After Fed Day decline, stock prices gradually rise on the back of big tech boom

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U.S. stocks edged higher on Thursday after the worst decline in months on Wall Street as investors rescheduled interest rate cuts by the Federal Reserve and braced for big earnings for large tech stocks.

The benchmark S&P 500 Index (^GSPC) rose 0.8%, and the blue-chip Dow Jones Industrial Average (^DJI) rose 0.6%. The tech-heavy Nasdaq Composite Index (^IXIC) fell more than 2% on Wednesday, but rose almost 1%.

The financial world has been moving fast and furious this week, and the Fed continued to be in the spotlight Thursday morning. Federal Reserve Chairman Jerome Powell solidified the central bank’s interest rate plans while warning investors who are looking for a quick rate cut. He hinted that he was unlikely to start lowering rates at the Fed’s next meeting in March, although earlier this week it was seen as primarily a rate cut.

In fact, while investors are pricing in a roughly two-thirds chance of another rate cut at the March meeting, nearly all bets are on a small or larger rate cut in May, according to the CME FedWatch tool. I’m betting that it will happen.

Meanwhile, after the closing bell, members of the Magnificent Seven will take center stage, with Apple (AAPL), Amazon (AMZN), and Meta (META) scheduled to report their financial results. The first round of Big Tech earnings for Microsoft (MSFT) and Alphabet (GOOGL, GOOG) released on Tuesday failed to meet investors’ high expectations, contributing to the decline in their stock prices.

Lest we forget, the economic world has one more data point waiting to fuel the story this week. Investors will get an overview of the job market in January with Friday’s nonfarm payrolls report.

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Thursday, February 1, 2024 11:48 PM (GMT+5:30)

Mortgage interest rates fall further below 7%

Mortgages fell for the second time in 2024, according to new data released Thursday.

Yahoo Finance’s Rebecca Chen reports:

The US housing market will experience a warm recovery this spring thanks to calming economic indicators.

The average interest rate on a 30-year loan fell to 6.63% from 6.69% the previous week, Freddie Mac announced Thursday. Mortgage rates are expected to fall for the second time in 2024 and fall further as inflation slows, which could trigger a housing rebound.

With most indicators pointing to interest rate cuts next year, housing experts expect lower mortgage rates to return supply and demand to the housing market, setting off the spring busy season in the coming months.

“As long as core inflation and economic activity remain moderate, mortgage rates will not rise further,” said Orpheus Divongi, senior macroeconomist at Zillow. “If layoffs remain low and mortgage rates ease, housing market activity should pick up modestly this spring, meaning more properties will be on the market and sales will increase.”
Thursday, February 1, 2024 10:20pm (GMT+5:30)

Amazon stock rises ahead of earnings announcement

Amazon (AMZN) stock rose more than 1% Thursday ahead of the e-commerce giant’s quarterly earnings release after the bell.

As Yahoo Finance’s Hamza Shaban reports, the Seattle-based company joins two fellow $1 trillion giants in capping off a week defined by high expectations and disappointments for technology-related results.

Amazon’s move in response to a flurry of Big Tech reports will provide the latest information on AI development and lucrative cloud businesses.

Here’s a breakdown of what analysts expect from the company’s future performance.
Thursday, February 1, 2024 9:33 PM GMT+5:30

Peloton stock falls 22% on weak guidance

Peloton (PTON) stock fell 22% on Thursday and was on track to close at an all-time low after the connected fitness platform reported disappointing earnings guidance.

The company expects third-quarter sales to be in the range of $700 million to $725 million, below Wall Street’s estimate of $753.8 million.

“While we continue to outperform the connected fitness market, our biggest challenge continues to be growth at scale,” the company’s letter to shareholders released Thursday said.

Peloton has partnered with Amazon (AMZN) and LuluLemon (LULU) as part of its growth efforts.

The interactive bike maker’s stock price is a far cry from its pandemic highs, when customers were clamoring for home exercise equipment. After the lifting of the national lockdown and some voluntary recalls of hardware, user growth began to slow.
Thursday, February 1, 2024 8:51 PM GMT+5:30

Big Tech leads rebound after Fed Day decline

Big tech stocks led Thursday’s rally after selling heavily in the premarket after the Federal Reserve kept interest rates on hold, delaying investors’ expectations for rate cuts.

The S&P 500 Technology Sector ETF (XLK) rose 0.9%, with communications services and consumer discretionary stocks also rising.

E-commerce giant Amazon (AMZN) and social media platform Meta (META) each rose about 2% on Thursday. Both companies, along with iPhone maker Apple (AAPL), are scheduled to release quarterly results after the closing bell.

The S&P 500 Index (^GSPC) rose 0.5% on Thursday. The Nasdaq Composite Index (^IXIC) rose 0.7% after falling more than 2% on Wednesday.

Nasdaq 100 heatmap as of 10:15 a.m. ET on February 1st.
Thursday, February 1, 2024 8:01 PM GMT+5:30

Stock prices rise little by little after the sharp decline, and Big Tech’s profits further increase

Stocks rose slightly on Thursday after the Federal Reserve indicated investors would have to wait beyond March before cutting interest rates.

The S&P 500 (^GSPC) rose slightly, but the Dow Jones Industrial Average (^DJI) remained flat. The Nasdaq Composite Index (^IXIC) opened 0.6% higher after falling more than 2% on Wednesday.

More Big Tech earnings are on the horizon after the closing bell on Thursday, with Apple (AAPL), Amazon (AMZN) and Meta (META) set to report quarterly results.

Microsoft (MSFT) and Alphabet (GOOGL, GOOG) earnings results released earlier this week failed to meet investors’ high expectations. Alphabet stock fell more than 7% on Wednesday.
Thursday, February 1, 2024 7:15 PM GMT+5:30

Layoffs announced in January increased but also decreased.

According to the January job cuts report released by staffing firm Challenger, Gray & Christmas on Thursday morning, the number of job cuts announced in January was on the rise compared to December, but it was more pronounced than a year ago. has decreased to

The company announced 82,307 job cuts last month, an increase of 136% compared to December, but a 20% decrease compared to the 102,943 job cuts announced this month last year.

However, although it was down from last year’s total, the number of layoff announcements in January 2024 was the third highest for any January since 2009.

The number of new jobless claims announced Thursday also showed a slight increase in first-time jobless claims, with a total of 224,000 claims filed last week, up from 9,000 the week before.

Still, this overall level of initial claims remains near historic lows.

Both reports were released ahead of Friday’s January jobs report and follow comments by Fed Chairman Jerome Powell on Wednesday, who said labor market balances continued to improve.

However, Powell noted that the supply of available workers remains lower than the overall demand for jobs, meaning there are multiple jobs for every person currently seeking work.