Joey Solitro
Stocks opened higher Thursday following the latest inflation data but didn't stay there for long. A late-afternoon speech from Federal Reserve Chair Jerome Powell failed to reignite sentiment, with all three main benchmarks closing the day in the red.
Ahead of the opening bell, the Bureau of Labor Statistics said the Producer Price Index (PPI), which measures what businesses are paying subscribers for goods, increased 0.2% month over month in October. Year over year, the headline PPI was up 2.4% – the quickest pace since July.
Core PPI, which excludes food and energy prices, rose 0.3% on a monthly basis and 3.5% year over year.
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.
"We should expect a bit more volatility in producer prices, especially as businesses manage supply chains amid the risk of tariffs," says Jeffrey Roach, chief economist for LPL Financial.
The impact of tariffs on consumers "vary widely and are industry-specific as businesses often apply for exclusions or bear part of the costs," he adds. "Consumer prices actually decelerated down to 1.7% in late 2019 after businesses adjusted to the trade war with China."
Powell's in no hurry to rush rate cuts
In a late-afternoon panel discussion in Dallas, Fed Chair Powell said the central bank is in no hurry to rush rate cuts.
The Federal Open Market Committee (FOMC) has lowered the federal funds rate by 75 basis points since September to a target range of 4.50% to 4.75%. But today, Powell said that economic data "is not sending any signals that we need to be in a hurry to lower rates."
Rather, the strength in the economy "gives us the ability to approach our decisions carefully," he added.
The next Fed meeting occurs in mid-December and futures traders are pricing in a 62% chance for a quarter-point rate cut, according to CME Group's FedWatch Tool.
SMCI keeps sliding on delisting concerns
In single-stock news, Super Micro Computer (SMCI) stock continued to slide after the company delayed the filing of its quarterly report – sparking delisting fears. The Securities and Exchange Commission (SEC) requires publicly traded companies to file annual reports to maintain their listings on U.S. stock exchanges, which SMCI has yet to do for its year ended June 30, 2024.
SMCI has until November 16 to file or submit a plan to the Nasdaq Stock Exchange to regain compliance with its listing rules or face potential delisting, according to Barron's.
Shares of the AI server, software and infrastructure firm plunged 11.4% today, bringing their six-month loss to 77%.
Cisco slips despite beat-and-raise quarter
Cisco Systems (CSCO) stock fell 2.1% even after the networking equipment specialist reported higher-than-expected fiscal first-quarter results and raised its full-year forecast.
Still, Wall Street remains bullish on Cisco. "Cisco reported solid results and guidance, bolstered by depleted customer inventory and positive artificial intelligence (AI) commentary," says Jefferies analyst George Notter, who has a Buy rating on the blue chip stock and raised his price target to $66 from $53.
"Margins are looking good too as the company continues to manage costs tightly," Notter notes, adding that he believes "the risk/reward in the shares is tilted positively."
Disney tops the Dow after earnings
Looking elsewhere on the earnings calendar, Walt Disney (DIS) soared 6.2%, making it the best Dow Jones stock today, after the media and entertainment giant disclosed its quarterly results.
DIS said fiscal fourth-quarter earnings jumped 39% year over year to $1.14 per share while revenue was up 6% to $22.6 billion – more than analysts were expecting. The company also posted modest subscriber growth for both its Disney+ Core and Hulu streaming segments and issued a strong outlook for fiscal 2025.
"With a strong lineup of beloved intellectual property in the works, Disney's content pipeline is looking particularly robust," says Third Bridge analyst Albie Amankona. The company's upcoming releases, including "Moana 2," highlight its strategy of leaning into fan-favorite franchises, Amankona adds. "This approach maximizes cross-platform monetization, creating synergy across streaming, theaters, and the parks."
Tesla sinks after Trump's EV tax credit proposal
Elsewhere, Tesla (TSLA) surrendered a portion of its election-inspired gains after a Reuters report indicated President-elect Donald Trump's transition team is planning to end the $7,500 electric-vehicle tax credit.
In Tesla's second-quarter earnings call, CEO Elon Musk said that ending the EV tax credit "would be devastating for our competitors," but only "slightly" for Tesla. He added that doing so "probably actually helps Tesla" over the long term.
The mega-cap stock slumped 5.8% today, but remains nearly 25% higher for the month to date.
As for the main indexes, the Dow Jones Industrial Average fell 0.5% to 43,750, the S&P 500 shed 0.6% to 5,949, and the Nasdaq Composite surrendered 0.6% to 19,107.
Related content
- Why Is Warren Buffett Selling So Much Stock?
- Roth 401(k) vs. 401(k): Which Is Right for You?
- Should You Buy Tesla Stock After Trump's Election Win?
-
Alphabet Stock Pops After Google Antitrust Ruling: What to KnowGOOGL stock is soaring Wednesday after a judge ruled that Alphabet does not have to divest its Chrome browser.
-
7 Mistakes to Avoid When You First Start InvestingInvesting brings the opportunity to build wealth, but there are plenty of mistakes that can be made. Here are seven common ones and how they can be avoided.
-
Alphabet Stock Pops After Google Antitrust Ruling: What to Know
GOOGL stock is soaring Wednesday after a judge ruled that Alphabet does not have to divest its Chrome browser.
-
7 Mistakes to Avoid When You First Start Investing
Investing brings the opportunity to build wealth, but there are plenty of mistakes that can be made. Here are seven common ones and how they can be avoided.
-
A Fidelity Fund Misses Out on Soaring Bank StocksThe Fidelity International Growth Fund has outperformed over the long term, but its lagging exposure to bank stocks has weighed on more recent returns.
-
More Than Money: The Hidden Toll of Financial Abuse of Older AdultsFinancial abuse from schemes involving tech support, government impostors, false sweepstakes, grandchild hoaxes and online shopping issues can cause thousands of dollars in losses.
-
I'm a Financial Planner: Here Are Three High-Impact Ways to Make a Difference With Your DollarsThe world often feels out of control, but here are three ways to use your money — through investments, charitable giving and political donations — to help create a more just and sustainable future.
-
Stocks Slide to Start September: Stock Market TodaySeasonal trends suggest tough times for the stock market as we round into the end of the third quarter.
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
Where is the Foreign Dividend Boom Headed?It's been a golden six months for foreign dividend stocks, but can any be relied on for predictable income going forward? Here are some options.
