Stocks were choppy to start Thursday, but gained speed in afternoon trading. While there was plenty for market participants to consider – including a fresh round of corporate earnings reports – most eyes were looking ahead to tonight's Apple (AAPL) earnings event and tomorrow's monthly jobs report.
After Wednesday's Fed-induced roller-coaster ride, the Dow Jones Industrial Average finished Thursday up 0.9% at 38,225 and the S&P 500 gained 0.9% to 5,064. The Nasdaq Composite outperformed, surging 1.5% to 15,840, thanks to Qualcomm's (QCOM) impressive earnings report.
In its fiscal second quarter, QCOM, which makes chips for smartphones, disclosed earnings of $2.44 per share on $9.4 billion in revenue. Analysts, meanwhile, anticipated earnings of $2.32 per share on $9.3 billion in sales. Results got a significant boost from Android sales in China, which were up 40% year-over-year. Qualcomm also reiterated the dividend hike it first announced in March.
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In the the earnings call, CEO Cristiano Amon said the company is creating an artificial intelligence (AI) ecosystem to commercialize generative AI applications across smartphones, PCs, automobiles and more.
"As AI expands rapidly from the cloud to devices, we are extremely well-positioned to capitalize on this growth opportunity, given our leadership position at the edge across technologies, including on-device AI," Amon added.
QCOM stock jumped 9.7% today, gaining $18 billion in market value along the way. This upside created a halo effect for fellow semiconductor stocks, including Micron Technology (MU, +2.4%) and Arm Holdings (ARM, +2.8%).
Peloton stock goes on wild ride after earnings, CEO exit
Elsewhere on the earnings calendar, fitness equipment maker Peloton Interactive (PTON) reported a wider-than-expected per-share loss in its first quarter, while revenue also missed estimates.
More notably, perhaps, was news that Barry McCarthy is stepping down as CEO, effective immediately, ending a troubled two-year tenure that saw shares lose 90% of their value. Peloton also said it will cut 15% of its global workforce to lower costs.
PTON stock was initially up on the news – jumping 18% at the opening bell – but quickly reversed course to end the day down 2.8%.
Apple stock climbs ahead of earnings
Drugmaker Moderna (MRNA, +12.7%) and Carvana (CVNA, +33.8%) were two notable post-earnings gainers, too. Still, it was Apple's fiscal Q2 results, released after Thursday's close, that Wall Street was most excited about.
Apple stock closed up 2.2% ahead of the release. Analysts, on average expect the iPhone maker to report earnings of $1.50 per share, down 1.3% year-over-year on revenue of $90 billion (-5% YoY).
"This anticipated drop follows the seasonal trend post-holiday quarter," say the folks at Toggle AI, an artificial intelligence market research firm. Attention is focused on slowing iPhone sales in China, while "investors are looking for updates on Apple's AI strategy and potential financial maneuvers, including a proposed $90 billion buyback and a 3% dividend hike," the researchers add.
April jobs report on deck
Another key event on investors' minds is tomorrow morning's release of the next jobs report. Economists are expecting the U.S. to have added 240,000 new jobs in April, down from the 303,000 added in March.
Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company, will be watching the labor force participation rate and wage growth. "A rise in labor force participation could help ease the current elevated wage pressures," Schutte wrote in his weekly commentary. "However, if the participation rate holds steady or declines, wage pressures are more likely to persist."
During yesterday's press conference, Fed Chair Jerome Powell noted that inflation has come down significantly in the past year and the labor market has remained strong, which is good news. However, he also said that in order to bring inflation down to its 2% target, which is a prerequisite for rate cuts, wage growth is one thing that "will probably" need to slow.
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