Stocks were choppy Thursday as investors took in an onslaught of corporate earnings reports. Caution could also be setting in ahead of next week's key inflation update, especially as expectations for a March or May rate cut have dropped dramatically in recent days.
The Dow Jones Industrial Average rose 0.1% to 38,726, while the while the Nasdaq Composite added 0.2% to 15,793. The S&P 500 struggled against the psychologically significant 5,000 level, briefly toppling it in intraday action before closing just below here at 4,997.
Investors have one eye trained on the January Consumer Price Index (CPI) report, due out ahead of Tuesday's open. The results of the next CPI report "may determine whether the stock market will be able to keep setting new record highs in the near term," says Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley.
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.
Recent data has shown the U.S. economy remains resilient even as the Fed keeps its federal funds rate at a 23-year high in order to tame inflation. As such, futures traders are now pricing in an 18% chance the Fed will cut rates by a quarter-percentage point in March, down from 38% one week ago, per CME Group's FedWatch Tool. The probability for a May rate cut is also falling, currently at 52% vs last week's 60%.
Arm stock jumps nearly 50% after earnings
Today, it was all about earnings, with several stocks making major event-driven moves. Arm Holdings (ARM), for one, skyrocketed 47.9% after the chipmaker reported a fiscal third-quarter revenue beat and lifted its full-year outlook. The company cited strong royalty and license revenue, as well as "increasing demand for new technology driven by all things AI [artificial intelligence]."
Additionally, Arm noted that "the broader semiconductor market is showing signs of recovery, particularly in smartphones which returned to strong growth" over the three-month period.
Arm held its initial public offering (IPO) back in September and it was tough sledding for the semiconductor stock in those first two months. However, ARM stock is now up more than 130% since late October.
Disney pops on dividend news, Epic Games investment
Walt Disney (DIS) was another big mover, with the Dow Jones stock jumping 11.5% after the media and entertainment giant reported earnings of $1.22 per share on revenue of $23.5 billion. While DIS beat on the bottom line, its top-line results fell just shy of analysts' expectations for revenue of $23.8 billion.
There was certainly plenty to unpack in Disney's earnings report. While Disney+ subscribers fell by 1.3 million after the company hiked prices on its streaming service, Hulu subscribers increased by 1.2 million. Additionally, DIS boosted its quarterly dividend by 50% to 45 cents per share after reinstating it in December following a three-year suspension. The board also approved a $3 billion stock buyback program.
Meanwhile, DIS said it's investing $1.5 billion in "Fortnite" creator Epic Games, which follows yesterday's headlines of a new sports streaming deal for Disney-owned ESPN.
"In a little over a year since returning to the company as CEO, Bob Iger's actions are already having an impact," says BofA Securities analyst Jessica Reif Ehrlich (Buy). "While several big picture questions remain, we are incredibly encouraged by DIS’ progress on several strategic and financial initiatives which are reflected in its fiscal Q1."
PayPal sinks as CEO warns of "transition year"
Not all of today's earnings reports were as encouraging. PayPal (PYPL) slumped 11.2% after its fourth-quarter results. While the digital payments company beat on both its top and bottom lines in Q4, it gave weak full-year guidance.
In the subsequent earnings call, CEO Alex Chriss said fiscal 2024 is "going to be a transition year, focused on execution to position the business for long-term success."
Related content
- Does NYCB's Selloff Make Regional Bank Stocks a Buy?
- Super Bowl Indicator: Should Bulls Root for the 49ers or Chiefs?
- 3 Uranium ETFs That Pack a Nuclear Punch
-
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.
-
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 Investing
Investing 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.
-
With Buffett Retiring, Should You Invest in a Berkshire Copycat?Warren Buffett will step down at the end of this year. Should you explore one of a handful of Berkshire Hathaway clones or copycat funds?
-
I'm a Financial Planner: How to Dodge a Retirement Danger You May Not Have Heard AboutTiming is everything, and sequence of returns risk can mean the difference between a retirement nest egg that's overflowing … or empty.
