Stocks were mostly lower on Friday after rallying to record highs yesterday on the Fed’s supersized rate cut earlier in the week.
The Dow Jones Industrial Average, which closed at a record yesterday, was flat. The S&P 500 slid 0.3% from its record high yesterday, and the Nasdaq Composite, about 4% off its all-time high, also declined 0.3%.
Shares of Nike (NKE) jumped after the athletic apparel giant announced company veteran Elliott Hill will take over as CEO on Oct. 14, replacing John Donahoe after four tumultuous years in the role. FedEx (FDX) stock tumbled after it missed quarterly earnings estimates and slashed its full-year outlook.
Wall Street on Friday was bracing for triple-witching, the simultaneous expiration of trillions of dollars worth of options and futures contracts at the end of the session. Markets could see unusual volume and volatility throughout the day, especially in its final hour.
Stocks soared yesterday, with the S&P 500 and Dow both closing at records, after the Federal Reserve cut its benchmark interest rate by 50 basis points, an above-average cut and one that’s expected to be the first of several over the next year.
While Fed Chair Jerome Powell cautioned against assuming jumbo cuts would be the norm, market participants are nonetheless expecting officials to continue aggressively cutting rates this year to support a cooling labor market. The implied odds of there being at least one more 50-point cut this year were nearly 70% on Friday, according to federal funds futures trading data.
Gold climbed to a record high as investors doubled down on their bets for more rate cuts. International markets were mixed. European stocks traded in the red on Friday, while Japanese equities climbed for a second straight day, helped by a weakening yen.
What Today’s Triple-Witching Means For You
22 minutes ago
Stocks were trading in the red heading into the final hour of September’s triple-witching.
“Triple witching” refers to the simultaneous expiration of stock options, index options, and index futures contracts. It occurs four times a year—on the third Fridays of March, June, September, and December—and can be known to trigger sharp price movements as traders close out or extend existing positions.
Triple-witching days often coincide, as is the case Friday, with S&P index rebalancing, which generates additional trading volume and can contribute to volatility. Palantir (PLTR) and Dell (DELL) will join the benchmark S&P 500 after Friday’s close; so will insurance company Erie Indemnity (ERIE). Those stocks and the ones they’re replacing—American Air Lines (AAL), Etsy (ETSY), and Bio-Rad Laboratories (BIO)—could see high volume on Friday as funds tracking the index buy and sell shares.
But for the majority of long-term buy-and-hold investors, the volatility exhibited on triple-witching days shouldn’t be ominous. Unusual price movements are often short-lived and, because investors know triple-witching is happening, turbulence is unlikely to materially change market sentiment.
Triple-witching is of greatest concern to active traders whose derivatives are expiring. The last hour of the session, the triple-witching hour, brings a flurry of activity that can affect liquidity. Sometimes the dynamics of triple-witching result in a less liquid market for a certain security, which increases spreads and creates opportunities for arbitrage, in which a trader exploits price differentials between markets.
Lennar Stock Drops on Disappointing Outlook
59 minutes ago
Lennar (LEN) shares dropped Friday despite stronger-than-expected quarterly results as the homebuilder’s guidance left investors uninspired.
The company said it expects its fiscal fourth-quarter gross margin on home sales to hold flat quarter-over-quarter at 22.5%, below the analyst consensus from Visible Alpha. It expects between 19,000 and 19,300 new home orders and an average sales price of $425,000, in line with Street estimates.
Lennar beat expectations for the third quarter ended August 31, posting revenue that grew 9% year-over-year to $9.4 billion. Earnings per diluted share rose $4.26, while new orders improved 5%.
CEO Stuart Miller pointed to an improving environment for homebuilders. Several homebuilder stocks rose Thursday, climbing following the Federal Reserve’s decision to cut rates, which is expected to lead to lower mortgage rates.
Lennar shares were down more than 4% Friday afternoon. They have gained about 23% year-to-date.
Trump Media & Technology Stock Continues to Fall
1 hr 50 min ago
A rough week for shares of Truth Social’s parent company continued Friday.
Shares of Trump Media & Technology (DJT), the company majority-owned by former President Donald Trump, were recently down more than 4%, trading around $14 per share after finishing last week near $18.
The stock is falling as investors digest the possibility that Trump or other company insiders and investors could begin selling shares following the expiration of lock-up agreements that prohibited them from doing so. Trump in an interview last week said, “I’m not going to sell my shares.”
Selling by major shareholders would likely exert further downward pressure on a stock that earlier this year changed hands at around $70, soaring shortly after Truth Social’s then-parent merged with a blank-check company.
Trump Media was as of Thursday the worst-performing stock in the Russell 1000 since Aug. 5, according to Bespoke Investment Group. The index, which represents the largest 1,000 U.S. companies by market capitalization, has broadly risen during that time.
Constellation Energy Stock Jumps on Plan to Restart Three Mile Island Site With Microsoft
2 hr 46 min ago
News that Constellation Energy (CEG) plans to bring Pennsylvania’s Three Mile Island out of mothballs to provide “clean” energy for Microsoft (MSFT) sent Constellation’s shares to an all-time high on Friday.
The power utility announced a 20-year agreement with the software giant to create the Crane Clean Energy Center, which involves restarting the Three Mile Island Unit 1 that was shuttered five years ago. The adjacent Unit 2 was shut down in 1979 after a malfunction caused a partial core meltdown, which led to significant changes in the nuclear power industry.
The agreement will have Microsoft buying electricity from Unit 1 as part of its effort to help provide carbon-free energy to its data centers on the Pennsylvania-New Jersey-Maryland power transmission system. Financial details were not disclosed.
Constellation said it would spend approximately $1.6 billion, including the cost of nuclear fuel, to restart the plant, the reopening of which is scheduled for 2028.
With today’s 16% gain, shares of Constellation Energy have more than doubled this year. Microsoft shares were recently lower as tech stocks retreated following big Thursday gains.
Tech Stocks Hit the Brakes on Fed-Fueled Rally
3 hr 38 min ago
Tech stocks pulled back in early trading Friday, hitting the brakes on the market’s rally in the wake of the Federal Reserve’s supersized rate cut this week.
The S&P 500 was down about 0.5% after hitting record highs Thursday, with the energy and industrials sectors leading broad-based declines and its tech sector down about 0.6%. The tech-heavy Nasdaq fell 0.6%.
Semiconductor stocks including Onsemi (ON), ASML (ASML), and NXP Semiconductors (NXPI), were among the stocks leading losses on the major indexes, pulling the PHLX Semiconductor Index down 2%.
The Magnificent 7 stocks were mixed. AI darling Nvidia (NVDA), Amazon (AMZN), Microsoft (MSFT), and Tesla (TSLA) lost ground, while Meta Platforms (META) and Alphabet (GOOGL) were slightly higher. Apple (AAPL) advanced as its iPhone 16 hit stores.
Some analysts have suggested this week’s cut could set the stage for tech stocks to gain over the last few months of the year and into next year, with Wedbush analysts writing yesterday that “the green light is back on for the tech growth trade.”
FedEx Stock Slumps After Shipper Slashes Full-Year Outlook
4 hr 25 min ago
FedEx (FDX) shares tumbled more than 15% on Friday after the company missed analysts’ estimates with its fiscal first-quarter results and slashed its full-year outlook.
The shipping company posted first-quarter earnings per share (EPS) of $3.21 on revenue of $21.6 billion, both of which missed analysts’ expectations compiled by Visible Alpha.
CEO Raj Subramaniam called the period a “challenging quarter,” hindered by higher operating expenses and weaker demand for priority shipping services.
FedEx said it now anticipates year-over-year revenue growth in the low single digits, down from a low-to-mid single digit increase. It expects EPS of between $17.90 and $18.90, down from $18.25 to $20.25. The midpoint of the revised range came in below the analyst consensus of $19.80.
Price Levels To Watch as Nike Shares Jump on CEO Shake-up
5 hr 28 min ago
Nike (NKE) shares jumped nearly 8% in early trading Friday after the world’s largest athletic apparel and equipment company announced Elliott Hill will replace John Donahoe as CEO in a leadership shakeup aimed at reviving sluggish sales.
After gapping to a multi-year low in June on disappointing fiscal fourth-quarter results, Nike shares carved out a triple bottom, a sign of a potential price reversal.
Amid Friday’s rebound, investors should watch four overhead levels on Nike’s chart likely to attract attention.
To start, it’s worth monitoring the $85 area. Although the stock traded above this level on Friday morning, the region remains in play given its proximity to a key multi-month trendline connecting prices around the October 2022 swing low and August 2024 swing high.
A close above this level could see the shares move to $89, a location on the chart where investors may look to lock in profits near two prominent troughs that formed on the chart between September 2023 and April this year.
Further upside may fuel a rally up to the $96 level, where the shares could run into overhead resistance near a horizonal line linking the late September 2022 pre-gap low with multiple peaks and troughs over the past two years.
A bullish longer-term move could lead to a retest of the $104 level, where the stock would likely encounter selling pressure near a trendline joining an array of price points stretching between early September 2022 and February this year.
Stock Futures Little Changed After Rate Cut Rally
6 hr 28 min ago
Futures contracts connected to the Dow Jones Industrial Average were flat in premarket trading on Friday.
S&P 500 futures were off about 0.1%.
Nasdaq 100 futures were also down just 0.1%.
