Dow Jones Industrial Average rises slightly after biggest drop in a year

U.S. stocks rose on Friday as Wall Street searched for a recovery from the Dow Jones Industrial Average's biggest sell-off in a year.

The S&P 500 (^GSPC) rose about 0.3%, and the tech-heavy Nasdaq Composite Index (^IXIC) added about the same amount. The blue-chip Dow Jones Industrial Average (^DJI) rose about 0.1%, or about 50 points.

Resurgent concerns about interest rates led to a selloff in stocks on Thursday, with the Dow Jones Industrial Average falling more than 600 points, while U.S. Treasury yields rose, with the benchmark 10-year Treasury yield (^TNX) hovering around 4.5%.

The euphoric mood turned sour after better-than-expected U.S. corporate data prompted the Federal Reserve to rethink the direction of interest rate policy.

Traders are roughly evenly split on whether the Fed will cut rates at its September meeting, according to the CME FedWatch tool. That's a big change from a few days ago, when only about a third expected the Fed to keep rates on hold at its first meeting of the fall. Goldman Sachs said Friday it no longer expects the Fed to make its first rate cut in July, suggesting September is most likely.

But Wall Street may be heading into the holiday weekend in a good mood. Nvidia (NVDA), whose shares surged early Thursday on its latest strong quarterly results, was up just under 1% on Friday, trading around $1,040 a share. An upcoming stock split could spur more retail investor interest in the company's shares.

The macroeconomic highlight on Friday was the revised University of Michigan consumer confidence index for May. Previous releases had shown the index fell sharply this month as worries about inflation and interest rates weighed on Americans' views of the economy.

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Friday, May 24, 2024 at 8:00 AM PDT

Nvidia is the fourth Mag7 company to split its stock in recent years.

Nvidia's (NVDA) upcoming 10-for-1 stock split, announced in conjunction with the company's blockbuster earnings report, marks the fourth split by a Big Seven company since 2022.

Analysts at Bank of America Global Research say the trend highlights the bullish nature of the move, which historically signals optimism among corporate executives and benefits companies that split their stock in the form of improved performance. A report released Friday found that companies that split their stock have gained 25% in the year following the split, compared with a 12% gain for the overall market.

Nvidia (NVDA) joins three other Mag 7 peers that have split their stock in the past two years. Amazon (AMZN), Alphabet (GOOG, GOOGL) and Tesla (TSLA) have made moves to make their shares more accessible, analysts say. The split also reinforces a trend of tech companies pursuing shareholder-friendly policies, such as introducing or expanding dividends and buying back shares.

Highly-valued tech companies may be inclined to follow the lead of their peers in splitting their stocks. Microsoft and Meta, for example, have stock prices above $500 and have emerged as candidates for splits.
Friday, May 24, 2024, 7:15 a.m. PDT

Stocks rise in morning trading

Below are some of the stocks that led Yahoo Finance's trending ticker page during morning trading on Friday.

Boeing (BA): The plane maker's shares fell about 8% on Friday morning after Chief Financial Officer Brian West warned that aircraft deliveries are slowing and that the company expects free cash flow to be negative.

Bitcoin (BTC-USD): The cryptocurrency's value fell 2% after the Securities and Exchange Commission moved to approve a key rule change that would allow trading of a spot Ether (ETH-USD) ETF, but the regulator has yet to give its go-ahead to asset managers hoping to launch the new product.

Working days (Wednesday): Shares of the enterprise software company fell 11% after it lowered its full-year subscription guidance in its first-quarter earnings report. Chief Financial Officer Zane Lowe said the guidance reflected increased sales scrutiny and slower customer growth.

Intuit (Into): The financial software company's shares fell about 8% on Friday morning after it said it was seeing a decline in low-income customers for its tax preparation service. The company said 1 million fewer people were using TurboTax's free tax preparation service compared to a year ago as it lost market share with low-income customers.
Friday, May 24, 2024, 7:01 a.m. PDT

Sonos CEO tells the truth about tariffs

Tariffs are not good business.

Sonos (SONO) CEO Patrick Spence spoke about the tariff issue on a new episode of my podcast, The Opening Bid. You can hear his comments at the 15-minute mark below. Remember, this company was one of the victims of President Trump's tariffs against China.

Interestingly, Sonos shares have been struggling since the Biden administration announced tariffs on China last week.

The clip below also offers more details about the company's first foray into the headphone market.
Friday, May 24, 2024, 6:33 a.m. PDT

The Dow Jones Industrial Average rebounds and rises slightly

U.S. stocks rose again on Friday as Wall Street tried to recover from the Dow Jones Industrial Average's biggest sell-off in a year.

The S&P 500 (^GSPC) rose about 0.3%, and the tech-heavy Nasdaq Composite Index (^IXIC) added about the same amount. The blue-chip Dow Jones Industrial Average (^DJI) rose 0.2%, or about 80 points.
Friday, May 24, 2024, 5:25 a.m. PDT
Where are investors' hearts…

Some interesting insights into investor sentiment came out of the team at JP Morgan this morning.

A new survey of 850 investors revealed the following findings:

Equities (51%) are expected to be the asset class with the highest returns in 2024, and the majority are somewhat bullish on the S&P 500, expecting the index to end the year at 5,250-5,750 (55%).

A majority agreed that the next move by the Federal Reserve would be an interest rate cut (69%), expected at its September meeting (49%).

The biggest threats to the market this year were geopolitical turmoil (cited by 35%) and a resurgence of inflation (32%).

When it comes to the US presidential election, investors are almost evenly split on whether the Republican candidate (51%) or the Democratic candidate (49%) will win.

Thirty percent of respondents predicted a Republican victory would lead to a risk-on environment for markets.

27% thought a Republican victory would not have a significant impact on the markets.

21% expected a Democratic victory would not have a significant impact on the market.