Stock market today: Nasdaq leads stock declines as Nvidia, chip stocks sell off

1 month ago

Updated Tue, Oct 15, 2024, 1:15 PM 2 min read

As the rush of earnings starts to broaden out, hopes are for further positive surprises in what some on Wall Street suspect could be a tricky season. Shares in Walgreens Boots Alliance (WBA) finished the day up around 15% on the heels of its plan to shut 1,200 stores over three years, as the pharmacy chain pursues a turnaround.

Outside of earnings, energy was another major focus. Oil prices tumbled roughly 4% on a report that Israel is prepared to refrain from bombarding Iran's crude and nuclear facilities in its response to an attack two weeks ago. West Texas Intermediate crude futures (CL=F) sank to just under $71 a barrel, while Brent crude futures (BZ=F) fell to around $74.50 following the Washington Post report.

Yahoo Finance Morning Brief

LIVE 15 updates

United Airlines Q3 earnings beat expectations

United Airlines (UAL) reported third quarter financials after the bell on Tuesday that showed revenue and earnings that topped Wall Street expectations, sending shares about 1% higher in after-hours trading.

Adjusted earnings per share came in at $3.33, while revenue rose 2.5% year over year hit $14.84 billion in the quarter.

The airliner also announced its first stock buyback since before the pandemic. It plans to purchase $1.5 billion worth of shares.

"I appreciate the entire United team coming together to take care of our customers by operating a safe and on-time airline this summer," United Airlines CEO Scott Kirby said in the earnings release.

"As predicted, unproductive capacity left the market in mid-August, and we saw a clear inflection point in our revenue trends that propelled United to exceed Q3 expectations," he added. "A prosperous summer 2024 is just the beginning as our improved customer experience combined with United Next positions the airline at the top of the industry for the foreseeable future."
Nasdaq leads stocks lower

US stocks closed in a sea of red on Tuesday, led by the tech-heavy Nasdaq Composite (^IXIC), which was dragged down by chipmakers including Nvidia (NVDA) and ASML Holding (ASML).

The Nasdaq Composite sank around 1%, while both the Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) each dropped roughly 0.8% to fall from their previous all-time highs.
History says this economic expansion is still young

On Tuesday, in speech titled "Landing Softly Is Just the Beginning," San Francisco Federal Reserve president Mary Daly called on a chart that showed the post-pandemic economic expansion could have room to run further.

At this point, the current economic expansion has been underway for 54 months, well short of the expansions that were seen starting in 1982, 1991, 2001 and 2009.

While speaking at New York University on Tuesday, Daly noted that the Fed's work to achieve a "soft landing" isn't fully done, but the trajectory of the economy after inflation falls to 2% will remain just as important.

"We must strive for a world where people aren't worried about inflation or the economy," Daly said.

Daly added, "No matter which expansion you look at...the message is the same. Sustained expansion helps all Americans."

This speaks to the growing conversation following the hot September jobs report about whether or not further economic expansion could impact the Fed's fight against inflation.

Daly told Yahoo Finance that a pickup in labor market data isn't necessarily inflationary in of it itself.

"That's a fear more than a fact," Daly said.

For now, her check-ins with firms reveal that consumers are less willingly to pay higher prices and customers are continuing to trade down and look for value. This would point to an economy that's still seeing consumers spending, but not necessarily one that's fueling a resurgence in inflation.

"This is not an environmental firms are looking to raise prices," Daly said. "They're looking to grow, but they're not looking to raise prices."
DJT stock briefly halted for trading after sudden plunge

Trading in Trump Media & Technology Group stock (DJT) was briefly halted on Tuesday due to volatility.

Shares in the company, the home of the Republican nominee's social media platform Truth Social, suddenly plunged around 5% in late afternoon trading after extending previous gains by more than 13% earlier in the session.

It is unclear what exactly caused the abrupt drop in share price, although it was an incredibly high-volume trading session.

The former president spoke with Bloomberg News at the Economic Club of Chicago earlier in the day. He argued for more US tariffs, calling 'tariff' the "most beautiful word in the dictionary."
Netflix reports earnings later this week. Here's what to expect.

It's a big earnings week for markets, with United Airlines (UAL), Morgan Stanley (MS), and Netflix (NFLX) still left to report quarterly results.

Netflix, set to report after the market close on Thursday, will have a high bar to overcome as the stock trades near record highs and analysts predict another price hike across its various streaming tiers.

Netflix is expected to report earnings of $5.16 per share on revenue of $9.78 billion, according to Bloomberg consensus estimates. This would represent nearly 40% earnings growth compared to the prior year.

Investors have praised the company's foray into sports and live events. Meanwhile, its ad tier continues to gain traction. Shares have soared as a result, with the stock up about 45% since the start of the year.

Last week, the stock secured another all-time closing high of around $730 a share. It's since retreated to trade closer to $710 a share. But the recent run-up has led to some apprehension on Wall Street.

"We expect Netflix’s stock to trade higher on a US price hike announcement," Citi analyst Jason Bazinet wrote in a note to clients. "But we would expect shares to eventually trade lower as investor’s hopes for $25 in 2025 EPS are dashed."

For the full year, Netflix's earnings are projected to rise about 60% year over year to $19.10 per share, while full-year revenue of $38.75 billion would mark an increase of about 15% on a yearly basis.

In 2025, analysts anticipate full-year earnings to rise to $23 with revenue jumping to $43.46 billion.
UBS sees S&P 500 reaching 6,400 by end of 2025

Wall Street strategists keep growing more bullish on the stock market rally.

In a note to clients on Tuesday, UBS Investment Bank equity strategist Jonathan Golub boosted his year-end target for the S&P 500 (^GSPC) in 2024 and 2025. Golub now sees the benchmark index ending this year at 5,850, from a prior target of 5,600. In 2025, Golub projects the S&P 500 will end the year at 6,400, up from a prior target of 6,000.

Golub notes the economic backdrop is "supportive," with growth data proving resilient, the Federal Reserve cutting interest rates, and recession risk falling by the wayside. He sees further upside for the benchmark index as inflation falls, providing room for further easing from the Fed.

Golub added that given the positive backdrop, in an upside scenario, small-business activity should "improve" this, leading to "broad-based profit strength, loan performance and credit spreads driving valuations higher."
Apple stock notches new intraday record, adding to lead over Nvidia

Apple (AAPL) stock hit a new intraday high of $237.49 on Tuesday, eclipsing its prior record of $237.23 on July 15. The stock's climb added about $70 billion to its market capitalization, putting it further ahead of Nvidia (NVDA) as the world's most valuable company after Nvidia's gains jeopardized the iPhone maker's lead.

The stock pared gains after notching the record, gaining about 1.5% in afternoon trading. Meanwhile, Nvidia fell around 4%.

Apple's upward move comes a day after preliminary data showed rising demand for iPhones in the third quarter. Global iPhone shipments rose 3.5% from last year, according to the International Data Corporation (IDC).

"While the growth of the Chinese players in emerging markets has been an ongoing theme this year, Apple also enjoyed a 3.5% YoY growth in shipments this quarter fueled by strong demand from the previous models and the launch of the new iPhone 16 lineup," said Nabila Popal, IDC's data & analytics senior director, in a statement Monday.

"Despite the staggered rollout of Apple Intelligence in markets outside the U.S., Apple will continue to grow in the upcoming holiday season," she added.

Apple released its new iPad mini, which is equipped to run its suite of AI features, on Tuesday.

Apple is set to report earnings Oct. 31, and Wall Street analysts tracked by Bloomberg expect earnings to rise 9% from last year to $1.59 per share. Some 40 analysts recommend buying the stock, while 19 have a Hold rating and two recommend selling shares, according to Bloomberg data. Apple shares are up 32% from last year, and analysts see the stock rising further to over $245 over the next 12 months, Bloomberg data shows.
Nvidia stock falls from record close on report of potential US export cap, ASML's dismal earnings report

Nvidia (NVDA) shares sank more than 5% Tuesday, partially reversing its two week-rally and coming down from a record close the day before.

The stock's tumble comes after a Bloomberg report that Biden administration officials are considering capping US chip exports to certain countries. Citing unnamed sources, Bloomberg reported that potential regulations would focus on Persian Gulf countries in the interest of national security. The stocks of fellow chipmakers Advanced Micro Devices (AMD) and Intel (INTC) also fell, responding to the Bloomberg report and a dismal earnings report from semiconductor supplier ASML (ASML).

Nvidia stock has been more volatile since its 10-for-1 stock split in June, and news of heightened trade tensions focused on the AI chip sector — which Nvidia leads — have pushed shares down various times over the past two years. For example, Nvidia shares experienced a similar decline this time last year — when the Biden administration tightened export controls on US chips — before extending its historic rally.

Nvidia shares are up around 191% from last year.
Chip stocks lead declines

A surprise earnings report from ASML Holding (ASML) sent stocks lower across the board on Tuesday.

Shares of the leading semiconductor supplier sank around 15% after its earnings, released in an apparent error, showed a disappointing sales outlook for 2025. Nvidia (NVDA) shares fell in tandem, dropping around 4% to slip back from their freshly minted high. AMD (AMD) stock dropped 4%.

The moves erased prior gains of the tech-heavy Nasdaq Composite (^IXIC), which fell around 0.8%. As a result, the tech sector was one of the biggest laggards of the day, down nearly 2%.
Oil tumbles 5% on report Israel won't target Iranian crude, IEA predicts supply glut

Oil tumbled as much as 5% on Tuesday as supply fears faded after a media report signaled Israel would avoid targeting Iran’s petroleum production. A glut of supply forecasted by the International Energy Agency also weighed on prices.

West Texas Intermediate (CL=F) dropped to hover near $70 per barrel, while Brent (BZ=F), the international benchmark price, fell below $74.

Prices declined after a Washington Post article stated Israeli Prime Minister Benjamin Netanyahu told the Biden Administration Tel Aviv would avoid targeting Iran’s nuclear and oil facilities when it retaliates for the ballistic missile attack earlier this month.

"Overall right now, its a bit of a bearish outlook for oil given china's economy and given Middle East tensions aren't escalating at this moment," GasBuddy head of petroleum analysis Patrick De Haan told Yahoo Finance on Tuesday morning.
Boeing stock edges up as the plane maker moves to issue new shares and raise up to $25 billion

Boeing stock edged up close to 0.4% after filing paperwork with the US Securities and Exchange Commission Tuesday to issue shares of debt securities and common stock worth up to $25 billion over the next three years in a bid to generate much-needed cash.

Separately, the aircraft manufacturer said Tuesday that it has entered a $10 billion credit agreement.

Boeing has had a chaotic year, beginning with a Jan. 5 incident in which an airplane part called a door plug blew off of one of its 737 Maxes — and set off a series of regulatory probes that revealed underlying safety issues at the company and led to the resignation of its CEO. Then, last month, 33,000 Boeing workers walked off the job, seeking access to pension plans, job security, safety improvements, and higher wages. The strike, which crossed the one-month mark on Sunday, has cost the company and workers an estimated $5 billion, according to a report by Anderson Economic Group reviewed by CNN.

Boeing shares are down 42.6% from the start of the year.

The company is at risk of an S&P credit downgrade to junk, Yahoo Finance's Ines Ferré reports. Shares most recently slid last Friday after Boeing said it would cut its workforce by 10% and delay its first delivery of its 777X jet to 2026, Ferré wrote.
Dow slips, S&P 500 opens near record

The benchmark S&P 500 (^GSPC) index traded near its all-time high early Tuesday, while the tech-heavy Nasdaq Composite (^IXIC) rose roughly 0.2%.

The Dow Jones Industrial Average (^DJI) dipped about 0.6% on the heels of closing above 43,000 for the first time as markets assessed a fresh wave of earnings.

What's largely responsible for the drag on the Dow? UnitedHealth Group (UNH). The company saw shares fall nearly 10% after its 2025 profit guidance missed estimates.
Earnings roundup: Big banks lift market, healthcare posts mixed results

A fresh batch of bank earnings rolled in Tuesday morning, with strong quarterly results from Goldman Sachs (GS), Charles Schwab (SCHW), Bank of America (BAC), Citigroup (C), PNC (PNC), and State Street (STT) lifting the market.

Here are some of the highlights:

Healthcare stocks moved in different directions following mixed results. Here's a look:
Walgreens continues to look like a sick retailer

Not to be outdone by Big Lots and True Value recently announcing they were going bankrupt, Walgreens (WBA) is back in focus today with its now-normal dose of bad news.

The drugstore chain said this morning it will close 1,200 stores over the next three years. That's a huge number, one that says a lot about the company's struggles over the last two years.

These numbers from Yahoo Finance shed further light on Walgreens' problems:
The big banks cleaning up in investment banking again

Another big morning for the banks on the investment banking front.

Goldman Sachs (GS) delivered a 20% increase in its investment banking fees in the third quarter. Bank of America (BAC) also notched a 20% increase. Citi's (C) investment banking revenue grew 31%.

Last week, JPMorgan (JPM) showed a 31% year-over-year increase.

Is there a year-end advisory boom ahead of the November election as CEOs plot out their next five years? Could be. But there could also be a lot of companies preparing to IPO in 2025 amid near-record markets and the prospect of lower interest rates.