News
Technology drags stocks down as rally hits pause
U.S. stocks fell on Wednesday as investors tried to read the rate cut rules and assessed a new batch of earnings reports for insights into the chance of a U.S.-spurred corporate recovery.
The Dow Jones industrial average (^DJI) fell 0.1%, or about 50 points, while the S&P 500 (^GSPC) fell 0.4%. The high-tech Nasdaq Composite (^IXIC) fell by around 0.6%.
While stocks have posted a string of gains in recent days, the rally has lost steam as Federal Reserve policymaker Neel Kashkari signaled that rates will likely remain at historic highs for some time. Minneapolis Fed chief’s comment that a hike is also not out of the question dashed hopes for a previous easing of the policy that had been boosted by other Fed speakers. Fed officials Lisa Cook and Philip Jefferson are scheduled to speak on Wednesday.
Uncertainty over corporate profits also gave some investors pause as the season entered its final stretch. While technologies have mostly lived up to high expectations, the focus is now on whether other sectors can match.
On Wednesday’s agenda, Uber (UBER) forecast for a key booking metric missed the mark, dragging its shares down nearly 7%. Shopify (PURCHASE) shares plunged as much as 19% after the e-commerce platform predicted its slowest quarterly revenue growth Two years from now.
After Disney (DIS) hit the winnings but still disappointed Wall Street, Fox results (FOXA) are ready to attract attention. After hours, quarterly updates from AMC Entertainment (AMC) and Robinhood (HOOD) will be observed for signs of meme stock increase.
Live updates3
- Wednesday, May 8, 2024 at 4:13 pm GMT+2
Tesla Slips After DOJ Investigation Report
Tesla Stock (TSLA) fell nearly 3% on Wednesday morning after Reported by Reuters that U.S. prosecutors are investigating whether the automaker committed securities or wire fraud by “misleading investors and consumers about the autonomous driving capabilities of its electric vehicles.”
Reuters reported that the Justice Department is specifically investigating whether CEO Elon Musk and others misled drivers by suggesting that cars using Tesla’s Full Self-Driving system could drive themselves without any potential need for human intervention.
Stocks open lower, yields rise
U.S. stocks fell on Wednesday as investors tried to read the runes of the rate cut and assessed a new batch of earnings reports for insights into the chance of a U.S.-spurred corporate recovery.
The Dow Jones industrial average (^DJI) fell 0.1%, or about 50 points, while the S&P 500 (^GSPC) fell 0.4%. The high-tech Nasdaq Composite (^IXIC) fell by around 0.6%.
Meanwhile, the 10-year Treasury yield (^ TNX) rose from a three-week low to reach 4.49%.
Reddit Quarter, Digested
Lots to digest from Reddit (RDDT) quarter last night, but the stock’s 13% rise in premarket trading makes sense to me.
The company achieved adjusted operating profitability for the first time. Capital expenditure is extremely low compared to rivals like Meta (GOAL). International sales are accelerating. Comments from the advertising market were favorable. And the company is making important changes to how the platform works, which in part is helping its Google rankings.
I would add a tip to the Reddit executive team for starting their earnings call with questions from their community. Maybe this is a Boeing thing (BA) the management team should be doing…
