Stocks went on a roller-coaster ride Thursday with up-and-down price action sparked by a fresh round of corporate earnings and hawkish Fed commentary.
After spending time in both positive and negative territory today, the Nasdaq Composite closed down 0.5% at 15,601 and the S&P 500 shed 0.2% to 5,011 – a fifth straight loss for both indexes. The Dow Jones Industrial Average eked out a 0.06% gain to 37,775.
Helping boost the main indexes early on was strength in several Magnificent 7 stocks. Notably, Meta Platforms (META) gained 1.5% after the Facebook parent launched Llama 3, its generative artificial intelligence (AI) assistant.
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.
Alphabet (GOOGL) was also in the green, adding 0.4% after the company said it is reorganizing areas of Google to have a stronger focus on AI.
Deutsche Bank thinks Tesla can fall another 18%
Tesla (TSLA), on the other hand, fell 3.6% after Deutsche Bank analyst Emmanuel Rosner downgraded the electric vehicle (EV) stock to Hold from Buy. The analyst also cut his price target to $123 from $189, representing implied downside of 18% to current levels.
Rosner says delays of Tesla's next-generation Model 2 vehicle beyond 2025 create "the risk of no new EVs to the company's lineup for the foreseeable future." The analyst adds that Elon Musk's recent announcement that the company's Robotaxi will be unveiled in early August "in no way means the technology is ready."
Today's loss is just more of the same for Tesla stock. Not only has it closed lower for five straight days, but it's down 37% for the year-to-date – the most of any Mag 7 stock. At today's close, Tesla's market valuation was $478 billion, equivalent to the market cap of discount retail giant Walmart (WMT, -0.7%).
Chip stocks swoon after Taiwan Semiconductor earnings
In other single-stock news, Taiwan Semiconductor (TSM) fell 4.9% after the chip manufacturer reported Q1 earnings. While TSM beat top- and bottom-line estimates, a lower-than-anticipated outlook for the global chip market spooked investors.
Several other semiconductor stocks, including Arm Holdings (ARM, -2.5%), Broadcom (AVGO, -1.8%) and Intel (INTC, -1.8%), fell in sympathy with TSM.
Fed officials talk interest rates
Also in focus Thursday were speeches from a handful of Federal Reserve officials – many of whom echoed the "higher-for-longer" outlook Fed Chair Powell gave earlier this week.
Among them was New York Fed President John Williams, who said in a panel discussion in Washington D.C., that he doesn't "feel urgency to cut rates." Williams added that "at some point," the central bank will want to start cutting interest rates, but "the timing of that is driven by the economy."
The next Fed meeting kicks off on April 30. A steady stream of economic data signaling persistent inflation and a strong labor market has made it all but certain the Fed will keep the federal funds rate at its current 23-year high. And according to CME Group's FedWatch Tool, futures traders are pricing in low expectations of any rate cuts coming at all this year.
Related content
- What Is Bitcoin Halving and Why Is It Important?
- Kiplinger's Economic Calendar
- Buy eBay and Sell Etsy, Morgan Stanley Says
-
Fed's Rate Cuts Could Have Impacts You Might Not AnticipateUnderstanding how lower interest rates could impact your wallet can help you determine the right financial moves to make.
-
Past Performance Is Not Indicative of Your Adviser's ExpertiseMany people find a financial adviser by searching online or asking for referrals from friends or family. This can actually end up costing you big-time.
-
I'm want to give my 3 grandkids $5K each for Christmas.You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
Past Performance Is Not Indicative of Your Financial Adviser's Expertise
Many people find a financial adviser by searching online or asking for referrals from friends or family. This can actually end up costing you big-time.
-
I'm a Financial Planner: If You're Not Doing Roth Conversions, You Need to Read ThisRoth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us? A Retirement Psychologist Makes the CaseA retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
I'm a Financial Adviser: This Is How You Can Adapt to Social Security UncertaintyRather than letting the unknowns make you anxious, focus on building a flexible income strategy that can adapt to possible future Social Security changes.
-
I'm a Financial Planner for Millionaires: Here's How to Give Your Kids Cash Gifts Without Triggering IRS PaperworkMost people can gift large sums without paying tax or filing a return, especially by structuring gifts across two tax years or splitting gifts with a spouse.
-
'Boomer Candy' Investments Might Seem Sweet, But They Can Have a Sour AftertasteProducts such as index annuities, structured notes and buffered ETFs might seem appealing, but sometimes they can rob you of flexibility and trap your capital.
-
AI Stocks Lead Nasdaq's 398-Point Nosedive: Stock Market TodayThe major stock market indexes do not yet reflect the bullish tendencies of sector rotation and broadening participation.
-
Got $100 to Gamble? These Penny Stocks Could Be Worth the RideVolatile penny stocks are high-risk plays with potentially high rewards. If you have $100 you can afford to lose, these three names are worth a look.
