A sharp selloff in tech and communications services stocks weighed on market sentiment Friday, though solid earnings results for a blue chip credit card company kept the Dow Jones Industrial Average above water. And the volatility could continue next week thanks to a barrage of Big Tech earnings and a key inflation update.
At the close, the Dow was up 0.6% at 37,986 thanks to a post-earnings pop for American Express (AXP).
Indeed, AXP was the best Dow Jones stock today, surging 6.2%, after the credit card company disclosed higher-than-expected Q1 earnings of $3.33 per share on in-line revenue of $15.8 billion. AXP also said consumer spending was up 8% year-over-year, with spending among millennial and Gen Z cardholders rising 15%.
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.
Looking ahead, Argus Research analyst Stephen Biggar (Buy) sees "continued healthy spending volume from AXP's generally affluent cardmembers, who are less impacted by inflation, and see marketing efforts leading to good cardmember growth."
Netflix sinks after Q1 results
While the Dow managed to notch its third win of the week, the S&P 500 (-0.9% at 4,967) and the Nasdaq Composite (-2.1% at 15,282) extended their daily losing streaks to six.
Weighing on the indexes was a negative earnings reaction for Netflix (NFLX, -9.1%). While the streaming giant reported top- and bottom-line beats in its Q1 results and said subscriber growth was up 16% year-over-year, it said it will stop reporting paid membership growth in fiscal 2025.
"The market hasn't taken kindly to news Netflix will stop reporting quarterly membership numbers," says Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. The plan was always to grow the company's customer base, but now that it's at that inflection point, "there will be nerves around what this means for Netflix's label as a higher-octane growth stock," she adds.
The weakness wasn't confined to Netflix, though. Ahead of their appearances on next week's earnings calendar, several Magnificent 7 stocks – including Alphabet (GOOGL, -1.2%) and Meta Platforms (META, -4.1%) – pulled back.
Super Micro Computer spirals 20%
Elsewhere, Super Micro Computer (SMCI) plunged 23% to close at its lowest level since early February. While no concrete news sparked the selloff, media reports suggest investors could be skittish that the company did not preannounce its earnings report as it has done in seven of the past eight quarters. Rather, the AI server, software and infrastructure company said it will release its full fiscal third-quarter results after the close on Tuesday, April 30.
Friday's slump marks a change of pace for the recent S&P 500 addition. To be sure, SMCI has been one of the hottest stocks of 2024, nearly doubling in value for the year to date. As such, some of today's selling could be investors taking profits on the sizzling tech stock.
Inflation data, busy earnings week on deck
Several major events could spark more volatility in the stock market next week. In addition to a number of Big Tech earnings reports, the economic calendar features the March Personal Consumption and Expenditures (PCE) Price Index. The data measures consumer spending and is the Fed's preferred inflation gauge.
Larry Adam, chief investment officer at Raymond James, says investors needn't worry too much about the whipsaw price action. "While market gyrations can be concerning, remember not to panic – pullbacks and interim spikes in volatility are quite common," Adam reminds us, adding that the S&P 500 is still up 20% from its October lows. "This uninterrupted rally is uncommon as it is important to appreciate that the equity market does not go up in a straight line," he says.
Related content
- What Is Bitcoin Halving and Why Is It Important?
- Get These 40 Earth Day Deals and Discounts
- Super Micro Computer: Why This Hot Stock Could Hit $1,500
-
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.
-
Five Things to Consider Now If You Want to Retire in 2026To retire with confidence in the year ahead, tackle these essential tasks right now.
-
S&P, Nasdaq Hit New Highs: Stock Market Today
A late-day rally wasn't enough to lift the Dow into the green as its six-session winning streak came to an end.
-
AMD Stock Surges on OpenAI DealAdvanced Micro Devices could see tens of billions of dollars in new revenue from the ChatGPT maker as the AI infrastructure buildout accelerates.
-
These Stocks Dipped in 2025. Do They Have Value?If you are looking to add new long-term positions to your portfolio, as you should, this is the time to examine stocks that the market shuns.
-
Striking Gold (or Gas): A Financial Pro Unpacks the Nuances of Energy InvestingInvesting in the energy industry, particularly oil and gas, involves understanding the facts about how projects generate returns through cash flow and long-term asset building, while also being aware of the risks.
-
Escaping the New Golden Handcuffs: A Financial Expert Has a Plan for Today's ExecutivesFeeling stuck in your job? It could be your complicated compensation package, but it also could be where you live, your family or even how you view yourself.
-
Stock Market Winners and Losers of the 'Big, Beautiful' BillDefense, manufacturing and tech should prosper, while health care and green energy stocks face hurdles.
-
I'm a Financial Planner: Here's How to Invest Like the Wealthy, Even if You Don't Have MillionsPrivate market investments, once exclusive to the ultra-wealthy and institutions, have become more accessible to individual investors, thanks to regulatory changes and new investment structures.
-
Four Ways a Massive Emergency Fund Can Hurt You More Than It HelpsSaving too much could mean you're missing opportunities to put your money to work. Redirect some of that money toward paying off debt, building retirement funds, fulfilling a dream or investing in higher-growth options.
