Stock market today: Fed cuts rates, Nasdaq surges as Nvidia and Amazon lead tech rally

Thu, Nov 7, 2024, 4:06 PM 1 min read

Meanwhile, the Dow Jones Industrial Average (^DJI) traded right around the flat line, on the heels of a 1,500-point gain that marked the blue-chip gauge’s best day since 2022. In bonds, a recent move higher in yields took a breather, with the 10-year Treasury yield (^TNX) falling about 8 basis points to 4.34%.

Spirits still appeared buoyant after Trump’s presidential election win, which sent all three major stock gauges soaring to fresh record highs on Wednesday. His plans for corporate tax cuts and deregulation have fueled optimism for a boost to the economy that will feed into stocks.

Powell was asked multiple times on Thursday about how an incoming Trump administration could impact the Fed’s path forward.

“In the near term, the election will have no effect on our policy decisions,” Powell said. When questioned whether he’d step down as Fed chair if asked to do so by Trump, Powell simply said “no.”

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The Magnificent Seven are at an all time high too

During a roaring rally over the past two sessions, much has been made about trades like financials that could benefit from President-elect Donald Trump’s policy.

But some of the market’s biggest movers this week have once again been from the market’s largest stocks. Roundhill’s Magnificent Seven ETF (MAGS) — which tracks Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) — hit a fresh record high on Thursday.

The index is up over 8% over the last five days, outperforming the S&P 500’s (^GSPC) 4.69%.
Powell won’t step down if Trump asks

Powell had a simple but poignant response when asked if he’d resign if President-elect Donald Trump asked him to step down.

“No.”
Stocks head for records post Powell press conference

All three of the major stock indexes were headed for record closes on Thursday as investors digested a subdued press conference from Federal Reserve Chair Jerome Powell.

The S&P 500 (^GSPC) rose roughly 0.9%, while the tech-heavy Nasdaq Composite (^IXIC) moved up more than 1.6% and shares of chip heavyweight Nvidia (NVDA) and e-commerce giant Amazon (AMZN) rose to new highs.

Meanwhile, the Dow Jones Industrial Average (^DJI) rose about 0.2% on the heels of a 1,500-point gain that marked the blue-chip gauge’s best day since 2022.

Each average moved higher as Powell’s presser ended.
Powell: No US president can demote or fire Fed chairs, governors

Powell dodged multiple political-focused questions during his press conference, which is unsurprising given that the election occurred less than 48 hours ago. It’s also not a surprise considering his contentious relationship with President-elect Donald Trump.

Trump, who frequently criticized Powell during his first term in office, had told Bloomberg in a July interview that he’d let the central bank leader serve out his term, “especially if I thought he was doing the right thing,” he said at the time.

But Trump has frequently flip-flopped his stance on Powell. Just a few months prior to the aforementioned Bloomberg interview, Trump said he would not reappoint the Fed chair, accusing the central bank leader of manipulating rates to give Democrats an edge in the election.

On Thursday, when asked if a sitting US president has the right to fire or demote a Fed chair or any of the Fed governors, Powell simply replied: “It’s not permitted under the law.”
One chart shows the progress on inflation the Fed is citing

The latest reading of the Fed’s preferred inflation gauge showed year-over-year price increases didn’t fall in September.

The core Personal Consumption Expenditures (PCE) index, which strips out the cost of food and energy and is closely watched by the Federal Reserve, rose 2.7% in September, above Wall Street’s expectations for 2.6% and in line with the 2.7% seen in August.

But during Thursday’s press conference Fed Chair Jerome Powell noted that the Fed also looks at the three- and six-month annualized rates of Core PCE to identify trends. Our chart below shows the three- and six-month annualized rates are at 2.3%.

Broadly, Powell said the data is showing “that we really have made significant progress.”
Powell says higher bond yields not driven by rising inflation expectations

Since the Fed began cutting interest rates, the 10-year Treasury yield (^TNX) rose roughly 80 basis points to hit a recent high of about 4.47%.

On Thursday, Fed Chair Jerome Powell said that move higher was likely not “principally about higher inflation expectations.”

He reasoned the move higher was more likely driven by better-than-expected economic growth.

Powell later added that for higher bond yields to impact Fed policy they would need to see “material changes in financial conditions that “last” and “are persistent.”

“We don’t know that about these what we’ve seen so far,” Powell said.
Powell: Election to have no effect on our policy decision

In a press conference that kicked off at 2:30 p.m. ET following the Federal Reserve’s latest policy decision, Fed Chair Jerome Powell addressed the election results, noting the central bank will not make decisions based on expected policy changes from a new administration.

“In the near term, the election will have no effect on our policy decisions,” he said. “We don’t know what the timing and substance of any policy changes will be. We, therefore, don’t know what the effects on the economy would be. Specifically, whether and to what extent those policies would matter for the achievement of our goal variables: maximum employment and price stability.”

Compared to the current Biden administration, Trump and his proposed policies have been viewed as more inflationary given his campaign promises of high tariffs on imported goods, tax cuts, and curbs on immigration.

“We don’t guess. We don’t speculate, and we don’t assume,” Powell continued, adding that it’s possible any administration’s policies or policies put in place by Congress could generate economic effects that the Fed would address at that time if deemed appropriate.
Fed cuts rates by quarter of a percentage point

In a widely anticipated move, the Federal Reserve cut interest rates by a quarter of a percentage point on Thursday.

After a half a percentage point cut in September, Thursday’s unanimous decision move brings the central bank’s benchmark rate down to a range of 4.5% to 4.75%.

Yahoo Finance’s Jennifer Schonberger reports:

This new cut was justified, according to the Fed’s Federal Open Market Committee, in support of its goals to maintain stable prices and full employment.

However, the central bank removed language from its policy statement that the “committee has gained greater confidence that inflation is moving sustainably towards 2%,” raising questions about the pace and number of future rate cuts.

Instead the policy statement read: “the Committee judges that the risks to achieving its employment and inflation goals are roughly in balance.”

Read more here.
Tech leads stocks into Fed decision

The Fed’s next policy decision is less than 30 minutes away. Here’s a look at where markets sit before Federal Reserve Chair Jerome Powell’s closely followed press conference at 2:30 p.m. ET.

The S&P 500 (^GSPC) was up 0.6%, while the tech-heavy Nasdaq Composite (^IXIC) moved up than 1.2% as shares of chip heavyweight Nvidia (NVDA) and e-commerce giant Amazon (AMZN) rose to new highs.

Broadly, Big Tech led the market action, with all of the “Magnificent Seven” tech stocks up more than 1% on the day, led by more than 3% pop in Meta (META).

In bonds, a recent move higher in yields took a breather, with the 10-year Treasury yield (^TNX) falling about 7 basis points to 4.35%.

Below is a look at the sector action for the day where Information Technology (XLK) is leading the way.
What to know ahead of the Fed decision

Yahoo Finance’s Jennifer Schonberger reports:

The Federal Reserve is expected to cut interest rates by 25 basis points Thursday and avoid any unnecessary surprises less than two days after the election of Donald Trump as the next president.

“They’d rather just cut, keep their heads down and not say anything all that new,” said Luke Tilley, chief economist for Wilmington Trust.

Still, that doesn’t mean the discussion today in Washington will necessarily be a smooth one.

Fed policymakers will have to make sense of recent data indicating a strong economy, persistent inflation, and a muddled jobs market disrupted by weather and worker strikes.

And there could be a debate between those who want to cut, those who could support a pause, and those who would support a cut combined with language designed to communicate a more gradual approach to future reductions.

Read more here.
Stock market ‘exuberance’ looms ahead with Trump win

The stock market’s feverish rally following Donald Trump’s presidential election victory may have just been an early appetizer for a strong few months of gains.

“Exuberance lies ahead,” Julian Emanuel, who leads the equity, derivatives, and quantitative strategy team at Evercore ISI, wrote in a note to clients Wednesday night. “President-Elect Trump will move fast on policy initiatives, and stocks will move fast in response.”

Emanuel, who already had a 6,000 call on the S&P 500 for 2024, now sees the S&P 500 hitting 6,600 by the end of June 2025, about an 11% increase from its current level. A “public reengaged in speculation,” as evidenced by Wednesday’s market action with bitcoin (BTC-USD) hitting 76,000 for the first time and Tesla (TSLA) stock soaring 14%, could help drive the benchmark index higher, per Emanuel.

Read more here.
Mortgage rates rise again amid election volatility

Yahoo Finance’s Claire Boston reports:

Mortgage rates rose for a sixth consecutive week, following Treasury yields as they climbed higher through the presidential election.

The average 30-year fixed-rate mortgage rose to 6.79% through Wednesday, up from 6.72% a week earlier, according to Freddie Mac data. The average 15-year fixed-rate mortgage was essentially unchanged, to 6% from 5.99%.

Mortgage rates typically mirror 10-year Treasury yields, which rose quickly in recent weeks as traders grew increasingly confident that former President Donald Trump would win Tuesday’s election and implement inflationary policies like tariffs.

Read more here.
Company leaders are preparing for Trump’s policy plans

About 24 hours after Donald Trump won the presidential election, American CEOs are already weighing on how the president-elect’s policies could impact their business.

For one, Trump’s proposed increases on tariffs are expected to weigh on retailers. On Wednesday, Steve Madden (SHOO) CEO Edward Rosenfeld said his company has been “planning for a potential scenario in which we would have to move goods out of China more quickly.”

“Our goal over the next year is to reduce that percentage of goods that we sourced from China by approximately 40% to 45%, which means that if we’re able to achieve that and we think we have the plan to do it, that a year from today, we would be looking at just over a quarter of our business that would be subject to potential tariffs on Chinese goods,” the shoemaker’s CEO said.

Trump’s presidency is also expected to be less restrictive on mergers and acquisitions. Warner Bros. Discovery (WBD) CEO David Zaslav said Thursday Trump’s second term could provide an opportunity for more consolidation in the media industry.

“We have an upcoming new administration, and it’s too early to tell, but it may offer a pace of change and an opportunity for consolidation that may be quite different,” Zaslav said on a call with analysts following the company’s third quarter results.
Homebuilder DHI hit with downgrade after Trump election win

Raymond James analysts on Thursday downgraded shares of DHI (DHI), saying that in the wake of Trump’s election win, they view mortgage rates staying “higher for longer” and constraining housing affordability.

The investment firm downgraded DHI to Market Perform from Outperform but kept the same price target at $195.00. It lowered its fiscal year 2025 EPS estimates to $13.25 from $15.80 and projects an EPS estimate of $15.00 in the fiscal year of 2026.

Due to “the near-term pressures we see on entry level homebuilders, whose core first-time buyers are likely to face even greater affordability challenges this spring,” Buck Horne, director at Raymond James & Associates, wrote in a note to clients.

“Coming out of a volatile October, DHI was already facing pressure from a more competitive inventory environment, rising rates, and buyers’ election anxiety,” Horne added.

The bearish call comes as DHI reported weaker-than-expected home orders for its fiscal fourth quarter as high mortgage rates dampened buyer affordability.
Netflix stock hits all-time highs

Netflix (NFLX) stock has surged to another all-time high as tech rallies after Donald Trump clinched victory over Kamala Harris in the presidential election.

The stock is currently trading above $790 a share and has climbed more than 60% since the start of the year, with 10% gains over the past month — far outpacing broader markets.

The moves higher extend beyond the recent Trump-fueled rally, however, as Netflix stands out among a list of battered media sector names.

The streamer has added more than 50 million paying subscribers since launching its password crackdown in May 2023. Its projected full-year operating margins are expected to hit 27%, with management hinting the company has the potential to eventually secure margins similar to broadcast networks, which historically have been in the range of 40% to 50%.

And in the first three quarters of 2024, Netflix pulled in roughly $6.9 billion in net income. Its competitors aren’t even close.

Disney (DIS) and Paramount Global (PARA) just reported their first quarter of profits in their respective streaming businesses earlier this summer. A shift for the industry, yes, but not a cure-all for the problems that have plagued traditional media, with Comcast (CMCSA) the most recent company to weigh spinning off its cable networks.

“Netflix is clearly running away with the ball and the media-based streaming companies are struggling to even get on the field,” Barton Crockett, managing director at Rosenblatt Securities, previously told Yahoo Finance.

Read more about Netflix’s dominance here and why analysts say it’s won the hard-fought streaming wars.
Lyft stock soars on earnings beat

Lyft (LYFT) shares soared more than 25% after its third quarter earnings beat expectations.

Lyft’s adjusted earnings per share of $0.29 were ahead of the $0.20 expected, while quarterly revenue of $1.5 billion beat Wall Street’s estimate of $1.4 billion, according to Bloomberg consensus estimates. Rides for the period ended Sept. 30 totaled 217 million, above the 213 million expected.

On Wednesday, Lyft announced partnerships with autonomous vehicle companies as it looks to secure a foothold in the burgeoning market, adding driverless cabs to its network in Atlanta in 2025. Wall Street analysts in notes to investors Thursday gave kudos to Lyft’s expansions beyond ride-hailing.

“LYFT is no longer a ride-hailing pure-play with it now embarking on partnerships in food delivery and AVs,” said RBC Capital Markets analyst and Lyft bull Brad Erickson. Lyft recently unveiled a partnership with DoorDash (DASH).

Still, analysts overall maintained Neutral ratings on the stock, with Wedbush analyst Scott Devitt, writing, “[W]e wait for clear evidence of a more sustainable growth trajectory for the business.”

Lyft shares are up 74% from last year but far below highs in the $60 range in 2021.
Bitcoin hovers near $76,000 per token as risk-on rally extends

Bitcoin (BTC-USD) briefly touched new highs just north of $76,000, extending gains from Wednesday’s monster rally following Donald Trump’s White House win.

The cryptocurrency jumped to new records on Wednesday and crypto-related stocks also rose following the presidential election results. Over the summer Trump promised to make the US the crypto capital of the world and form a ‘strategic bitcoin stockpile.’
Nvidia, Amazon extend gains to hover at record highs

Shares of AI chip heavyweight Nvidia (NVDA) and e-commerce giant Amazon (AMZN) each gained more than 1% on Thursday, extending gains from Wednesday’s monster rally following Donald Trump’s White House victory.

Both stocks closed at all-time record highs on Wednesday.

Earlier this week Nvidia surpassed iPhone maker Apple (AAPL) as the largest company in the world. The artificial intelligence chipmaker is expected to join the Dow Jones Industrial Average (^DJI) on Friday, replacing semiconductor giant Intel (INTC).

Meanwhile, Amazon stock has been in an upward trend after the company posted a stronger-than-expected quarterly result last week. On Thursday, shares were trading just above $210 each.
Earnings roundup: Moderna, WBD stocks surge on Q3 results, Hershey drops

Another batch of companies reported earnings Thursday morning.

Moderna (MRNA) jumped 5% at the market open as its earnings beat expectations partly thanks to better-than-anticipated COVID vaccine sales. Warner Bros. (WBD) jumped 10% thanks to streaming growth as Max subscribers soared. Meanwhile, Hershey (HSY) fell more than 1% after sinking as much as 3% premarket as high cocoa prices cut into its sales outlook for the year.

Here’s a closer look at how the companies performed:

Hershey: Adjusted earnings per share of $2.34 vs. $2.56 per share expected, revenue of $2.99 billion vs. $3.07 billion expected

Moderna: Earnings per share of $0.03 vs. a loss of $1.98 per share expected, revenue of $1.86 billion vs. $1.25 billion expected

Warner Bros.: Adjusted earnings per share of $0.05 vs. a loss of $0.12 per share expected, revenue of $9.62 billion vs. $9.81 billion expected

Meanwhile, energy companies traded flattish after showing mixed results as natural disasters impacted some of their businesses. Duke Energy (DUK) saw its profits hit by hurricane costs, while Pacific Gas & Electric (PCG) missed on revenue just as it shut off power in Northern California amid fire risks. Nuclear power provider Vistra soared 11% after an earnings beat as it recovers from earlier losses.
Stocks extend gains after Trump rally and ahead of Fed decision

Stocks extended their gains on Thursday following a monster rally on the heels of Donald Trump’s White House victory. The move higher in stocks comes ahead of the Federal Reserve’s interest rate decision.

The Dow Jones Industrial Average (^DJI) inched up 0.1% while the S&P 500 (^GSPC) rose roughly 0.3%. The tech-heavy Nasdaq Composite (^IXIC) moved up 0.5% after all three major averages closed at record highs on Wednesday.

As Yahoo Finance’s Jennifer Schonberger reports, the Federal Reserve is expected to cut interest rates by 25 basis points and avoid any unnecessary surprises after the election of Trump as the next president.

Meanwhile, parts of the “Trump Trade” showed some signs of unwinding on Thursday as Trump Media & Technology Group stock (DJT) sank by double digits, reversing the gains it enjoyed in the prior session.