Stocks opened comfortably higher Friday, but lost steam as the session wore on. Amid an empty economic calendar, attention was focused on the latest batch of earnings reports and a continued win streak for the Dow Jones Industrial Average.
American Express (AXP) was one of the most notable earnings movers today, with the Dow stock slumping 3.9% after its Q2 results. Drilling down on the numbers, the credit card company reported higher-than-expected earnings of $2.89 per share, though revenue of $15.1 billion fell short of estimates.
Particularly noteworthy were comments from American Express CEO Steve Squeri, who said in the company's earnings call that "cardmembers' spending hit another all-time high in the quarter." Translation: The consumer remains resilient even as the Federal Reserve tries to bring down inflation by slowing the economy.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
CSX (CSX) was another post-earning decliner, with the industrial stock falling 3.7% after its quarterly report. The railroad operator said both earnings and revenue were down on a year-over-year basis in its second quarter, though the 49 cents per share and $3.7 billion it reported matched analysts' estimates.
Tech stocks decline ahead of Nasdaq-100 rebalancing
Meanwhile, several tech stocks including Apple (AAPL, -0.6%) and Nvidia (NVDA, -2.7%) declined ahead of Monday's major rebalancing of the Nasdaq-100 Index. The Nasdaq offshoot tracks 100 of the largest and most actively traded non-financial stocks listed on the Nasdaq stock exchange. This year's mega-cap tech rally has resulted in oversized weightings in a handful of stocks, and the rebalancing is needed to bring them back in line with the index's methodology.
A special Nasdaq-100 rebalancing is rare and last occurred in 2011, says David Kostin, chief economist at Goldman Sachs. Apple and Microsoft (MSFT, -0.9%) will have the biggest reductions in weightings, Kostin adds, while semiconductor stock Broadcom (AVGO, +1.0%) will see the largest increase.
At the close, the Dow was up marginally at 35,227, eking out a 10th straight win. The S&P 500 also finished with a fractional gain at 4,536, while the Nasdaq Composite slipped 0.2% to 14,032.
Big Tech earnings, Fed meeting on deck
So what's in store for next week? It will be a busy one, that's for sure. A jam-packed earnings calendar will certainly keep investors on their toes, particularly as Big Tech results start to roll in. Among the many notable names set to report is Microsoft, which has been one of the best AI stocks so far this year.
Additionally, the next Fed meeting will kick off Tuesday, with the central bank's monetary policy announcement due out Wednesday afternoon. Futures traders are pricing in a 99.8% chance the Fed will hike interest rates by a quarter-percentage point next week, according to CME Group, so all eyes will be looking for hints as to whether this will be the end of rate hikes – or if another is expected later this year.
In his press conference, which will occur after the policy statement, Fed Chair Jerome Powell "is likely to emphasize that further evidence is needed to have confidence inflation will be tamed," and that more tightening is needed, says Matthew Luzzetti, chief economist at Deutsche Bank. However, with the July and August consumer price index (CPI) and jobs reports due out between now and the September Fed meeting, Powell is unlikely to give strong guidance on the potential for more rate hikes. "Data dependency will remain a key theme for the Chair," Luzzetti says.
Related Content
-
Planning a Major Home Renovation? 3 Smart Ways to Finance ItFrom HELOCs to personal loans, here’s how to pay for a major home renovation without draining your savings.
-
Six Warren Buffett Quotes Every Retiree Should Live ByThe 'Oracle of Omaha' knows a thing or two about life, investing and retirement.
-
Stocks Rise to End a Volatile Week: Stock Market TodayThe market's fear index reached and retreated from a six-month intraday peak on Friday as stocks closed the week well.
-
Trade Uncertainty Sparks Whipsaw Session: Stock Market TodayVolatility is making a cameo here in mid-October, a generally positive month marked by its historic stock market events.
-
Dow Adds 587 Points as Stocks Bounce: Stock Market TodayThe main indexes rebounded sharply Monday after President Trump took a calmer stance toward China.
-
Dow Dives 878 Points on Trump's China Warning: Stock Market TodayThe main indexes erased early gains after President Trump said China is becoming "hostile" and threatened to cancel a meeting with President Xi.
-
S&P 500 Hits New Highs as Rally Resumes: Stock Market TodayTech stocks were the biggest gainers on Wall Street today, with Nvidia and Dell making notable moves.
-
Rally Fades on Mixed AI Revolution News: Stock Market TodayAll three main U.S. equity indexes opened higher but closed lower as a seven-session winning streak for the S&P 500 came to an end.
-
S&P, Nasdaq Hit New Highs: Stock Market TodayA late-day rally wasn't enough to lift the Dow into the green as its six-session winning streak came to an end.
-
Dow Adds 238 Points as UNH, CAT Pop: Stock Market TodayThe lack of a September jobs report didn't seem to worry market participants, with the data delayed due to the ongoing government shutdown.
