo. "While we don't know which way the Fed will go yet, many will be looking at whether there is a shift in the balance between wrestling inflation to the ground, meaning further rate hikes, and keeping the economy from tumbling into a recession with flat or lower rate hikes in the future." 

Ahead of tomorrow's highly anticipated event, the Nasdaq Composite rose 1.6% to 11,860, the S&P 500 added 1.3% to 4,002, and the Dow Jones Industrial Average gained 1.0% to 32,560.

AI's top stock picks

The recent volatility in the stock market isn't for faint-of-heart investors, but it can be an exciting environment for stock pickers. While not everyone has access to the same insights and data that deep-pocketed investors or hedge funds have, investors can still track their top stock picks as one potential way to identify the best stocks to buy. 

Another approach leverages artificial intelligence (AI). Danelfin is an analytics platform that uses AI to analyze hundreds of fundamental, technical and sentiment data points per day for 1,000 U.S.-listed shares and 600 European-listed firms. Danelfin's algorithms then generate stock picks that it views as highly likely to outperform the market over the next 30 to 90 sessions. 

So, what does Danelfin say investors should be buying now? Read on as we take a look at the platform's latest high-scoring stocks.

Stocks opened lower Monday as investors caught up on this weekend's onslaught of concerning headlines. 

After closing down Silicon Valley Bank – a regional lender owned by SVB Financial Group (SIVB) – Friday, regulators over the weekend pulled the plug on Signature Bank (SBNY), a New York-based financial firm with ties to the cryptocurrency market. Officials, who cited systemic risk as the catalyst for the closures, took emergency measures to prevent contagion, but bank stocks were still among Wall Street's biggest decliners today. 

U.S. banking regulators from the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve and the Treasury Department quickly came together over the weekend to develop a plan to limit risk to the banking sector following the failure of Silicon Valley Bank and Signature Bank. The efforts included covering all deposits for customers of the failed banks. The Fed also created a new emergency initiative that will offer short-term loans to banks, credit unions and other depository institutions in order to "provide an additional source of liquidity against high-quality securities, eliminating an institution's need to quickly sell those securities in times of stress." 

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

And while these efforts will help avert a crisis in the financial system, bank stocks took a beating today. First Republic Bank (FRC, -61.8%) was among the day's biggest decliners, while regional banks Western Alliance (WAL, -47.1%) and PacWest Bancorp (PACW, -21.1%) also racked up sizable losses.

Elsewhere, Treasury yields collapsed as investors sought out safety in government bonds. The 10-year Treasury yield fell 14.6 basis points to 3.541%, while the yield on the 2-year note slumped 58.7 basis points to 3.999%. (A basis point = 0.01%.) Prices for gold futures (+2.6% to $1,916.50 an ounce) and gold stocks also climbed thanks to their safe-haven status. 

The major indexes, meanwhile, managed to stabilize after a rough start. By the close, the Nasdaq Composite was up 0.5% at 11,188, while the S&P 500 slipped 0.2% to 3,855, and the Dow Jones Industrial Average gave back 0.3% to 31,819.

Inflation updates on deck

The failure of Silicon Valley Bank and Signature Bank appears to have been a result, in some part, of the Federal Reserve's aggressive rate-hiking efforts. Over the last 12 months, the Fed has lifted its short-term federal funds rate to a target range of 4.50% to 4.75% from 0.00% to 0.25%. 

"For the Fed, the crisis comes at a pivotal time – investors are looking ahead to tomorrow's Consumer Price Index data and releases later this week for retail sales and the PPI [Producer Price Index] to assess whether the recent upswing in inflation is a persistent and widely entrenched issue," says José Torres, senior economist at Interactive Brokers. "Regardless of this week’s economic data, however, it's likely that the Fed has landed between a rock and a hard place as it must balance financial stability with its efforts to curtail inflation." 

The next CPI report will be released ahead of tomorrow's open, while PPI and retail sales are due out Wednesday morning. The next Fed meeting starts Tuesday, March 21, with the market pricing in a 25 basis point interest rate hike, according to CME Group. The probability for a 50 basis point hike, meanwhile, has plunged to zero from 40.2% on Friday.

Stocks spent the early part of Friday morning chopping between positive and negative territory as investors dissected the February jobs report. However, chaos erupted on Wall Street after regulators shut down Silicon Valley Bank, a regional financial firm that services many of the largest tech companies. What resulted were big losses for the major indexes and substantial slides for a number of bank stocks. 

Wall Street had been waiting for the February jobs report with bated breath. It was just earlier this week that Federal Reserve Chair Jerome Powell warned the central bank is prepared to issue more rate hikes if economic data continues to come in strong. Data released earlier underscored a resilient labor market, with the U.S. adding a much higher-than-expected 311,000 new jobs last month. However, the report wasn't all that bad, with the unemployment rate edging up to 3.6% from 3.4% in January, and the pace of wage growth slowing – good news on the inflation front.

"From an equity market standpoint, the jobs report was mixed but on balance probably better than feared. The headline jobs number was strong but importantly hourly earnings were contained," says Matt Peron, director of research at Janus Henderson Investors, adding that this should provide some relief that "extremely high rates might not come to pass." Still, the analyst remains cautious, "as the impact of rates is just starting to appear in the broader economy and inflation is still too high for the Fed's comfort level."

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

The day's mood quickly shifted on news that Silicon Valley Bank had collapsed, marking the largest bank failure since the 2008 financial crisis. Shares of SVB Financial Group (SIVB) – which owns Silicon Valley Bank – slumped more than 60% Thursday amid serious debt concerns, and were halted earlier today.

"The story began when insiders were advising clients to pull their money out, and as is often the case when financial institutions start to falter, people shot first and asked questions later," says Louis Navellier, chairman and founder of Navellier & Associates. "Why should this matter? Because fears are high that problems there may spread to other regional banks."

Indeed, bank stocks were some of the biggest losers on Wall Street today. Among those notching notable losses were Silvergate Capital (SI, -10.6%), Signature Bank (SBNY, -22.9%) and First Republic (FRC, -14.8%). 

As for the major indexes, the Dow Jones Industrial Average fell 1.1% to 31,909, the S&P 500 slumped 1.5% to 3,861, and the Nasdaq Composite shed 1.8% to 11,138.

Biden's budget and investors

We focus on investing in this space, but sometimes it's just as important to be mindful of other financial topics, like taxes. Take President Joe Biden's budget for the upcoming fiscal year, which the White House says will reduce the deficit by roughly $3 trillion over 10 years. Among the proposals is a near-doubling of the capital gains tax rate. Additionally, the president's budget includes a "wealth tax" on the country's richest people. 

"If Biden's tax plan were enacted, there would be noticeable investor implications," says Pratik Patel, managing director and head of family wealth strategies, BMO Family Office. However, Patel reminds investors that "Biden's budget and tax plan is a wish list, especially with a divided Congress. It's important for investors to take a wait and see approach before making any drastic investment decisions driven by fears of higher taxes in the future."

Stocks closed higher Monday, bouncing back after the major benchmarks finished their worst week of 2023 on Friday. 

Amid declining Treasury yields, the rate-sensitive tech sector saw big gains, while a surge in the share price of railroad company Union Pacific (UNP) helped lift industrial stocks.  

The three main indexes notched weekly losses around 3% last week – their biggest of the year so far. "The weakness in equity markets has come amidst a round of economic data that has been stronger than expected while inflation data has suggested the disinflationary process will be a bumpy road," says Michael Reinking, senior market strategist at the New York Stock Exchange. "Last week, yields moved above their December highs which seemed to be the trigger that finally caused some downside momentum in equity markets."

Today's economic data was more mixed. While headline durable goods orders fell by a more-than-expected 4.5% month-over-month in January, the core reading, which excludes the volatile nondefense aircraft category, unexpectedly rose 0.7%. Elsewhere, pending home sales jumped a higher-than-anticipated 8.1% last month.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Still, bond yields declined, which sparked buying across Wall Street. The tech-heavy Nasdaq Composite climbed 0.6% to 11,466, the broader S&P 500 gained 0.3% to 3,982, and the blue-chip Dow Jones Industrial Average added 0.2% to 32,889.

In single-stock news, Union Pacific jumped 10.1% after the railroad operator said its CEO Larry Fritz will step down from the position later this year. The C-suite shift comes amid pressure from hedge fund Soroban Capital Partners, which owns roughly 4.6 million UNP shares.

Why Nvidia has been one of the best stocks to own

We've talked a lot about stock picking in this space recently. Whether it be the stocks Warren Buffett is buying and selling or the blue chip stocks favored by hedge funds or the top stock picks of billionaires. All of these show us what the smart money – those with deep pockets and access to research and insights typically not available to the average retail investor – are doing with their money. 

But sometimes it's plain old math that reveals where the best investment ideas are. Take Nvidia (NVDA), for instance. Not only has NVDA stock been a recent market-beater, but it's turned in a jaw-dropping return for those who invested $1,000 in the semiconductor stock 20 years ago. And there's reason to believe Nvidia is positioned for more success. NVDA is one of the best AI stocks in the rapidly growing space, and the company's data center and automotive segments are seeing impressive growth.

 Selling resumed on Wall Street Friday, with investors spooked by another hot inflation update. A solid reading on consumer sentiment only created stiffer headwinds for the major indexes, with the broad market suffering its worst weekly loss of the year.  

Ahead of the opening bell, the Bureau of Economic Analysis said the personal consumption-expenditures (PCE) index, the Fed's preferred measure of inflation that tracks consumer spending, was up 0.6% in January – its biggest monthly increase since last summer. Year-over-year, the PCE index rose to 5.4%, marking its first increase in seven months. Core PCE, which excludes volatile food and energy prices, was also higher than what was seen in December.

"Just days after minutes from the last Federal Reserve meeting showed unanimous support among policy makers for ongoing rate increases, this morning's PCE depicts strong, ongoing inflation and strong consumer spending, strengthening expectations of substantial monetary tightening in the coming months," says José Torres, senior economist at Interactive Brokers.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Separate data showed the University of Michigan's consumer sentiment index rose 3% from January to February to 67, confirming a previously released preliminary report. The increase came amid "improvement in the short-run economic outlook," the report said, though consumers "continued to exhibit considerable uncertainty over short-run inflation."

In single-stock news, Carvana (CVNA) plummeted 20.5% after the online auto dealer reported a sharp year-over-year decline in units sold (-23%) and revenue (-24%) in Q4. CVNA also said it will reduce operating costs by $1 billion by the second quarter, but not with layoffs. "We expect these expense reductions to be broad-based across all large SG&A expense components, but importantly, we do not expect a reduction-in-force to be part of this  plan," Carvana said in a letter to shareholders.

As for the major indexes, they finished well off their session lows but were still solidly in the red. The Dow Jones Industrial Average fell 1.0% to 32,816, the S&P 500 shed 1.1% to 3,970, and the Nasdaq Composite dropped 1.7% to 11,394. All three indexes notched their biggest weekly losses of the year.

Where to find defensive portfolio strategies

The road to get inflation down to normal levels will be long and bumpy, says Eric Sterner, chief investment officer at Apollon Wealth Management. And this could give the upper hand to the bears for the time being, Sterner adds, noting that amid this uncertain backdrop, investors "should maintain defensive portfolio strategies in the near term as the Fed will remain hawkish and earnings will continue to be pressured." 

There are ample ways investors can employ defensive strategies in their portfolios. These include targeting the best dividend stocks or gaining exposure to consumer staples stocks or utility stocks. Another tactic is to see what the smart money is doing by following their top stock picks. According to regulatory filings, billionaire investors have been busy bargain hunting during this bear market, including scooping up some popular blue chip stocks.

The major benchmarks opened higher Thursday, with tech stocks leading the way on an impressive outlook from graphic chipmaker Nvidia. 

And while investor sentiment temporarily waned midday as "good news is bad news" jobs data amplified rate-hike fears across Wall Street, stocks found their footing by the close. 

Specifically, weekly jobless claims unexpectedly fell by 3,000 last week to 192,000. This marks the sixth straight week initial unemployment claims have been below 200,000, underscoring a tight labor market. 

"The Fed has repeatedly and consistently pointed to the labor market as being one of the, if not the key, indicators it is watching when making monetary policy decisions," says Scott Wren, senior global market strategist at Wells Fargo Investment Institute. "The tighter the labor market the more upward pressure on wages and the more cash consumers have in their pockets. American consumers with cash in their pockets tend to spend it. The Fed wants demand to fall relative to supply, theoretically allowing price pressures to ease. A softer labor market would help."

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Also on the economic front, the second reading on fourth-quarter gross domestic product (GDP) showed the U.S. economy grew at a 2.7% annual pace in the final three months of 2022. This was revised lower from the initial reading of 2.9% released in January amid a slowdown in consumer spending.

"Despite GDP being revised down, the outright number points to an economy that remains strong," says Alexandra Wilson-Elizondo, head of multi-asset retail investing at Goldman Sachs Asset Management. Nevertheless, Wilson-Elizondo believes "this year will not be a repeat of last year as the Fed's approach will prove to be more balanced while they wait to see the impact of current policy," and says that the "re-pricing in rates" and subsequent drop in stocks creates "a buying opportunity."

At the close the S&P 500 was up 0.5% at 4,012, and the Dow Jones Industrial Average was 0.3% higher at 33,153. The Nasdaq Composite outperformed, adding 0.7% to 11,590, as Nvidia (NVDA) rallied 14.0% after reporting earnings – lifting its fellow semiconductor stocks. 

While NVDA reported sharp year-over-year declines in its fourth-quarter earnings and revenue, optimism around the company's chips – which are used to power generative AI systems like ChatGPT – and an expected recovery in its gaming division boosted the shares.

Hedge funds' top blue-chip stock picks

"What's the smart money doing?" This is a question we try to answer each quarter through regulatory filings. This is not done to duplicate the actions taken by hedge funds, institutional investors and high-net-worth individuals. Instead, we do this as a learning exercise, to see what those with access to research and insights typically not available to the average retail investor are doing with their money – especially during periods of market volatility and economic uncertainty.

For instance, among the stocks Warren Buffett was buying and selling in Q4 was Taiwan Semiconductor Manufacturing (TSM). This created a bit of whiplash for investors who follow the Oracle of Omaha, as the chip stock was first added to the Berkshire Hathaway equity portfolio only a quarter earlier. Buffett also continued to cut back on bank stocks in what was a fairly quiet quarter for the billionaire investor.

As for hedge funds, they "played defense in 2022," says Ben Snider, senior strategist on the U.S. Portfolio Strategy macro team for Goldman Sachs, and "entered 2023 with the most anti-Momentum tilt in their long portfolios on record." Mostly, hedge funds spent the fourth quarter selling off blue-chip stocks, particularly Dow Jones stocks. Here's a quick look at hedge funds' 21 top blue-chip stock picks as of Dec. 30, 2022.

It was a rough start to the holiday-shortened week as rising geopolitical tensions between the U.S. and Russia – and a rare revenue miss from Home Depot (HD) – sent stocks tumbling Tuesday. 

Investors also got hit with some stronger-than-expected economic data, which heightened fears that the Fed could keep interest rates higher for longer. All of this sparked a risk-off session that resulted in substantial losses for the major benchmarks. 

Geopolitical headlines from over the weekend created shaky footing for stocks ahead of Tuesday's opening bell. Specifically, U.S. President Joe Biden made a surprise appearance in Kyiv, Ukraine, Monday alongside Ukrainian President Volodymyr Zelensky. This unexpected visit was followed by reports that Russian President Vladimir Putin said he is suspending the country's participation in a nuclear arms treaty with the United States. 

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Headwinds for the broad market only strengthened after an early morning earnings report from major retailer Home Depot. Shares slid 7.1% – easily making HD the worst Dow Jones stock today – after the home improvement retailer reported modest year-over-year increases in its fourth-quarter earnings and revenue. However, revenue fell short of Wall Street's consensus estimate, the first time HD has missed on the top line since November 2018. The company also saw a 6% year-over-year decline in customer transactions, though inflation boosted the average ticket cost.

As for today's economic data, the S&P Global flash services purchasing managers index (PMI) and manufacturing PMI both came in higher than expected. But while the latter showed factory activity increased from January to February, it is still in contraction territory.

"The U.S. economy is finding its balance as demand for services picked up in February," says Jeffrey Roach, chief economist at LPL Financial. "A tight labor market and resilient consumer demand could goad the Federal Reserve to maintain its rate hiking campaign into the summertime. Investors should expect volatility until markets and central bankers come to agreement on the expected path for interest rates."

At the close, the Nasdaq Composite was off 2.5% at 11,492, the S&P 500 was 2.0% lower at 3,997, and the Dow Jones Industrial Average was down 2.1% at 33,129.

Walmart stock shines after earnings

One name that showed resilience today was big-box retailer Walmart (WMT). The company reported top- and bottom-line beats for Q4, and said it saw an 8.3% rise in same-store sales and a 17% jump in e-commerce sales. Additionally, in the company's earnings call, Chief Financial Officer John Rainey said inventory was flat on a year-over-year basis, and down 3% for Walmart U.S. Excess inventory was a major concern for retailers in mid-2022.

This sent WMT stock up 0.6% today, making it the best Dow Jones stock – and the only blue chip that finished higher. In addition to its solid earnings report, WMT benefited from being one of the best consumer staples stocks around. This sector typically outperforms in periods of market turbulence for several reasons, including the fact that its constituents sell items that people need in both good times and bad, such as toilet paper or packaged foods. A number also happen to be some of the best dividend stocks on Wall Street, offering consistent and reliable income to help offset broad-market declines.

Investors fretted over persistently high inflation and the Federal Reserve's future rate-hike plans Friday, which sent most stocks lower into the long holiday weekend. 

(For those wondering "is the stock market open on Presidents' Day," which is this Monday, Feb. 20, the answer is no.) 

And while the Dow managed to outperform its fellow indexes today on strength in healthcare stocks Amgen (AMGN) and Merck (MRK), it still finished the week with an unwelcome milestone. 

Wall Street's ramped up worries over more rate hikes from the Fed came courtesy of this week's higher-than-expected January inflation readings. The market is now pricing in a quarter-point increase in interest rates at each of the central bank's next three gatherings, with the next Fed meeting occurring in late March.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Several Fed speakers this week have suggested more aggressive rate hikes in order to tame inflation. Speaking at the Tennessee Bankers Association in Nashville earlier today, Fed Governor Michelle Bowman – a voting member of the Federal Open Market Committee (FOMC) – said the central bank is not seeing what it needs to be seeing, "especially in terms of inflation." The Fed has "to continue to raise the federal funds rate until we start to see a lot more progress on that," she added.

In single-stock news, DraftKings (DKNG) stock jumped 15.3% after the sports betting platform said fourth-quarter revenue was up 81% year-over-year to $855 million, more than analysts were expecting. The company also reported a slimmer-than-anticipated per-share loss of 53 cents, and raised its full-year forecast. DoorDash (DASH) was another big post-earnings mover, though its shares fell 7.6% after the food delivery company reported a wider-than-expected Q4 loss. Next week's earnings calendar heats up, with a number of retailers set to report, including Home Depot (HD) and Walmart (WMT). 

At the close, the Nasdaq Composite was off 0.6% at 11,787 and the S&P 500 was 0.3% lower at 4,079. The Dow Jones Industrial Average rose 0.4% to 33,826. Both the S&P 500 and Dow finished lower for the week, with the latter notching a third straight weekly loss – the longest such streak since September. 

The best commodity ETFs to buy

Crude futures and gold ended lower on the week in what has been a rough stretch for the commodities market. Commodities rallied to start the year thanks to a weaker dollar, as well as "a cooling U.S. economy, a resurgent China and a recovering Europe," says Goldman Sachs economist Jeffrey Currie. More recently, though, a rising dollar, stronger-than-expected U.S. economic data and "a seasonal slowdown in China's economy" have created headwinds for oil and metals. 

Still, Currie believes "fundamentals will rebound this spring" and maintains a bullish outlook on commodities. Investors sharing the same sentiment can find plenty of opportunities among the best energy stocks or the top gold stocks. And for a broader approach, these are the best commodity ETFs to buy now.

Princeton University emeritus economist Burton Malkiel, who turns 91 this year, has published a 50th-anniversary edition of his investing classic, A Random Walk Down Wall Street.

Kim Clark, Kiplinger: So much has changed since your first edition — there weren’t even any index funds for individual investors then. What are the best developments for investors you’ve seen in the past 50 years?

Malkiel: Index funds. And Roth IRAs. People ought to use Roths because you can save for retirement in a tax-friendly way — without paying tax on any of the gains. Money market funds are a real boon for investors because bank accounts are earning essentially zero even when short-term interest rates are high. Zero-commission trading is another big deal. Exchange-traded funds allow the individual investor to access funds with zero commissions. These are, without any question, advantages for the individual investor.

What are the worst changes?

Some trading platforms have marketed themselves as investors’ best friends. They are lovely sites that made it easy and like a game to gamble by buying and selling stock. As you know, I am a buy-and-hold investor. Some of the other things that have led many people to disaster are cryptocurrency, non-fungible tokens (NFTs), and the Reddit mobs.

You wrote another book in 2008 on investing in China. Have your views on international investing changed?

I still recommend that you have some international diversification and some exposure to emerging markets. The valuations are very much more attractive in emerging markets than they are in the United States right now. Fifteen years ago, I would have said if you’re in one emerging market country, you should be in China. I’d probably pick India today. I may be a little less optimistic about China than I have been in the past. A number of things President Xi Jinping has done have not been helpful. I think there will be stronger growth in India.

We had a pullback in stocks in 2022. But price-earnings ratios for the broad market still average about 17, higher than the historical average. And when you first wrote your book in 1973, the stock market’s average dividend yield was greater than 3%. Now we’re at half that. What do these valuation measures tell us about the stock market’s outlook?

Even with the decline, valuations are far less attractive than they’ve been. And while nobody can predict what the stock market is going to do over the short run, I think we’re going to have a tough market. Generally, when valuations are stretched, you don’t get 9% or 10% annualized returns. You’re much more likely to be in the 6% area. But that doesn’t mean you should say “Oh my God, I don’t want common stocks anymore!” Stocks are the only things that, reliably, in good times and bad, have rates of return that exceeded inflation in the long run.

If the overall market is still expensive, why should people put their money into a broad index fund? Why shouldn’t they just buy bargain stocks or a value fund?

Because we know perfectly well that over the long haul, that simply doesn’t work. The evidence is very clear. Over the long term, the old, boring total stock market index fund is the winner because the market is a random walk. S&P Dow Jones Indices publishes something called a SPIVA report [SPIVA is an acronym for S&P Indices Versus Active]. On average, two-thirds of active managers are beaten by the index in any given year. And the ones who beat the index in one year are not the same ones who beat the index the next year. When you compound that over 10 years, you find that 90% of funds don’t beat the index. And let me just conclude by mentioning one person who has beaten the indexes over his lifetime: Warren Buffett. Buffett has told his trustees he wants his estate invested in index funds. That’s a very good example of how even the guy who has actually done it knows perfectly well how hard it is and how unlikely it is that anyone’s going to do it in the future.

Another big change in 50 years is the growth of research in behavioral finance. How has that changed your advice?

It’s very important to know about behavioral finance, know the biases we have, know how difficult it is for us to keep on track when, as Pogo would say, you know the enemy and realize it’s us. Just as it is hard for people to stay on a diet, it’s hard for people to save regularly because when the sky is falling — when it’s 2007 and the whole world’s financial system is falling apart — you say, “Oh, no, no. I’m not going to put money in now.” That is exactly the time when you should put money in.

One of the things that’s new in this edition of the book is an understanding that dollar-cost averaging can really help. If you are regularly investing when the market is down, you’re buying more shares. We had a terrible time at the beginning of the 21st century [from 2000 to 2009]. The S&P 500 index was the same at the end of the period as it was at the beginning. But the investor who contributed regularly, dollar-cost averaged, and reinvested dividends actually made more than 5% on average per year. That’s pretty darn good.

The new edition gives an example of somebody who put a bit more than $20 a week into a total stock market index fund starting in 1978, shortly after index funds were first available from Vanguard. That person today would have $1.5 million. Wow! What I think is the most important lesson is that for people of modest means, who’ve never had big salaries, my book shows that they could accumulate a massive amount of money for retirement. What pleases me more than anything else is the letters I get from people who say that they read an earlier edition of the book, did exactly what I said, and they find now, much to their amazement, they have a comfortable retirement.

Your advice is that everybody should put their money in index funds. But you like to play the market a little bit. Could tell us one or two stocks that you like right now?

I enjoy gambling, and I enjoy buying individual stocks. But I can do it because my 401(k) plan is completely invested in index funds. So if you’ve got enough for a comfortable retirement all saved in index funds and you want to have fun and buy individual stocks, by all means, go and do it. I will not answer the question because I don’t think I do any better than average with the stock picks that I have. I do it because it’s fun.

Stocks closed higher Monday ahead of a busy week on Wall Street. 

A bare economic calendar allowed traders to turn their attention to tomorrow morning's inflation update, with the Labor Department set to unveil the next CPI report report ahead of the opening bell. And while today's buying was fairly broad-based, several Big Tech stocks enjoyed an outsized lift on reports that Facebook parent Meta Platforms (META) is planning to pass out more pink slips. 

"All eyes are laser-focused on Tuesday's CPI report to gauge the market's likely flight course for the balance of Q1 and beyond," says Greg Bassuk, CEO at asset management firm AXS Investments. "Tuesday's CPI report, if fierier than expected, could jolt investors and the equity markets, which have been on a growth tear in 2023, sparked by hopes of declining inflation and a more dovish Fed policy on interest rates. A reverse course from the recent months of disinflation would reignite investor concerns that high inflation and Fed rate hikes will define the markets in 2023 as they did last year."

As for tomorrow's report, economists surveyed by Dow Jones expect headline inflation to increase 0.4% on a monthly basis, and by 6.2% year-over-year.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

In single-stock news, Meta shares jumped 3.0% after the Financial Times said the company has delayed putting together some team budgets because it's planning another round of layoffs next month. This next batch of potential pink slips – which would add to the 11,000 issued in November – are part of CEO Mark Zuckerberg's call to make 2023 Meta's "Year of Efficiency." 

The outsized gain in Meta stock helped the broader technology (+1.8%) and communication services (+1.5%) sectors outperform today, as well. As for the broader indexes, the Nasdaq Composite jumped 1.5% to 11,891, the S&P 500 rose 1.2% to 4,137, and the Dow Jones Industrial Average gained 1.1% to 34,245.

The best growth stocks to buy

Today's strong showing by the Nasdaq highlights the rising appetite for riskier stocks that investors have shown so far in 2023. The tech-heavy index is up 13.6% for the year-to-date, compared to a 7.8% gain for the broader S&P 500 and a 3.3% return for the blue-chip Dow. 

Part of this is likely due to signs that the economic slowdown many are anticipating might not be as bad as initially expected. Indeed, the January jobs report came in surprisingly strong, while the Q4 GDP reading showed the U.S. economy grew at a faster-than-expected pace in the final quarter of 2022. "A soft landing is quickly replacing the 2023 recession forecast as the base case scenario," says Steven Ricchiuto, U.S. chief economist at Mizuho Securities. "This more constructive macro outlook and the general belief the Fed is searching for any excuse to reverse the direction of monetary policy has helped promote the 'risk on' trade that has dominated since the beginning of the year." 

This is certainly good news for investors seeking out the best growth stocks, including the top AI stocks and best tech stocks to buy. And given the sharp declines these stocks succumbed to last year, many can still be bought at bargain valuations.

 It was a choppy day for trading as stocks struggled for direction following two straight down days. 

Investors are jittery ahead of next week's release of the January consumer price index (CPI), particularly after last Friday's shockingly strong jobs report and an unexpected upward revision to the December CPI. A round of disappointing earnings weighed on investor sentiment, too, though a solid day for energy stocks kept the S&P 500 and Dow Jones Industrial Average above water. 

The January CPI will be released before next Tuesday's open. Ahead of this, the Labor Department today revised data to show that consumer prices actually rose in December, versus declining as initially reported. "This morning's revision in the updated version of the estimated CPI index for December shows prices rose rather than declined and is adding to angst among investors who are struggling with a hawkish Fed that appears to have minimal tolerance for inflation," says José Torres, senior economist at Interactive Brokers.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

On the earnings front, shares of Lyft (LYFT) plunged 36.4% after earnings. While the ride-hailing firm beat on the top line, its Q4 loss was wider than expected. LYFT also gave weaker-than-expected first-quarter revenue guidance, and said it expects EBITDA (earnings before interest, taxes, depreciation and amortization) to arrive between $5 million and $15 million – well below Wall Street's estimate for EBITDA of $33.4 million. 

"In 22 years on the Street as a tech analyst we have listened to 1,000's of conference calls with many highs and lows," says Wedbush analyst Dan Ives, who downgraded LYFT stock to Outperform from Neutral, the equivalents of Buy and Hold, respectively. "Last night's Lyft call was a Top 3 worst call we have ever heard as in our opinion as management is trying to play darts blindfolded with the expense structure going forward and gave an EBITDA outlook which was a debacle for the ages."

At the close, the Nasdaq Composite was down 0.6% at 11,718. Meanwhile, the S&P 500 ended up 0.2% at 4,090, and the Dow rose 0.5% to 33,869, as Chevron (CVX) gained 2.1%. Lifting the blue-chip energy stock and its sector peers was a 2.1% gain in U.S. crude futures to $79.72 per barrel amid reports Russia is cutting crude output by about 500,000 barrels per day next month.

Why bulls should root for the Philadelphia Eagles

History suggests market participants should root for the Philadelphia Eagles to beat the Kansas City Chiefs in this Sunday's Super Bowl LVII. "While not statistically significant, sometimes superstitious investors want to ride the wave of interesting historical trends," says Larry Adam, chief investment officer at Raymond James. "So, if you have not decided which team to root for, history suggests that the best equity market performance has occurred when Philadelphia's conference (NFC) defeats Kansas City's (AFC)." 

And investors will want a high-scoring game, says Adam. Specifically, since 1967, Super Bowls where teams have scored at least 45 cumulative points have resulted in an average stock market gain of 12.6% in the 12 months following the game. 

Now, it should go without saying that indicators such as these are for fun, and should not be used to make investing decisions. "Unquestionably, our positive outlook for the U.S. equity market is based on healthy fundamentals," Adam says. In other words, focus on the best dividend stocks, the top recession-proof stocks and stocks with the highest dividend yields in the S&P 500 to make sure your portfolio has staying power.

Selling on Wall Street resumed Wednesday, with the major benchmarks spending the entirety of the session in negative territory. 

In focus today were speeches from several Federal Reserve officials – especially following Fed Chair Jerome Powell's message yesterday that indicated the central bank's fight against inflation is far from over. The latest batch of earnings reports also moved stocks. These included well-received results for ride-sharing firm Uber Technologies (UBER) and pharmacy chain CVS Health (CVS). 

The most talked about Fed comments today came from New York Fed President John Williams. In an interview with the Wall Street Journal, Williams said that the Fed still has its work cut out for it, and that the central bank will likely have to maintain a "sufficiently restrictive stance on policy" for a few years in order to bring inflation down to its 2% target. 

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

"U.S. stocks declined after [New York Fed President] Williams did the pushback that everyone was expecting Fed Chair Powell to do," says Edward Moya, senior market strategist at currency data provider OANDA. "Williams quickly sank risk appetite after he reminded Wall Street that if financial conditions loosen, higher rates may be needed." 

On the earnings front, Uber stock jumped 5.5% after the company said fourth-quarter revenue surged 49% year-over-year to $8.6 billion, while adjusted earnings rose to $665 million from $86 million in the year-ago period. Gross bookings were also up, jumping 19% to $30.7 billion.

Meanwhile, CVS reported fourth-quarter earnings of $1.99 per share on $83.8 billion in revenue. Both figures were higher on a year-over-year basis and came in above consensus estimates. The real news for CVS, though, was that it agreed to buy Oak Street Health (OSH, +4.6%) – an operator of primary care centers across the U.S. – for $10.6 billion, including debt. CVS stock rose 3.5% on the day.

As for the major indexes, the Dow Jones Industrial Average fell 0.6% to 33,949, the S&P 500 shed 1.1% to 4,117, and the Nasdaq Composite declined 1.7% to 11,910.

The Best Tech Stocks to Buy

Today's underperformance by the Nasdaq marks a change of pace to what we've seen for most of 2023. Year-to-date, the tech-heavy index is up 13.8%, compared to a 7.3% gain for the S&P 500 and a 2.4% return for the Dow. This follows an absolutely terrible 2022 for the tech sector, which "fell victim to the Federal Reserve's (Fed) campaign to quell inflation by aggressively raising rates," says Quincy Krosby, chief global strategist for LPL Financial. 

And even "as the Fed continues to make clear that its job isn't finished, tech stocks nonetheless continue to lead market rallies," Krosby adds. Part of this, she says, is the robust cost-cutting measures technology companies have taken in recent months, including layoffs. But investors are also looking for innovation from these firms, the kind that propels them into our everyday lives. The strategist points to artificial intelligence (AI) as one potential catalyst "that helps drive the sector into its next phase," which makes these top AI stocks worth a closer look. For investors looking for even more opportunities, here are the best tech stocks to buy now. Many names featured on this list are focused on secular megatrends that could continue to power growth for years to come, including AI, cloud computing and cybersecurity.   

Stocks opened lower Monday and stayed that way through the close. Amid a bare economic calendar and just a smattering of earnings reports released ahead of the open, attention was focused on last Friday's stunning jobs report – and what it could potentially mean for the Federal Reserve's rate-hike plans going forward. 

The January jobs report came in much higher than expected and the unemployment rate fell to its lowest point since 1969. This sparked concern that the Fed will have to continue raising interest rates to stamp out inflation. 

"While there were some promising aspects of the jobs report – cooling wage growth and higher participation – it's impossible to ignore the fact that the labor market remains red hot," says Craig Erlam, senior market analyst at currency data provider OANDA. "Of course, no one will be surprised if we see huge revisions next month – we've seen some substantial ones recently after all – but for now, it's hard to argue that the easier policy move for the Fed is to keep hiking in 25 basis point increments."

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Wall Street could get some hints tomorrow as to what the central bank plans to do next, with Fed Chair Jerome Powell slated to participate in a moderated discussion at the Economic Club of Washington D.C.

In single-stock news, Dell Technologies (DELL, -3.0%) said it's laying off roughly 5% of its global workforce, equating to around 6,600 jobs, as "market conditions continue to erode," said Jeff Clarke, the PC maker's co-chief operating officer, in a note to employees. Meanwhile, Tyson Foods (TSN) fell 4.6% after the meat processor reported fiscal first-quarter earnings of 85 cents per share on $13.3 billion in sales, missing consensus estimates. 

As for the major benchmarks, the Dow Jones Industrial Average slipped 0.1% to 33,891, the S&P 500 gave back 0.6% to 4,111, and the Nasdaq Composite finished 1.0% lower at 11,887.

The Best Gold ETFs to Buy

Gold gained ground today, rising nearly 0.2% to $1,879.50 an ounce. After trending lower for most of 2022, the precious metal has been on quite a run in recent months, up about 15% since early November. 

"The recovery in gold has primarily been fueled by a weakening dollar and fading market expectations for a further prolonged Federal Reserve (Fed) rate hike cycle due to receding inflation pressures in the U.S.," says Adam Turnquist, chief technical strategist at LPL Financial. "Rising demand from foreign central banks, including the People's Bank of China (PBOC), has provided an additional tailwind for gold." 

Although gold's rally has pushed the price of the precious metal into overbought territory – a move that sparked some profit-taking last week – Turnquist believes there could be more upside ahead. Continued gains would benefit gold stocks, and gold ETFs would also reap rewards.

A busy week on Wall Street ended with wild swings for stocks as investors took in a mixed bag of Big Tech earnings and a shockingly strong monthly jobs report. After bouncing between positive and negative territory throughout the day, the major benchmarks ultimately ended Friday on a down note. 

The shakiness started last night after Apple (AAPL, +2.4%), Amazon.com (AMZN) and Alphabet (GOOGL, +2.8%) reported earnings. All three tech giants fell short of bottom-line estimates in their quarterly results, while Apple and Alphabet also missed on the top line. Despite its Q4 revenue beat, though, Amazon stock tumbled 8.4% – the worst return of the day for the group – as growth in its Amazon Web Services cloud segment slowed. "One common theme among the tech giants was growing concern about consumer weakness and challenging economic conditions," says José Torres, senior economist at Interactive Brokers.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

This morning's January jobs report only added to investor uncertainty. The Labor Department said the U.S. economy added a jaw-dropping 517,000 jobs last month, well above economists expectations for 189,000 new jobs. Additionally, the unemployment rate declined to 3.4% from 3.5% in December – its lowest level since 1969. Today's data complicates the Fed's efforts to bring down inflation by aggressively hiking interest rates.

"The disinflation process may have begun, but a strong labor market may prove troubling for bets for inflation to continue to drop quickly," says Edward Moya, senior market strategist at currency data provider OANDA. "Investors expecting that the Fed will cut rates at the end of the year might be in for a rude awakening. We won't see linear moves with inflation trends and that should make it unlikely for inflation to be at low enough levels to justify rate cuts."

After falling at the open in reaction to tech earnings and the jobs report, the major benchmarks found their way into positive territory by late morning. But by the close, the indexes had swung back into negative territory, with the Dow Jones Industrial Average ending down 0.4% at 33,926, the S&P 500 off 1.0% at 4,136, and the Nasdaq Composite 1.6% lower at 12,006. 

The Best Utility Stocks to Buy

We often talk about the importance of dividend-paying stocks as a means of not only providing additional income for investors, but also creating a ballast for portfolios against a volatile market. 

One sector known for having these defensive qualities is utilities. Case in point: The utility sector is down around 2% on a year-over-year basis, compared to a nearly 10% decline for the broad market. Plus, the utility sector – which is known for having some of the best dividend stocks – currently sports an attractive 3% yield, almost double that of the S&P 500.

And the best utility stocks tend to be more stable than companies in other sectors, as well as have reliable revenue streams that often support healthy and consistent dividends over the long term.

It looks as though the days of Netflix password sharing are numbered, as the streaming giant has apparently had enough of people splitting their accounts with friends and family that don’t live in their households. Netflix has indicated it will soon introduce a new system that will block certain types of password sharing in order to protect its bottom line, perhaps even monitoring your home Wi-Fi network usage. 

The streaming giant appears well aware the new password regime will be unpopular with many users, but it's determined to follow through anyway. So when will this shift happen, and what can you do if you're among the 100 million affected users?

Netflix password sharing: Why the crackdown?

Netflix has always disliked password sharing from a revenue perspective — they’d much rather have every user pay them for an individual account. According to the Wall Street Journal (WSJ), Netflix identified password sharing as a major revenue sink as far back as 2019, but company leadership was concerned about possible user backlash to any changes. 

The issue of password sharing sat on the back burner until early 2022, when Netflix suddenly faced stronger streaming competition (from the likes of Disney Plus and Amazon's Prime Video), hefty content creation expenses, and, the real kicker, dropping almost a million subscribers post-pandemic. 

So, along with innovations like introducing a new subscription plan with ads,  Netflix felt it had no choice but to claw back some much-needed revenue by cracking down on password sharing across all global markets. Since March 2022, the company has since rolled out several tests of its new “Paid Sharing” feature in several markets outside the United States, according to CBS News. Reports from these countries suggest a slow ramping up effort to deter password sharing —relying on technology and user conscientiousness to nudge chronic password-sharers into paying for the service. 

In a January 19, 2023 letter to shareholders, Netflix backed up its Paid Sharing rollout with the explanation that “today’s widespread account sharing (100M+ households) undermines our long-term ability to invest in and improve Netflix, as well as build our business.” 

WSJ reported that there are about 30 million password sharers in the U.S. and Canada, representing $721 million in additional revenue for Netflix from those markets alone under the new Paid Sharing regime. 

When will the password crackdown happen?

In its January 2023 shareholder letter, Netflix explained that Paid Sharing will roll out in its remaining global markets “later in Q1” — which meant at the time these password sharing changes would kick in for affected U.S. users by the end of March 2023. 

However, on May 18, TechRadar reported that Netflix had kicked the can to the end of June 2023 for full implementation, ostensibly to better soften the ground for the Paid Sharing rollout. The Financial Times recently reported that Netflix has been discreetly warning its internet provider partners in the UK that they should "expect angry calls and support questions." So the streaming giant is aware of the coming subscriber backlash - and they're ready to plow through it nonetheless.

And earlier today, Netflix posted on its official blog that it had begun emailing all U.S. subscribers sharing Netflix outside their household in the United States with the following message:

"Your Netflix account is for you and the people you live with - your household...If you want to share Netflix with someone outside your household, you can transfer a profile to a new membership that they pay for, or share your Netflix account with someone who doesn't live with you for $7.99/month more."

Netflix rolled out several related changes on February 8th in Canada, as well as Portugal, Spain and New Zealand. Going forward, passwords and accounts will be for one household and one primary location. You can still share passwords, but only with up to two people you don’t live with, at the cost of the equivalent of U.S. $5.88 extra per person.

Subscriber numbers from the Canadian market show that the password crackdown may be having a significant effect on user signups. Bank of America securities analyst  Jessica Reif Ehrlich expects Netflix's first quarter Canadian subscriber numbers to soundly beat expectations of 100,00, based on surprising third party data, according to MarketWatch. Ehrlich predicts "a greater number of subs and revenue as primary account holders or those sharing accounts become full subscribers." 

Shorter version: The password crackdown is good for shareholders, but not so good for account holders. 

What Netflix users can expect

Netflix FAQs state that the company will use "IP addresses, device IDs, and account activity from devices signed into the Netflix account" to determine which devices are in the same household. It also says “People who do not live in your household will need to use their own account to watch Netflix,” but that “Netflix will not automatically charge you if you share your account with someone who doesn’t live with you.”

If you’re the account holder lending out your password, you won’t get a bill or have your programming disrupted. But if you’re the one free riding on the account, Netflix will first use various technical signposts to determine if you actually live in the house. The page's FAQ page lists the following process for regularly verifying users logged in outside the account's home address: 

"To verify a device:

1. Netflix sends a link to the email address or phone number associated with the primary account owner.
2. The link opens a page with a 4-digit verification code.
3. The code needs to be entered on the device that requested it within 15 minutes.
   • If the code expired, you will need to request a new verification code from the device.
4. Once successful, that device can be used to watch Netflix.
5. Device verification may be required periodically."

If the platform determines that you don’t live there, by the end of June 2023 you’ll likely be blocked from signing into the shared account. That is until you or the account holder pay a small fee to keep sharing.

Be ready for confusion and technical glitches, too. Global tech site Rest of World reported that Netflix’s 2022 Paid Sharing test in Peru was a big mess. Many Peruvian users were able to avoid the extra charges, while others were prompted to pay more and responded by canceling their accounts.

On January 31st, 2023, Netflix updated its FAQ page with new details on the password sharing crackdown:

"Who can use a Netflix account: Anyone in your household (those who live with you at your primary location) can use your Netflix account. To ensure that your devices are associated with your primary location, connect to the Wi-Fi at your primary location, open the Netflix app or website, and watch something at least once every 31 days."

This suggestion of having to return to a home Wi-Fi network once a month to simply continue to use Netflix prompted anger from people who travel for work, college students living away from home, people with multiple homes. Netflix has since removed the update from the FAQ page. A company spokesperson told The Streamable that the latest update was a mistake and that the aforementioned Wi-Fi network policy only applies to the Chile, Costa Rica, and Peru markets.

Still, it's hard to ignore the writing on the wall.

What affected Netflix users can do

The 100 million password borrowers users worldwide (and 30 million in North America) who suddenly find themselves blocked from their favorite Netflix shows have a few options: 

• Buy an extra member slot for each out of household user for $7.99 per month. 
• Get your own Netflix account, starting with the “Basic with ads” plan for just $6.99 per month.
• Switch to a competing streaming service that doesn’t look over your shoulder... Yet. Disney Plus offers reasonable monthly packages and doesn’t crack down on password sharing - yet. Ditto Amazon Prime Video, which is probably the best streaming deal on the market, at the cost of free with Amazon Prime.

Related Content

• Massive LastPass Hack Affects 30 Million Users. Is Your Data at Risk?
• Google Racks Up $600M in Privacy Settlements Across U.S.
• T-Mobile Data Breach: You Could Claim Up to $25K — But You'll Need to Do it Soon
• 7 Alternatives to Netflix
• Drowning in streaming Fees?

Stocks closed lower Monday as caution set in ahead of a busy week on Wall Street. 

In addition to a jam-packed earnings calendar that features trillion-dollar tech titans Apple (AAPL) and Alphabet (GOOGL), there's a full economic docket too – one that includes a Fed meeting and the monthly jobs report. 

"This week's big tech earnings will enable investors to learn whether or not the economy is slowing and investors will see which companies are strong enough to weather the potential for tough times, and which companies will struggle," says David Trainer, CEO of investment research firm New Constructs. "We expect the stock market to be more discerning as it awards the stronger companies with more value, while sending the stocks of weaker companies lower, a dynamic that sounds simple, but didn't occur in 2020 and 2021."

Ahead of this busy batch of tech earnings, the Nasdaq Composite underperformed today, shedding 2.0% to 11,393. The S&P 500 gave back 1.3% to 4,017, and the Dow Jones Industrial Average fell 0.8% to 33,717.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Investors are also keeping a close eye on this week's gathering of Federal Reserve officials. For those who have been wondering, "when is the next Fed meeting," the answer to that question is tomorrow, though the policy announcement is not due until Wednesday afternoon. 

Wall Street expects the Federal Open Market Committee (FOMC) to hike its benchmark interest rate by 25 basis points (0.25%). The tone of this meeting will likely be similar to the December one, says Jonathan Pingle, economist at UBS Global Research: "A smaller rate hike as the terminal rate nears, a Fed more confident inflation is peaking, but also an FOMC that thinks it is too soon to signal a stop."

Meanwhile, Pingle anticipates "a very solid gain" in the January jobs report, which will be released Friday morning. And this, he adds, "should keep more rate hikes in play." 

The Best AI Stocks to Buy

Today's price action from tech stocks marks a change of pace to what has so far been a hot stretch for the beaten-down sector. "The script has been flipped in 2023," say Adam Turnquist, chief technical strategist, and Jeffrey Buchbinder, chief equity strategist at LPL Financial. "Last year's underperformers have turned into outperformers this year, driving the S&P 500 Index up [roughly] 5% this month." And the Nasdaq is up nearly 9% after plunging more than 33% in 2022. 

Turnquist and Buchbinder add that several seasonality indicators – including the Santa Claus rally and the fact that we're in the third year of a presidential cycle, which tends to be bullish for stocks – "suggest the path of least resistance for the broader market is likely higher for the year." The longer-term selloff in tech certainly creates opportunities for investors to scoop up some of the best growth stocks at a bargain. Artificial intelligence (AI) companies, in particular, are poised for impressive growth over the next decade – and that should mean great things for Wall Street's best AI stocks. 

A choppy start for stocks on Thursday led to a solid finish as investors mulled over the latest batch of quarterly earnings and economic reports. 

Tesla (TSLA) headlined a busy earnings calendar – and Wall Street cheered the electric vehicle maker's fourth-quarter results. Meanwhile, the latest gross domestic product (GDP) reading showed the U.S. economy grew at a faster-than-expected pace in the final three months of 2022, even as interest rates increased and inflation remained stubbornly high. 

Tesla released its Q4 results late Wednesday, sending shares up 11% today. The company reported earnings of $1.19 per share on $24.3 billion in revenue – both record figures for TSLA. Consensus estimates were for earnings of $1.13 per share on $24.7 billion in sales. The carmaker also said it plans to "grow production as quickly as possible" in order to meet its target of 50% average annual growth.

As for today's economic data, the Bureau of Economic Analysis said this morning that GDP grew at an annual rate of 2.9% in the fourth quarter, a quicker pace than what was seen in the third quarter. However, consumer spending slowed, rising 2.1% in Q4 vs. 2.3% in Q3.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Wall Street's top minds were quick to chime in on the GDP, including Carol Schleif, chief investment officer at BMO Family office. "Thursday's GDP report suggests that the economy is relatively strong even in the face of aggressive measures by the Federal Reserve to calm inflation," Schleif says. "Businesses and consumers are moderating their spending after the initial exuberant post-pandemic surge and we expect this slowing of momentum to allow the economy to tick along solidly but on a slower and more sustainable path."

At the close, the Nasdaq Composite was up 1.8% at 11,512, the S&P 500 was 1.1% higher at 4,060, and the Dow Jones Industrial Average had gained 0.6% to 33,949.

Chevron Unveils $75 Billion Buyback Program

Chevron (CVX) was one of the best Dow Jones stocks today – second only to Salesforce (CRM, +5.7%) – climbing 4.8% after the energy giant unveiled a massive share repurchase program. Specifically, CVX said its board of directors approved $75 billion in stock buybacks, with the program set to go into effect on April 1. The oil giant – well-known as being one of the best dividend stocks on Wall Street – also hiked its quarterly payout by 6% to $1.51 per share. 

CVX's announcement and subsequent share-price move made energy the best-performing sector today (+3.2%), but this is just more of the same. Year-to-date, the energy sector is up more than 6%, building on 2022's impressive gains.

And there are plenty of potentially positive catalysts for oil stocks over the next few months, which could keep the wind at their back. These include China's reopening, the Biden administration ending the release of strategic petroleum reserves, and rising demand in the spring and summer months, says Louis Navellier, chairman and founder of Navellier & Associates. Continued gains could certainly benefit the best energy stocks, while energy ETFs would also reap the rewards.

Stocks ended the week on a high note. And while the buying was widespread on Friday, tech stocks were the clear winner as investors cheered impressive subscriber growth from streaming giant Netflix (NFLX) and news that Google parent Alphabet (GOOGL) is undergoing its biggest round of layoffs ever. 

Last night, Netflix reported fourth-quarter earnings of 12 cents per share, much lower than the 45 cents per share analysts were expecting, due to forex headwinds. Revenue of $7.85 billion matched the consensus estimate. But the real number investors were looking for was the subscriber growth, and Netflix blew that out of the water. Specifically, the company added 7.66 million paid subscribers over the three-month period – a time frame that included the launch of a lower-price, ad-supported tier. This compared to Wall Street's expectation for 4.57 million additions. Netflix also said founder Reed Hastings will step down as co-CEO, and will be replaced by Chief Operating Officer Greg Peters. The stock rose 8.5% as a result.

"Netflix has had a show-stopping end to the year, in a performance even its worst critics can't argue with," says Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. "While Wall Street sags with the weight of recession fear and Federal Reserve jitters, Netflix's huge beat on subscriber numbers has injected some much-needed optimism into the mix." 

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Elsewhere in the tech space, Alphabet said it is cutting roughly 12,000 positions, which works out to be about 6% of its global workforce, sending its shares up 5.3%. "Over the past two years we've seen periods of dramatic growth," Sundar Pichai, CEO of Alphabet, wrote in a memo to employees. "To match and fuel that growth, we hired for a different economic reality than the one we face today." This follows similar layoff announcements from several big tech companies in recent months, most notably Amazon.com (AMZN), Meta Platforms (META) and Microsoft (MSFT).

Big gains for Netflix and Alphabet stocks helped the tech-heavy Nasdaq Composite outperform today (+2.7% at 11,140), though the broader S&P 500 (+1.9% at 3,972) and the blue-chip Dow Jones Industrial Average (+1.0% at 33,375) still notched robust gains. 

3 Hot Earnings Reports to Watch

So what's in store for next week? Lots of chatter around what the Federal Reserve may or may not do at its upcoming two-day policy meeting, set to kick off on Tuesday, Jan. 31. Ahead of this, Wall Street will get more data on how the economy is holding up amid the central bank's efforts to tame inflation through aggressive interest-rate hikes, with the first reading on fourth-quarter gross domestic product (GDP) due out on Thursday. Additionally, December's personal consumption expenditures (PCE) index – the Fed's preferred measure of inflation that tracks consumer spending – will be released Friday. 

And throughout the week, investors will sift through a jam-packed earnings calendar. Among the notable names set to report quarterly earnings are Dow Jones stocks Microsoft and Visa (V). Electric vehicle maker Tesla (TSLA) is also on the docket. Despite a dismal end of the year for Tesla stock, analysts still expect solid growth in the company's Q4 financial results. 

Stocks started Wednesday trading higher thanks to another encouraging reading on inflation. 

However, the major benchmarks couldn't sustain this early lead as dismal retail sales data stoked recession concerns and a Federal Reserve official threw support behind more interest-rate hikes. 

Starting with the good news: The Labor Department this morning said its producer price index – which measures how much suppliers are charging businesses for goods – was up 6.2% year-over-year in December. This was down from November's 7.2% rise and was the lowest annual increase since March 2021. Core CPI, which excludes volatile energy and food prices, increased 4.6%, a slower pace of growth than what was seen in November. Month-over-month, headline PPI fell 0.5%, while core PPI rose 0.1%.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Today's PPI echoes what was seen in last week's consumer price index – that inflation is indeed easing as a result of the Federal Reserve's aggressive interest-rate hiking campaign. However, inflation is cooling because the Fed's rate hikes are slowing the economy. And this was seen in today's retail sales report. Specifically, the Commerce Department said retail sales were down 1.1% from November to December, marking a second consecutive monthly decline.

And while today's economic reports might have led investors to believe the Fed could ease up on the scale of future rate hikes, St. Louis Fed President James Bullard said earlier at a Wall Street Journal event that he expects the benchmark rate to reach 5.25% to 5.5% by the end of 2023. This compares to the current rate of 4.25% to 4.5%, and is above market expectations for the benchmark rate to reach no higher than 5.0%, according to CME Group. 

At the close, the Dow Jones Industrial Average was down 1.8% at 33,296, the S&P 500 was off 1.6% at 3,928, and the Nasdaq Composite was 1.2% lower at 10,957.

The Best Commodity ETFs to Buy

Today's inflation update "represents another data point supporting the likelihood that producer prices have peaked from their apex last March at 11.7%, and are on their way down," says Greg Bassuk, CEO at asset management firm AXS Investments. "This is very good news for both Wall Street and Main Street, including because trends in producer prices typically seep down to consumers." 

Still, inflation remains well above the Fed's 2% target, and "investors would be prudent to remain invested in inflation-sensitive assets," Bassuk adds. These assets include those found in cyclical sectors, like energy stocks and financials. They also include commodities, which have historically proven resilient amid rising prices. While the idea of engaging directly with commodity markets can be intimidating for some, the best commodity ETFs allow investors an easy way to gain exposure to the diverse asset class.

Stocks initially struggled for direction Thursday following the release of the December Consumer Price Index (CPI). However, once investors decided they liked what they saw, the major market indexes shot higher. 

The Labor Department this morning said that the CPI was up 6.5% year-over-year in December, as prices rose at their slowest pace in six months. Core CPI, which excludes volatile energy and food prices, increased 5.7% on an annual basis, the lowest reading since December 2021. 

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Wall Street's top minds were quick to weigh in after the release of the December inflation report, including Anthony Denier, CEO of Webull, a commission-free trading platform. "All the CPI numbers came in exactly as expected," Denier says. "While the CPI didn't overdeliver, it's moving in the right direction, and we hope the trend down continues. While this is a good trend, it won't stop the Fed from continuing to raise rates." 

Still, in the wake of today's inflation update, market expectations for the Federal Reserve to deliver a 25 basis point (0.25%) interest rate hike at its February meeting jumped to 95.2% from yesterday's 76.7%, according to CME Group. This would mark the lowest increase in the Fed's benchmark rate since March 2022. (The central bank issued four consecutive 0.75% rate hikes, followed by a 0.5% increase at its last meeting in December.)

Today's data were generally well-received on Wall Street, with the major benchmarks finishing the day with solid gains. The Dow Jones Industrial Average added 0.6% to 34,189 and the S&P 500 rose 0.3% to 3,983. Meanwhile, the Nasdaq Composite closed up 0.6% at 11,001, bringing its daily win streak to five. 

The Best Stocks for Level-Headed Investors

The "key" part of today's inflation report is that the Fed's interest rate hikes worked, says Wes Gottesman, market advisor at TradeZing. "However, whenever the Fed discusses increasing the rates, market volatility ensues." And with the central bank likely to keep raising rates, at least through its next two meetings, "we will expect to see further volatility," he adds. 

As such, investors should remain level-headed in 2023, Gottesman says. This can include exploring the best dividend stocks, which can help offset unexpected market declines with steady and reliable income. Low-volatility stocks and low-volatility ETFs will also add doses of defense to your portfolio.

Stocks shot higher Friday as investors cheered the latest jobs report. Although data from the Labor Department showed that hiring remains strong, a lower-than-expected rise in wages suggests that the Federal Reserve's efforts to cool inflation with aggressive interest-rate hikes is working. This was the kind of silver lining that Wall Street has been looking for – and the stock market responded in kind. 

Looking closer at the numbers from the December jobs report shows the U.S. added 223,000 jobs last month. Although this was the smallest gain in two years, it was well above what most economists were expecting. Additionally, the unemployment rate fell to 3.5% from 3.7%. 

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

At first glance, December's strong job creation wasn't very encouraging. After all, the Fed is intent on slowing the economy in order to tame fast-rising prices. What gave investors hope, however, were the wage growth figures. Specifically, average hourly earnings – a key measure of inflation tracked by the Fed – rose 0.3% month-over-month and 4.6% year-over-year. Both figures were lower than economists' average estimates, as well as the pace of wage growth seen in the November jobs report. 

"This absolute level is still too high for Chairman Powell, who has remarked that wages are running too hot to be consistent with the Fed's 2% inflation mandate," says Daniel Berkowitz, senior investment officer for Prudent Management Associates. "With that said, the data is clearly moving in the right direction. All in all, today's jobs numbers offered a Goldilocks scenario, not too hot, not too cold – and on the heels of a 'just right' report, stocks are rallying."

Indeed, the Dow Jones Industrial Average jumped 2.1% to 33,630, the S&P 500 gained 2.3% to 3,895, and the Nasdaq Composite added 2.6% to 10,569. 

Top Inflation Hedges

Today's wage growth data provided another encouraging read on inflation. But the really big update will come next Thursday morning with the release of the December consumer price index (CPI).  

The past two CPI reports showed that consumer price growth moderated in October and November, and expectations are for it to have slowed further in December. That said, inflation remains high – and well above the Fed's target. Douglas Porter, chief economist at BMO Capital Markets, continues "to believe that underlying inflation will remain stickier than expected, even with this week's admittedly encouraging developments on a number of fronts." 

With this in mind, investors would do well to continue including inflation hedges in their portfolios. As we've mentioned several times in this space, these hedges against rising prices can include healthcare and consumer staples stocks, which provide goods and services that people tend to buy no matter what. The best inflation-beating stocks are also certainly worth a closer look. 

There was plenty for investors to consider Thursday, including a pair of updates on the labor market and speculation of a potential bankruptcy for one of Wall Street's most embattled retailers. Market participants were clear that they didn't like any of what they were seeing, sending stocks lower once again. 

Ahead of today's opening bell, the Labor Department said that weekly jobless claims fell by 19,000 to 204,000 in the final week of 2022, more than economists were expecting. Continuing claims also edged lower, down 24,000 to 1.7 million.

Additionally, a report released by ADP showed the private sector added 235,000 jobs in December. Not only was this more than the 182,000 private payrolls created in November, but it outpaced economists' consensus estimate for 153,000 new jobs.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Both data points underscore an extremely tight labor market – a sticking point for the Federal Reserve in its fight against inflation. Complicating matters, the numbers come ahead of tomorrow's highly anticipated December jobs report (more on this below).

The jobs data followed layoff announcements from several large corporations. Among the most recent to unveil cuts were Amazon.com (AMZN, -2.4%), which announced the passing out of 18,000 pink slips, and Stitch Fix (SFIX, +9.4%), which pledged to reduce salaried headcount by 20%. 

In other single stock news, Bed Bath & Beyond (BBBY) spiraled 29.9% after the home goods retailer fueled bankruptcy speculation following a business update. BBBY said it expects to report a net loss of $385.8 million in its fiscal third quarter and anticipates a year-over-year drop in sales due to "lower customer traffic and reduced levels of inventory availability." Additionally, Bed Bath & Beyond said it has "substantial doubt" about its ability to continue as a going concern, given "recurring losses and negative cash flow from operations." The firm is exploring strategic alternatives, including selling assets or filing for bankruptcy.

As for the major market indexes, the Dow Jones Industrial Average shed 1.0% to 32,930, the S&P 500 gave back 1.2% to 3,808, and the Nasdaq Composite fell 1.5% to 10,305.

The Best Dow Dividend Stocks

Trepidation around tomorrow's jobs report is building, especially in wake of today's economic reports and Wednesday's Fed minutes in which the central bank reiterated support for a "restrictive policy stance" in order to bring down inflation.

"As we wait for tomorrow's jobs report, there is a lot of angst in the air," says Brad McMillan, chief investment officer for Commonwealth Financial Network. "One of the most predicted recessions in history is very likely to hit this year. The manufacturing business sentiment survey yesterday was down, seemingly confirming that outcome. The Fed is looking to substantially weaken the labor market, in search of lower inflation, and according to the meeting notes released yesterday, is going to keep raising rates until that happens." 

And while all signs suggest that the labor market will weaken significantly, little to no movement on that front was likely made in December. The consensus estimate, McMillan adds, is for the economy to have added 200,000 jobs last month, modestly lower than what we've seen in recent months, but still strong growth. 

This keeps the potential for volatility high – but also serves as a lesson for market participants that investing is a marathon, not a sprint. In other words, stay focused on quality names that have the highest probability of riding out the storm. One place to find these companies with staying power is with the best Dow dividend stocks, a collection of blue-chip companies well-positioned to generate income and deliver outperformance in uncertain market times. 

Stocks jumped out of the gate and never looked back as investors cheered an encouraging reading on consumer confidence. Solid earnings from logistics giant FedEx (FDX) and athletic footwear and apparel retailer Nike (NKE) only added to the day's positive momentum, with both stocks surging in reaction to their quarterly results. It was the good news Wall Street was looking for, and sent the major market indexes notably higher. 

Starting with the economic data, the Conference Board said this morning that consumer confidence surged to 108.3 in December from November's reading of 101.4. This was the first increase in consumer confidence since September, and the highest reading since April. "The economy is still headed towards a recession, but the consumer continues to show signs of resilience which could delay a significant tumble for equities," says Edward Moya, senior market strategist at currency data provider OANDA.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Meanwhile, in earnings news, FedEx stock rose 3.4% after the company reported higher-than-expected fiscal second-quarter earnings and said it will cut costs by an additional $1 billion this fiscal year, bringing total savings to $3.7 billion. Additionally, Nike soared 12.3% – easily making it the best Dow Jones stock today – after the firm beat top- and bottom-line estimates and said inventories were down compared to the previous quarter.

As for the major indexes, the Dow Jones Industrial Average rose 1.6% to 33,376, the S&P 500 Index gained 1.5% to 3,878, and the Nasdaq Composite jumped 1.5% to 10,709.

Be Prepared for This Bear Market to Continue

Today's broad gains were promising, but let's not forget that the stock market remains in bear-market territory. Plus, many strategists expect the bear market to continue well into 2023. 

"The Federal Reserve remains committed to taming inflation by keeping monetary policy tight, as Jerome Powell emphasized in his press conference, which is not great news for the stock market and supports the bear market continuing into 2023," says James Demmert, chief investment officer of Main Street Research. "The Fed is trying to engineer a soft economic landing that in our view has a high likelihood of failing and causing a recession in 2023."

As a result, the major market indexes "are vulnerable at current levels," Demmert adds. 

Given this precarious market backdrop, investors would do well to focus on sectors that historically perform well in market downturns, like healthcare or consumer staples. Another option is to embrace the best bear market ETFs, or funds that cover a variety of strategies that tend to work well in uncertain times.

Investors worried that the current bear market will get worse again before turning into a bull market can find plenty of protection among exchange-traded funds (ETFs). In fact, these bear market ETFs might very well be your best bet. 

Individual stocks can carry a lot of risk, especially in a downturn. You could diversify via mutual funds, but they don't have much breadth of tactical options. But if you browse through some of the best bear market ETFs geared toward staving off downturn, you're sure to find a bounty of options that mesh well with your investing style and risk profile.

And make no mistake: Many analysts and strategists are calling for a continuation of the bear market – and more economic tumult – in 2023.

"The Federal Reserve remains committed to taming inflation by keeping monetary policy tight, as Jerome Powell emphasized in his press conference, which is not great news for the stock market and supports the bear market continuing into 2023," says James Demmert, chief investment officer of Main Street Research. "The Fed is trying to engineer a soft economic landing that in our view has a high likelihood of failing and causing a recession in 2023. … Stock indexes are vulnerable at current levels."

Thing is, no two bear markets are the same. Yes, certain sectors historically perform better than others – and we would recommend being in a couple of those sectors (more on that in a moment). But you'd be surprised; certain cyclical always seem to keep up with, or outright beat, purely defensive plays. Energy, for instance, is the best sector of this current bear market by a country mile, up 52% on a total-return basis (price plus dividends) vs. an 18% decline for the S&P 500. Communication services and technology were among the top performers in the COVID bear market. Energy and consumer discretionary stocks were among the top four sectors during the Great Recession.

In short, there's no guaranteed hedge against a bear market. If there was, everyone would invest in it. But you can learn about what options are available to you so you can make the best decision for whatever environment you face. Some ETFs tend to work well in many bear markets, while others need specific conditions to thrive.

With all that said, here are a dozen of the best bear market ETFs. These funds span a number of tactics, from low-volatility stocks to bonds to commodities and more, and most have already outperformed in the current bear market.

Data is as of July 12. Dividend yields represent the trailing 12-month yield, which is a standard measure for equity funds.

• Type: Low-volatility stock
• Assets under management: $10.5 billion
• Dividend yield: 2.1%
• Expenses: 0.25%

One of the most popular types of funds for a bear market is low-volatility ETFs. The objective is pretty straightforward: Invest in stocks with low volatility, which should limit downside during a down market.

The Invesco S&P 500 Low Volatility ETF (SPLV, $63.61) is a pretty straightforward fund that tracks the S&P 500 Low Volatility Index, which is composed of the 100 S&P 500 components with the lowest realized volatility over the past 12 months. It then assigns weights to each stock based on its volatility (well, lack thereof).

One popular way to measure volatility is called "beta," which tracks a security's volatility compared to some benchmark. The benchmark here is the S&P 500, and the benchmark will always have a beta of 1. SPLV has a beta of 0.74, which implies the fund is roughly 26% less volatile than the broader market.

This doesn't guarantee SPLV will outperform during a market shock. In fact, during the quick COVID bear market, this low-volatility ETF underperformed the S&P 500 by 2 percentage points.

But Invesco's ETF does tend to do pretty well during longer periods of tumult. Take June 2015 to June 2016, when the market's roller-coaster movement generated a marginally negative return; SPLV was up by nearly 9%. And during the current bear market, the fund has been a relative champ, down less than 5% on a total-return basis (price plus dividends) vs. the S&P 500's 18% drop.

The portfolio is bound to change over time depending on which parts of the market are more volatile than others, but for now, it's unsurprisingly heavy in utility stocks (26%) and consumer staples (22%) – two defensive, high-yielding sectors.

Top individual holdings include consumer staples giants Coca-Cola (KO) and PepsiCo (PEP), and New York utility Consolidated Edison (ED).

Learn more about SPLV at the Invesco provider site.

• Type: Low-volatility dividend stock
• Assets under management: $945.0 million
• Dividend yield: 3.1%
• Expenses: 0.27%

The Franklin Low Volatility High Dividend ETF (LVHD, $38.12) has roughly the same thrust as SPLV, but with an added focus on dividends. The ETF invests in roughly 50 to 100 stocks selected because of their lower volatility, as well as their ability to generate income.

LVHD starts with a universe of the 3,000 largest U.S. stocks, which, given a universe that large, includes mid- and small-cap stocks, too. It then screens for profitable companies that can pay "relatively high sustainable dividend yields." It then scores those best dividend stocks higher or lower based on price and earnings volatility. Every quarter, when the fund rebalances, no stock can account for more than 2.5% of the fund, and no sector can account for more than 25%, except real estate investment trusts (REITs), which are capped at 15%.

Right now, LVHD's top three sectors are the the ones many investors think of when they think of defense: utilities (23%), consumer staples (23%) and real estate (11%). They're represented by top holdings such as Duke Energy (DUK), Pfizer (PFE) and Medical Properties Trust (MPW).

This Legg Mason ETF's dual foci of income and low volatility should make it one of the best bear market ETFs – indeed, on a total-return basis, it is down by just 2%.

Just be aware that LVHD historically tends to get left behind once the bulls pick up speed.

Note: LVHD used to be the Legg Mason Low Volatility High Dividend ETF, but the name was changed in 2021 following the closing of Franklin Templeton’s acquisition of Legg Mason.

Learn more about LVHD at the Franklin Templeton provider site.

• Type: Dividend stock
• Assets under management: $12.3 billion
• Dividend yield: 3.4%
• Expenses: 0.08%

Low-volatility dividend stocks might be what the doctor ordered, but investors have done well in this bear market by holding dividend stocks period.

Consider the performance of the iShares Core High Dividend ETF (HDV, $102.41), which has generated a 6% gain in this current bear market.

This iShares ETF is an inexpensive, straightforward way to gain access to a bundle of high-yielding dividend stocks. HDV currently holds 75 stocks that have been able to sustain above-average payouts and have also passed several financial-health screens.

It's also a somewhat different portfolio than the low-volatility ETFs above. Energy stocks such as Exxon Mobil (XOM) and Chevron (CVX) make up more than a quarter of HDV's assets – and helps explain its outperformance in 2022. Healthcare stocks such as AbbVie (ABBV) and Pfizer are also a considerable weight, at 22%. Tech and staples enjoy double-digit weights as well.

In general, this is just a big batch of dividend-paying blue chips, which explains its 3.4% dividend yield – more than twice what you'd get from a vanilla S&P 500 ETF.

We will mention that the heavy oil and gas exposure, which has worked heavily in HDV's favor in 2022, could be a hindrance if there's significant relief in energy prices during 2023. Still, this remains one of the best bear market ETFs.

Learn more about HDV at the iShares provider site.

• Type: Sector (Healthcare)
• Assets under management: $17.2 billion
• Dividend yield: 1.2%
• Expenses: 0.10%

Only two sectors have put up aggregate positive returns across all bear markets since 1990, and investors should look to ETFs covering those sectors should they smell trouble in the future.

The best sector in bear markets? Healthcare stocks – a completely unsurprising fact if you've been alive long enough to pay for medicine and hospital visits over the past three decades. Consider that health expenditures between 2000 and 2020 alone have tripled, to about $4.1 trillion from $1.4 trillion, far outpacing the pace of inflation.

Those costs rise in good times and bad alike. And, to be blunt, consumers really have no choice. When the economy tanks, you can put off buying a new smartphone or remodeling your kitchen, but you can't stop filling your prescriptions and going to the doctor.

The Vanguard Health Care ETF (VHT, $246.62) is one of the least expensive ways to invest in this recession-proof sector, at just 10 basis points in annual expenses. (A basis point is one one-hundredth of a percentage point.) It's also one of the most diversified, at a massive 420 stocks.

VHT is a market cap-weighted fund, which means the larger the stock, the larger the percentage of assets are committed to holding that stock. Thus, mega- and large-cap stocks still have the biggest say on performance, at nearly 80% of the fund's weight. But you do enjoy some mid- and even small-cap exposure, meaning you can benefit from explosive smaller biotech and biopharma names that are likelier to pop on drug trials and buyouts.

Holdings include insurers such as UnitedHealth Group (UNH), Big Pharma names like Johnson & Johnson (JNJ) and Eli Lilly (LLY), and medical equipment companies like Thermo Fisher Scientific (TMO).

Learn more about VHT at the Vanguard provider site.

• Type: Sector (Consumer staples)
• Assets under management: $17.5 billion
• Dividend yield: 2.4%
• Expenses: 0.10%

The next selection on this list of best bear market ETFs covers another area you can't skimp on, regardless of whatever the economy is doing: food and basic hygiene products.

That's what consumer staples are: the staples of everyday life. Some are what you'd think (bread, milk, toilet paper, toothbrushes), but staples also can include products such as tobacco and alcohol – which people treat like needs, even if they're not.

Like utilities, consumer staples tend to have fairly predictable revenues, and they pay decent dividends. The Consumer Staples Select Sector SPDR Fund (XLP, $74.86) invests in the 30-plus consumer staples stocks of the S&P 500 – a who's who of the household brands you've grown up with and know. Like VHT, XLP is market cap-weighted, which results in huge holdings in names such as Procter & Gamble (PG, 15% weight), which makes Bounty paper towels, Charmin toilet paper and Dawn dish soap. PepsiCo and Coca-Cola are also double-digit weightings.

XLP also holds a few retail outfits, such as Costco (COST) and Walmart (WMT), where people typically go to purchase these goods.

The Consumer Staples SPDR has long been among the top ETFs to buy, from a sector standpoint, during corrections and bear markets. For instance, during 2007-09, while the S&P 500 was shedding more than 55%, the XLP only lost half as much, -28.5%. In 2015, the XLP outperformed the index 7% to 1.3%. And during this bear market, the fund has a 17-percentage-point edge over the broader market.

An above-average yield of 2.4% is partly responsible for that outperformance.

Learn more about XLP at the SPDR provider site.

• Type: Short-term bond
• Assets under management: $10.1 billion
• SEC yield: 4.5%*
• Expenses: 0.03%

In many market selloffs, investors can be found fleeing into the relative safety of bonds. Sure, bonds' all-time returns don't come close to stocks, but they're typically more stable. And in a volatile market, investors cherish knowing their money will be returned with a little interest on top.

Thing is, when the stock market is getting shelled in large part because interest rates are going up (and, conversely, bond prices are going down), bonds aren't much of a safe haven.

Bond investors have learned this the hard way in 2022, with the Agg bond index off by 10% – not much of a decline in the stock world, but a nasty spill for fixed income. But with the Fed at least signaling a slowing in rate hikes and coming closer to its "terminal rate," some bonds could spell opportunity in 2023.

"We remain cautious on longer-term U.S. Treasuries in the coming months as persistently high inflation will likely lead to further volatility as investors demand a higher-term premium," says Comerica Wealth Management. "We believe shorter- dated U.S. Treasuries, however, are closer to pricing in a peak for policy rates and offer relatively attractive income opportunities."

The Schwab Short-Term US Treasury ETF (SCHO, $48.40) is the cheapest way to invest in short-term Treasuries. At just 3 basis points, you gain access to nearly 100 different U.S. bonds with maturities of between one and three years.

Remember: Short-term bonds in general are considered safer and more stable than longer-dated bonds because the less time a bond has remaining before it matures, the likelier it will be repaid. Moreover, Treasuries are considered some of the safest debt on the planet – shorter-dated ones doubly so.

The downside is that these bonds tend not to yield as much as their longer-dated compatriots, but rising rates have resulted in some decent income from even the shortest-term of bonds. To wit, the SCHO has a whopping 4.5% SEC yield at present.

Just remember: Stability works both ways. SCHO doesn't move much, in bull and bear markets – it's off just 3% in the current bear market. This ETF is merely a place to duck for cover and earn a decent bit of interest while you wait for bluer skies.

Learn more about SCHO at the Schwab provider site.

* SEC yield reflects the interest earned for the most recent 30-day period after deducting fund expenses. SEC yield is a standard measure for bond funds.

• Type: Investment-grade bond
• Assets under management: $239.2 million
• SEC yield: 5.2%
• Expenses: 0.22%

Short-term Treasuries aren’t the only area of the bond market Comerica Wealth Management is favorable on for 2023.

"Our fixed income positioning favors quality, with investment-grade corporate bonds offering a combination of relative valuation and income," Comerica says. "The current volatility in bond yields leads us to take interest-rate risk on corporate credit over government bonds, as these securities offer quality ratings and strong balance sheets."

While there are cheaper vanilla investment-grade bond ETFs out there, the FlexShares Credit-Scored US Corporate Bond Index Fund (SKOR, $47.00) stands out for its focus on quality.

SKOR examines traits such as valuation, management efficiency, profitability and solvency when determining which issuers to target. It then has various controls, such as maximum single-security overweights and underweights, 3% issuer maximum, even a turnover constraint that keeps the fund from trading too much.

The result is a portfolio of roughly 760 investment-grade holdings, 37% of which are rated A or better. The average maturity of the portfolio is a hair over six years. And the duration is 4.2 years. (Duration is a measure of risk; SKOR's duration implies that a 1% increase in interest rates should result in a 4.2% decrease in the fund's price; a 1% decrease in rates should result in a 4.2% improvement.)

SKOR also enjoys a five-star rating from Morningstar, reflecting its excellent past performance – it's in the top 91%, 95% and 89% of category funds over the trailing one, three and five years, respectively. It also enjoys a Gold medal rating; Morningstar's medal ratings are a machine-learning statistical model that determines what the fund would receive if a Morningstar analyst covered the fund.

BlackRock writes that "investment-grade corporate bonds offer more income than the highest-paying dividend stocks [at present]," and SKOR certainly reflects that. At an SEC yield of more than 5%, you’re getting several times more income than the S&P 500 and at least 1 percentage point more annual yield than most high-yield dividend ETFs.

Learn more about SKOR at the FlexShares provider site.

• Type: Commodity (Gold)
• Assets under management: $882.5 million
• Dividend yield: N/A
• Expenses: 0.1749%

Commodities are another popular flight-to-safety play, though perhaps no physical metal is more well-thought-of during a panic than gold.

A lot of that is a fear of a horrible-case scenario: If the world's economies collapse and paper money means nothing, humans need something to use for transactions, and many believe that something will be the shiny yellow element that we used as currency for thousands of years.

Of course, at that point, your IRA will be the least of your worries.

But there is a case for gold as a hedge. It's an "uncorrelated" asset, which means it doesn't move perfectly with or against the stock market. It's also a hedge against inflation, often going up when central banks unleash easy-money policies. Because gold itself is priced in dollars, weakness in the U.S. dollar can make it worth more. So sometimes, it pays to have a small allocation to gold.

You could buy physical gold. You could find someone selling gold bars or coins. You could pay to have them delivered. You could find somewhere to store them. You could insure them. And when it's time to exit your investment, you could go to the trouble of finding a buyer of all your physical loot.

If that sounds exhausting, consider one of the many funds that trade based on the worth of actual gold stored in vaults.

The GraniteShares Gold Trust (BAR, $17.75) is one of the best bear market ETFs for this purpose. Each ETF unit represents 1/100th of an ounce of gold. And with a 0.1749% expense ratio, it's the second-cheapest ETF that's backed by physical gold. Traders also like BAR because of its low spread, and its investment team is easier to access than those at large providers.

Learn more about BAR at the GraniteShares provider site.

• Type: Buffered
• Assets under management: $392.7 million
• Dividend yield: 0.0%
• Expenses: 0.79%

A rising fund type of the past few years has been "buffered ETFs" or "defined outcome ETFs." While they differ from provider to provider, they tend to invest in some sort of broad market index, such as the S&P 500, but then trade call and put options to limit the amount of downside they can experience. The flip side? There's also a maximum amount of upside they can experience.

Put more simply: They limit your downside, but also your upside.

Also, many, like the Innovator ETFs, are for specific 12-month periods, with each fund designed to be invested in starting during a certain month.

The Innovator U.S. Equity Power Buffer ETF - January (PJAN, $31.59), for instance, tries to track the return of the SPDR S&P 500 ETF Trust (SPY), up to a predetermined cap, while protecting investors against the first 15% of losses over the outcome period, which is basically the next year. So in the case of PJAN, the outcome period would start Jan. 1, 2023, and end at 2023's close, then reset in 2024. (And yes, the outcome period for 2022 is about to come to a close.)

PJAN is absolutely doing its job in 2022, declining just 5% versus the S&P 500's 18%.

The two major risks to watch out for with PJAN are a rip-roaring bull run or a monster decline. In the first scenario, PJAN's upside would be capped; in the second, PJAN would indeed protect you from 15% of that downside, but you would suffer anything on top of that. In a 40% downturn, you'd still lose 25%; other bear market ETFs might perform better.

Learn more about PJAN at the Innovator ETFs provider site.

• Type: Inverse stock
• Assets under management: $2.9 billion
• Dividend yield: 0.0%
• Expenses: 0.89%

Many of the best bear market ETFs we've talked about so far seem likely to lose less than the market during a downturn, and some might even generate positive returns.

But the ProShares Short S&P500 ETF (SH, $16.01) is effectively guaranteed to do well if the market crashes and burns.

The ProShares Short S&P500 ETF is a complex machine of swaps and other derivatives (financial instruments that reflect the value of underlying assets) that produces the inverse daily return (minus fees) of the S&P 500 Index. Or, put simply, if the S&P 500 goes up 1%, SH will go down 1%, and vice versa. If you look at the chart of this ETF versus the index, you'll see a virtual mirror image.

This is one of the simplest market hedges you'll find.

Chances are you own a lot of stocks you believe in for the long term, and if you've held them a while, you're probably sitting on some great dividend yields on your original purchase price. Now, if you think the market will keep going south for a prolonged period of time, you could dump those stocks, lose your attractive yield on cost, pay taxes on your capital gains, and hope to time the market right and buy back in at a lower cost.

Or … you could just hang on to those stocks, buy some SH to offset some short-term losses in your portfolio, then sell it when you think the recovery is about to get under way.

There's a very clear risk, of course: If the market goes up, SH will nullify some of your gains.

Yes, there are much more aggressive "leveraged" inverse ETFs that provide double or even triple this kind of exposure, whether it's to the S&P 500, market sectors or even specific industries. But those are far too risky for buy-and-hold investors. On the other hand, a small hedging position in SH is manageable and won't crack your portfolio wide open if stocks manage to fend off the bears.

Learn more about SH at the ProShares provider site.

• Type: Inverse stock
• Assets under management: $151.8 million
• Dividend yield: 0.0%
• Expenses: 4.29%

Another way to peel this particular banana is an actively managed short-selling fund that has been around for a little more than a decade.

The AdvisorShares Ranger Equity Bear ETF (HDGE, $28.59), which hit the market in 2011, relies on fundamental research to determine which stocks it should bet against.

Managers John Del Vecchio and Brad Lamensdorf attempt to identify companies with "low earnings quality or aggressive accounting which may be intended on the part of company management to mask operational deterioration and bolster the reported earnings per share over a short time period." They also try to identify shorter-term downward catalysts, such as a company missing earnings expectations or reducing its financial forecasts.

Because the managers operate on a stock-by-stock basis, the makeup will change over time. Right now, the pair are most bearish on small caps (46%), then mid-caps (36%), and the rest of their positions are in large caps (18%). From a sector perspective, they're most bearish on technology stocks (39%). At the moment, CarMax (KMX) and Coinbase Global (COIN).

In 2022, HDGE has been the real deal, delivering a 16% gain for its pessimistic shareholders. And that’s after factoring in considerable expenses north of 4%.

Learn more about HDGE at the AdvisorShares provider site.

• Type: Options
• Assets under management: $279.3 million
• Dividend yield: 1.2%
• Expenses: 0.59%

There are bear markets, and then there are rapid, chaotic descents into a sea of red.

Cambria Tail Risk ETF (TAIL, $15.79) is designed for the latter.

This fund invests in a portfolio of primarily intermediate-term U.S. Treasuries, but also out-of-the-money put options (puts that have not yet reached their strike price) on the U.S. stock market. The latter is where the fund gets its oomph – if the stock market heads precipitously lower, TAIL's options will spike.

But in all other conditions – not just rising markets, but even a slowly developing bear market – TAIL isn't going to do much for you. Cambria even warns right up front on its fund page that because "the fund is designed to be a hedge against market declines and rising volatility, Cambria expects the fund to produce negative returns in the most years with rising markets or declining volatility."

Here are three examples to help illustrate the point:

1. In late 2018, amid a burgeoning trade war between the U.S. and China, the stock market quickly plunged into a near-bear market, declining 19% in about three months. TAIL jumped 24% in that time.
2. In a little more than a month – between Feb. 19 and March 23 of 2020 – COVID fears sent the S&P 500 lower by almost 34%. Cambria's ETF soared by 28%.
3. 2022's bear market started on Jan. 3 but didn't hit its (for now) bottom until Oct. 12 – a roughly 25% decline on a price basis. On the same basis, the market is off about 20% as of late December. The Cambria Tail Risk ETF is off 10%, which is still better than the market, but clearly this isn’t an optimal environment for its strategy.

In short, TAIL is only suitable for the most dour of outlooks. If you’re expecting the market to decline in a more orderly fashion, one of the other bear market ETFs above will be more your speed.

Learn more about TAIL at the Cambria provider site.

Is the stock market open on Christmas Eve and Christmas? The answer to that question is no-ish. That's because Christmas Eve is an early closure day for Wall Street, while both the stock and bond markets are closed for the entirety of Christmas Day.

This year, Christmas Eve falls on Wednesday, December 24, so the stock market closes at 1 pm Eastern Standard Time, and the bond market will close at 2 pm. Christmas Day is on Thursday, December 25.

The stock market has built up impressive gains so far this year, aided in part by the Federal Reserve's rate-cutting efforts and a muted impact on inflation from President Donald Trump's tariff policies. As of this writing, the Nasdaq Composite is up 20% for the year to date, while the S&P 500 is 16% higher and the Dow Jones Industrial Average has added 13%.

While markets have had a mixed start to the final month of the year – the Dow is up 1%, while the S&P 500 and Nasdaq are in the red – they could resume their momentum into year's end.

"There is still time for stocks to stage a Santa Claus rally, which historically comes during the final few trading days of the year," says Alexander Guiliano, chief investment officer at Resonate Wealth Partners. "Even though markets have been choppy for about six weeks, the backdrop remains strong and this contraction in valuations is presenting opportunities for investors who don't have enough stock exposure."

Are banks open on Christmas? The answer to that question is no. Christmas Day is one of several bank holidays in 2025, so banks will not be open.

Below, we feature a full schedule of all stock market holidays and bond market holidays for 2025.

 2025 stock market holidays

2025 bond market holidays

* This is the recommended bond market holiday schedule from the Securities Industry and Financial Markets Association (SIFMA). This schedule is subject to change.

Related links

• Kiplinger's Earnings Calendar for This Week
• When Is the Next Fed Meeting?
• When is the Next CPI Report?
• When Is the Next Jobs Report?
• Kiplinger's Economic Calendar for This Week

What are the stock market holidays for 2026? This handy guide to when the stock market and bond market holidays fall throughout the calendar year will help you answer that question.

There is a full slate of holidays for the new year, so it's worth keeping informed on when they are scheduled.

Stock market holiday schedule

The NYSE and Nasdaq typically observe 10 stock market holidays each year. Here's what will be observed in 2026:

• New Year's Day – Thursday, January 1
• Martin Luther King, Jr. Day – Monday, January 19
• Presidents Day – Monday, February 16
• Good Friday – Friday, April 3
• Memorial Day – Monday, May 25
• Juneteenth – Friday, June 19
• Independence Day – Friday, July 3*
• Labor Day – Monday, September 7
• Thanksgiving Day – Thursday, November 26
• Christmas Day – Friday, December 25

* Note: Independence Day, or July 4, falls on a Saturday in 2026, so the stock market will be closed in observance of the holiday on Friday, July 3.** (All times featured here are in Eastern Standard Time unless otherwise indicated.)

And sometimes, the stock market will close early in the days preceding or following market holidays.

For example, the NYSE and Nasdaq close at 1 pm on July 3 (if both it and July 4 fall on a weekday), the day after Thanksgiving, also known as Black Friday, and on Christmas Eve (if the holiday falls on a weekday).

Below is the full stock market holiday schedule for 2026:

2026 stock market holidays

Bond market holiday schedule

The bond markets observe the same 10 holidays as the stock market does, as well as two additional holidays. Here's where they fall in 2026:

• Columbus Day – Monday, October 12
• Veterans Day – Wednesday, November 11

The bond markets also observe several early closings at 2 pm each year. This is when those occur in 2026:

• The Thursday before Good Friday – Thursday, April 2
• The Friday before Memorial Day – Friday, May 22
• The day preceding Independence Day – Thursday, July 2*
• Black Friday, or the day after Thanksgiving – Friday, November 27
• Christmas Eve – Thursday, December 24
• New Year's Eve – Thursday, December 31

* Note: Independence Day, or July 4, falls on a Saturday in 2026, so the bond market will be closed in observance of the holiday on Friday, July 3. It will also close early at 2 pm Eastern Standard Time on Thursday, July 2.

Here is the full bond market holiday schedule for 2026:

2026 bond market holidays

When it comes to the stock and bond markets alike, if a holiday falls on a weekend, market closures are dictated by two rules:

• If the holiday falls on a Saturday, the market will close on the preceding Friday.
• If the holiday falls on a Sunday, the market will close on the following Monday.

What are the stock and bond market trading hours?

For those wanting answers to other questions, like what time does the market open, regular stock market trading hours for the New York Stock Exchange (NYSE) and Nasdaq Stock Market are 9:30 am to 4 pm on weekdays.

Bond markets usually trade between 8 am and 5 pm.

The stock markets close at 1 pm on early closure days. Bond markets close early at 2 pm.

Many folks might wonder why the stock market offers such limited hours when there are certainly people who want to buy and sell at all times of the day.

One of the main reasons for this is "liquidity," or how much buying and selling is going on at a given time.

The more liquidity in a particular security, the likelier you are to get a fair price on it; the less liquidity, the more likely you might have to settle for a less-than-ideal price to finish a transaction.

"For the market to function effectively, you need buyers and sellers," says Charles Sizemore, principal of Sizemore Capital Management. "This is why the stock market has set hours that happen to correspond to the East Coast workday. You want the maximum number of traders buying and selling at the same time."

If you were at an estate auction selling your grandmother's antiques, you'd want a lot of bidders there. It's the same rationale in the stock market.

And there is trading that is done outside of these regular hours. On days with a regular session, for instance, there is "pre-market" trading. This occurs before the market, and while hours vary, they can extend as early as 4 am and run until the opening bell rings at 9:30 am.

There is also "after-hours" trading, which happens after the market closes and typically runs from 4 pm to 8 pm. Meanwhile, the Nasdaq has submitted paperwork to the Securities and Exchange Commission to allow for 24-hour trading, while some online platforms offer "overnight trading," which gives investors the ability to trade around the clock.

But just because you can trade outside of regular stock market trading hours doesn't necessarily mean you should.

Investors should be aware that volume and liquidity tend to be lower in pre-market, after-hours and overnight trading.

Temporary market stoppages

The stock market rarely closes unexpectedly, but so-called circuit breakers do occasionally trigger temporary trading halts.

Circuit breakers were first introduced after the Black Monday crash of October 1987. The Dow dropped almost 23% in a single session, which stands as a record to this day.

The most recent circuit breaker was triggered in March 2020 at the start of the COVID-19 pandemic.

Circuit breakers are intended to curb panic selling. Like calling a timeout in sports, a temporary pause in trading allows market participants to catch their breath, though it doesn't necessarily keep stocks from declining once trading resumes.

There are three levels of circuit breakers tied to how steeply the market declines:

• A Level 1 market-wide circuit breaker is tripped if the S&P 500 falls 7% from its previous close.
• A Level 2 circuit breaker comes into effect when the market plunges 13%.
• A Level 3 circuit breaker kicks in if the market tanks 20%.

A Level 1 or Level 2 breach halts trading for a minimum of 15 minutes. A Level 3 rout halts trading for the remainder of the trading day.

Level 1 and Level 2 circuit breakers can be triggered between 9:30 am and 3:25 pm. A Level 3 breach can be triggered at any time.

Extraordinary stock market closures

The market has also shut down a smattering of times throughout history following catastrophic events.

In 2012, the New York Stock Exchange and Nasdaq closed for two days due to damage caused by Hurricane Sandy.

And the attacks on the World Trade Center and Pentagon prevented the market from opening on September 11, 2001, and the exchanges remained shut until September 17.

Prior to that, you have to go back to World War I for an example of the stock market shutting down. The outbreak of hostilities in Europe led The New York Stock Exchange to close up shop from July 31 to November 28, 1914.

The market went dark only two other times in its history. The NYSE closed for 10 days during the Panic of 1873; and it took a week off trading to mourn the assassination of President Abraham Lincoln in 1865.

Additionally, markets will typically close when a former president dies. They were most recently shuttered in January 2025 for a national day of mourning and a state funeral for former President Jimmy Carter.

Data provided by the NYSE and SIFMA.

**Editor's Note: This article previously stated that the stock market will close early at 1 pm Eastern Standard Time on Thursday, July 2, 2026. That is incorrect and the stock market will be open for regular trading hours that day. We apologize for the confusion.

Related content

• Kiplinger's Earnings Calendar for This Week
• Kiplinger's Economic Calendar for This Week
• When Is the Next Fed Meeting?
• When Is the Next CPI Report?
• When Is the Next Jobs Report?

As the end of 2022 nears, it’s a great time to think about some 2023 financial strategies.

Any way you cut it, this year has been a tough one to manage money, and we are all feeling it. The markets are down double digits, and everything from gas to groceries costs more. Uncertainty is everywhere, from central bankers to Wall Street traders.

All that noise can make us guess and second-guess our financial decisions, and it introduces additional layers of complexity that make managing our finances more challenging than in years past. So as the new year fast approaches, what are some ways you can try to set yourself up for financial success in 2023?

As a start, expect inflation, rising short-term interest rates and market volatility to stick around next year. If things change, take that as a happy development. But plan on things to stay the same so you’ll be prepared.

The question then becomes what to do, and my advice is to keep things simple. Tune out the noise and go back to basics. Adopt some time-tested principles and stick with them.

Here are some simple rules of the road to consider:

1. Meet Inflation Head On by Revisiting Your Budget.

There are a lot of open questions about the impact inflation will have on the economy and the markets. Rather than speculating in those areas, there’s a simpler way to respond to higher prices – adjust your spending.

Granted, there are some costs that are out of your control – essential groceries, commuting costs, urgent home repairs. Identify those and look for offsets in other parts of your life. Use inflation as an opportunity to reprioritize your buying decisions.

One good example – the holiday spending season right now. This is one of the biggest periods for spending in the year. This time around, you may find a gap in what you’ve budgeted for in the past and what actual costs look like today.

Rather than just giving in to spending more, use the moment to rethink the who, what, why and how you celebrate this year. Quality time with friends and family can be a great gift to give. Instead of a big gift exchange, maybe organize a dinner and agree to make a small donation to charity.

2. Meet Rising Interest Rates Head On by Revisiting Your Debt.

Interest rates have gone up quickly over the past year, and there are signals they will continue to rise in 2023. That makes the cost of borrowing more expensive, spanning everything from mortgages to car loans to credit cards.

As a result, managing personal debt has higher stakes. It’s a time to focus on paying down debt if you can and trying to avoid unnecessary new sources of debt such as credit cards that come with higher interest rates. Instead, look to see if there are opportunities to consolidate your credit card debt and transfer any existing balances to cards that offer lower rates.

Review your entire debt portfolio and see if you have any loans with variable rates. Factor that into your budget and consider if there are ways to lock in rates before they go higher.

Last, be careful of offers such as “buy now, pay later.” In the moment, it could look like an avenue to avoid taking on more credit card debt, but in fact it’s just debt in a different form. Perhaps the best choice is to delay making any big purchases that aren’t critical or necessary right now.

3. Meet Market Volatility Head On by Remaining Calm and Not Panicking.

Investing for most people is a long-term exercise. But it can be hard not to get distracted by day-to-day swings in the markets, particularly when the numbers are trending downward.

On one hand, we know the cardinal rule of investing is to avoid buying high and selling low. On the other, it’s only human to want to stem losses when markets are declining.

Rather than trying to anticipate the next zig or zag, it can be better to see it as an emotional exercise. The goal is to remain calm and not panic — and to remember that history has generally favored investors who don’t sell when markets take significant dips.

Avoid impulsive decisions, remember it’s a marathon, not a sprint and stick with your long-term plan.

We’re only a couple of weeks away from the end of the year, and it’s always around this time that I get asked about resolutions. I don’t have anything against making a list of things you want to improve upon next year with your finances, but if I had one piece of advice, it would be to avoid over-reaching. Make your lists simple and small and be dedicated about sticking to them; you’ll have a better shot at success.

Here are three ideas for 2023 – ratchet down your spending a little, carefully manage your debt and remain calm.

The information provided here is for general informational purposes only and is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, consult with a qualified tax adviser, CPA, financial planner or investment manager. (1122-26AX)

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Beaten down META stock popped on Friday after shares in Facebook parent Meta Platforms (META) caught an upgrade from a prominent Wall Street analyst.

JPMorgan's Doug Anmuth raised his rating on META stock to Overweight (the equivalent of Buy) from Neutral (Hold), and he raised his target price on shares as well. 

The news helped META stock gap up nearly 6% at the opening bell, and builds upon bulls' case that shares in the social media giant are a screaming bargain buy after suffering one of the more epic price collapses in recent memory. 

To put META stock's market carnage in perspective, before Friday's jump, shares had lost almost 70% of their value since hitting an all-time closing high of $382.18 on Sept. 7, 2021. META's market capitalization, which peaked at $1.08 trillion not so long ago, is down to about $320.2 billion. 

That's smaller than Johnson & Johnson (JNJ) or Procter & Gamble (PG) or Walmart (WMT) – hardly companies with designs on being at the center of the next great revolution in tech. 

Of course, META stock is so very down in the dumps precisely because Meta Platforms is burning through many tens of billions of dollars in cash in pursuit of its metaverse dreams. 

And yet any time a name as admired and once high-flying as META stock goes into freefall, it's only natural for analysts and investors to ask if shares are an irresistible bargain buy.

Fair enough. Selloffs are frequently overdone, after all. Stocks get beaten down beyond reason when emotions overwhelm a focus on the fundamentals. 

Anmuth, and many of his colleagues on the Street, say that the above is indeed the case with META stock.

"[H]eading into 2023, we believe some of these top- and bottom-line pressures will ease, and most importantly, Meta is showing encouraging signs of increasing cost discipline, we believe with more to come," Anmuth writes in a note to clients. The analyst also raised his price target to $150 a share from $115, which gives META stock implied upside of about 24% in the next 12 months or so.

And Anmuth is hardly alone in his ardor for the Facebook parent. Of the 56 analysts issuing opinions on META stock tracked by S&P Global Market Intelligence, 27 rate it at Strong Buy, 10 say Buy, 16 have it at Hold and two call it a Sell. Additionally, one analyst slaps a rare Strong Sell recommendation on shares.

That works out to a consensus recommendation of Buy, with fairly high conviction. Meanwhile, the Street's average price target of $154.19 gives META stock implied upside of about 28% in the next 12 to 18 months.

True, there's a Wall Street cliche warning folks about buying a stock when it's collapsing as META is: Don't try to catch a falling knife. In META's case, not too long ago it looked more like trying to catch a falling Guillotine blade with your neck.

It's just possible, however, that valuation has finally put something of a floor under shares. META stock is up 3.1% over the past month, vs. a decline of almost 4% in the S&P 500. 

It could also be the case that recent revenue troubles are stabilizing at Meta Platforms, as Anmuth contends.

"Overall, while trends remain choppy and are also pressured by macroeconomics, we are at least hearing some early anecdotes of marketers and agencies bringing ad dollars back to Meta due to its scale and still strong return on investment," the analyst says.

Over at Oppenheimer, analyst Jason Helfstein reminds clients that Meta Platforms remains the world's largest social networking company, with 3.7 billion monthly users across all properties. That gives it enormous leverage across its extant businesses, and a huge leg up as it moves to building out the metaverse.

"While META's historical advantage has been the social graph and the ability to share and follow pictures and videos uploaded by users, the company now believes it must evolve to use advanced algorithms to deliver content to users and leverage its social graph in the Metaverse," writes Helfstein, who rates the stock at Outperform (the equivalent of Buy).

If Meta Platforms can deliver higher-than-expected monetization via Instagram, Stories and video, as well as monetize its new e-commerce function and generate greater-than-expected user engagement, shares will one day look ridiculously cheap at current levels. 

That's the bull case – or part of it – anyway. And even META stock optimists acknowledge this is going to be a show-me stock for several quarters, at the very least.

Whether Meta Platforms can pull out of this nosedive very much remains to be seen. On the other hand, the idea is to buy low. If CEO Mark Zuckerberg and company can pull this off, META stock will have proven to be an absolute steal during what has become a truly dark period for long-term shareholders. 

 It was an ugly day for stocks as the major market indexes extended yesterday's Fed-induced slump into a second straight day. 

Today's selling was sparked by the latest batch of economic data, which exacerbated recession fears across Wall Street. Retail sales and manufacturing data released early Thursday showed that the Federal Reserve's aggressive campaign of interest rate hikes are indeed cooling both the U.S. economy and inflation. And yet Fed Chair Jerome Powell warned Wednesday that rates could stay higher for longer until tightness in the labor market starts to ease. 

One economic data point that didn't come to pass today was any sign of cooling in the jobs market. Indeed, the Labor Department said earlier that weekly jobless claims fell by 20,000 last week to a seasonally adjusted 211,000.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Progress on slowing the economy was seen elsewhere, however, with data from the Commerce Department showing that retail sales fell 0.6% month-over-month in November – the weakest reading since December 2021. Additionally, data from the Fed showed manufacturing activity in both New York state and the Philadelphia region declined by more than expected. 

"The labor market might not be breaking but it is becoming clear the consumer is weakening and manufacturing activity is in a recession," says Edward Moya, senior market strategist at currency data provider OANDA. "Labor market weakness will be more noticeable next year and that should help reduce some of the constant wage pressures we are still seeing."

Today's selling was widespread, with the rate-sensitive communication services (-3.9%) and technology (-3.7%) sectors bearing the brunt of the losses. As for the major indexes, the tech-heavy Nasdaq Composite slumped 3.2% to 10,810, the broader S&P 500 Index fell 2.5% to 3,895, and the blue-chip Dow Jones Industrial Average dropped 2.3% to 33,202. It was the largest one-day drop for all three indexes since September.

Is Growth Poised for a Comeback?

We're close to the end of what has been a truly unforgiving year for investors. After all, the S&P 500 is on track for its worst annual loss since 2008. Should investors expect more of the same in 2023? It depends on whom you ask. 

Wells Fargo analysts Chris Harvey and Michael Turrin expect 2023 to be "a back-and-forth year." Yes, they anticipate "double-digit sell-offs driven by the Fed and economic concerns," but, "ultimately, we see equities ending higher as the inflation fever breaks, the economy enters a malaise (not a sharp recession) and interest rates plateau." The duo add that the environment is supportive of growth, particularly at the mid-cap level, which is where they believe investors can find the best growth stocks.

Although there are plenty of opportunities to be found in growth-oriented investments, investors who want to spread the risk around may want to consider these best growth ETFs for 2023. The names featured here offer broad exposure to higher-risk, higher-reward stocks across a range of strategies.

A relatively quiet day on Wall Street resulted in a win for stocks as bargain hunters swooped in following a stretch of losses for the major market indexes. The recent spate of selling was sparked by worries that the Federal Reserve will keep hiking interest rates and hold them higher for longer as the U.S. economy continues to show signs of strength. However, this morning's weekly jobless claims data hinted that the Fed's aggressive policy could finally be starting to slow the labor market – and gave investors a much-needed silver lining of hope.  

Specifically, data from the Labor Department showed weekly jobless claims rose slightly to 230,000 last week, which was in line with economists' estimates. Continuing claims increased by 62,000 to 1.67 million, or the most since February.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

"While initial jobless claims are still low, hiring is slowing sharply, translating to a much larger share of job-losers who continue to claim jobless benefits after their first week unemployed," says Bill Adams, chief economist for Comerica Bank. "Other data similarly point to slower hiring. The hires rate in October was its lowest since the pandemic struck the United States, and LinkedIn's Hiring Index fell 20.5% year-over-year in November."

The bad news on the labor front was good news for the equities market. The S&P 500 Index snapped its five-day losing streak, adding 0.8% to 3,963. The tech-heavy Nasdaq Composite rose 1.1% to 11,082 and the blue-chip Dow Jones Industrial Average gained 0.6% to 33,781.

The Best Energy ETFs to Buy

Not everything ended Thursday's session on a high note, however. Energy (-0.5%) was one of just two sectors that finished in the red (communication services (-0.2%) being the other), extending a recent bout of weakness over concerns of slowing global demand. Still, the sector has had a standout run in 2022 and remains up more than 50% for the year-to-date. 

Following a year like this, what are the chances energy can repeat its success in 2023? While it's unlikely oil stocks will once again post the impressive gains they accumulated this year, there are certainly many catalysts that can keep the wind at their back – including the continued easing of COVID-19 restrictions in China. 

And there are plenty around Wall Street who remain optimistic toward energy heading into the new year. "We see energy sector earnings easing from historically elevated levels yet holding up amid tight energy supply," says Carrie King, global deputy chief investment officer at BlackRock Fundamental Equities, adding that among cyclical sectors, her firm favors energy (and financials) in 2023. For those who believe there's still some gas left in the tank, check out these eight top energy ETFs to buy right now.

Stocks bounced back and forth between positive and negative territory for most of Wednesday before ending the day with yet another loss. 

With little in the way of economic data to react to, investors continued to fret over the Federal Reserve's next steps as far as interest rates go. Also worrying Wall Street were recent comments from some of the country's top bank CEOs, which served to amplify fears of a possible recession in 2023. One of the more notable remarks came from Wells Fargo CEO Charlie Scharf. "There is a slowdown happening, there's no question about that," Scharf said at a financial conference Tuesday, adding that he expects "a fairly weak economy throughout the entire year." 

"It would appear the recovery in stocks – bear-market rally, or otherwise – has run out of steam, and investors are left wondering whether what follows next is another test of the lows or simply a correction of that impressive two-month surge," says Craig Erlam, senior market analyst at currency data provider OANDA. "The difficulty investors have now is balancing the coming end of the tightening cycle with a potential global recession next year amid heavily discounted valuations." 

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

While the broader market chopped around on Wednesday, several individual stocks made decisive moves. Carvana (CVNA), for one, plummeted 42.9% as bankruptcy buzz swirled around the one-time pandemic darling. Tesla (TSLA) was another noteworthy decliner, with the electric vehicle maker falling 3.2% amid concerns over weakening demand in both the U.S. and China.

As for the major indexes, the broader S&P 500 Index notched its fifth straight loss, giving back 0.2% to 3,933. The tech-heavy Nasdaq Composite fell 0.5% to 10,958, while the blue-chip Dow Jones Industrial Average eked out a 1.6-point gain to end at 33,597.

Deere, Southwest Unveil Dividend News

On a brighter note, several companies announced shareholder-friendly initiatives today. These included farm equipment maker Deere (DE, +0.6%), which lifted its annual dividend by 6%, and air carrier Southwest Airlines (LUV, -4.7%), which reinstated its dividend payment after suspending it early on in the pandemic. 

Additionally, Lowe's (LOW, +2.4%) unveiled a new $15 billion share buyback program, which will be added to the previous program's balance of $6.4 billion as of Dec. 6. The home improvement retailer is also a member of the S&P 500 Dividend Aristocrats – or S&P 500 companies that have raised their payouts for at least 25 consecutive years. In May, LOW hiked its dividend by 31%, marking its 48th straight annual increase. We regularly refresh our running list of Dividend Aristocrats, so if you are looking for the best dividend stocks on Wall Street, you'll definitely want to check it out.