Stock Market Today: Dow Nabs Longest Win Streak Since 1987 After Fed Meeting
A mixed batch of earnings and another Fed rate hike couldn't keep the blue chip Dow Jones down.
Stocks closed mixed Wednesday as investors weighed a fresh batch of earnings reports and a mid-afternoon Fed announcement.
Negative reactions to earnings from mega-cap blue chip stock Microsoft (MSFT) and chipmaker Texas Instruments (TXN) created headwinds for most of the session.
And while stocks failed to lift off after the Federal Reserve hiked interest rates to their highest level in 22 years, the Dow Jones Industrial Average managed to eke out its longest daily win streak in decades.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
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.
Taking a quick look at today's earnings reports, Microsoft reported top- and bottom-line beats for its fiscal fourth quarter. However, in the company's earnings call, Chief Financial Officer Amy Hood warned that even with its leadership position in the nascent artificial intelligence (AI) industry, "growth from our AI services will be gradual as Azure AI scales and our copilots reach general availability dates." Additionally, the CFO said capital expenditures will "increase sequentially each quarter through the year" as the company scales to meet demand for its AI platform. MSFT stock fell 3.8%.
Elsewhere, Texas Instruments reported higher-than-expected earnings and revenue for its second quarter, but gave disappointing guidance for its current quarter. Additionally, the company said it will continue forward with plans to build out manufacturing capacity even if it results in short-term changes in gross margin. "Those are not irrelevant, of course," said Rafael Lizardi, chief financial officer of Texas Instruments, in the company's earnings call, "but it's just the focus is on supporting revenue growth in the short-term, midterm and long-term." The semiconductor stock slumped 5.4% today.
Happily, not all of the day's earnings reports were as poorly received. Google parent Alphabet (GOOGL) jumped 5.8% on second-quarter earnings and revenue beats, while Dow stock Boeing (BA) rose 8.7% after reporting a narrower-than-expected Q2 loss.
Fed resumes rate hikes
While the raft of earnings reports commanded the market's attention for much of Wednesday's session, the conclusion of the Federal Reserve's July monetary policy meeting was the marquee event. As expected, the Fed lifted its benchmark rate by 25 basis points (0.25%) to a target range of 5.25% to 5.5% – the highest level since early 2001. In its statement, the Fed said it will remain data dependent in determining if more rate hikes are needed to bring inflation down to its 2% target.
Along those lines, Federal Reserve Chair Jerome Powell said in his subsequent press conference that the central bank will proceed on a meeting-by-meeting basis to determine if future rate hikes are warranted. "Between now and the September meeting, we get two more jobs reports and two more Consumer Price Index (CPI) reports," and the outcome of those reports will drive the Fed's decision-making process, Powell said. But regardless of whether it hikes rates again, the central bank intends "to keep policy restrictive" until it's "confident inflation is coming down," the Fed chair added.
This led to a nail-biter of a finish on Wall Street. While the S&P 500 (-0.02% at 4,566) and the Nasdaq Composite (-0.1% at 14,127) closed modestly lower, the Dow eked out a 0.2% gain to 35,520. This marked the blue chip index's 13th straight advance and longest winning streak since 1987, according to Dow Jones Market Data.
XPEV pops, boosts other EV stocks
Lost in the shuffle of a jam-packed earnings calendar and highly anticipated Fed meeting was news that German automaker Volkswagen (VWAGY, -0.5%) will invest $700 million in Chinese electric vehicle (EV) maker Xpeng (XPEV). The strategic partnership will include the joint development of two VW brand mid-size electric vehicles in the Chinese market. The news was enough to send XPEV stock up nearly 27% and generate a halo effect on other Chinese stocks in the EV industry, including Nio (NIO, +10.6%) and Li Auto (LI, +3.6%).
We've mentioned before that the electric vehicle market is expected to grow by leaps and bounds over the next decade. As just one example, Fortune Business Insights projects a compound annual growth rate of 25.4% through 2028.
As such, investors seeking out the best growth stocks would be wise to keep an eye on the electric vehicle space. Here, we take a look at some of the best EV stocks to capitalize on the expanding industry.
Related Content
-
I Met With 100-Plus Advisers to Develop This AI Road MapFor financial advisers eager to embrace AI but unsure where to start, this road map will help you integrate the right tools and safeguards into your work.
-
The Referral Revolution: How to Grow Your Business With TrustYou can attract ideal clients by focusing on value and leveraging your current relationships to create a referral-based practice.
-
This Is How You Can Land a Job You'll Love"Work How You Are Wired" leads job seekers on a journey of self-discovery that could help them snag the job of their dreams.
-
If You'd Put $1,000 Into AMD Stock 20 Years Ago, Here's What You'd Have TodayAdvanced Micro Devices stock is soaring thanks to AI, but as a buy-and-hold bet, it's been a market laggard.
-
Nasdaq Drops 172 Points on MSFT AI Spend: Stock Market TodayMicrosoft, Meta Platforms and a mid-cap energy stock have a lot to say about the state of the AI revolution today.
-
S&P 500 Tops 7,000, Fed Pauses Rate Cuts: Stock Market TodayInvestors, traders and speculators will probably have to wait until after Jerome Powell steps down for the next Fed rate cut.
-
S&P 500 Hits New High Before Big Tech Earnings, Fed: Stock Market TodayThe tech-heavy Nasdaq also shone in Tuesday's session, while UnitedHealth dragged on the blue-chip Dow Jones Industrial Average.
-
Dow Rises 313 Points to Begin a Big Week: Stock Market TodayThe S&P 500 is within 50 points of crossing 7,000 for the first time, and Papa Dow is lurking just below its own new all-time high.
-
Nasdaq Leads Ahead of Big Tech Earnings: Stock Market TodayPresident Donald Trump is making markets move based on personal and political as well as financial and economic priorities.
-
11 Stock Picks Beyond the Magnificent 7With my Mag-7-Plus strategy, you can own the mega caps individually or in ETFs and add in some smaller tech stocks to benefit from AI and other innovations.
-
Nasdaq Adds 211 Points as Greenland Tensions Ease: Stock Market TodayWall Street continues to cheer easing geopolitical tensions and President Trump's assurances that there will be no new tariffs on Europe.
