U.S. stocks closed higher on Thursday, after the Federal Reserve announced a cut of 25 basis points (bps) in interest rates, extending a sharp rally sparked by Donald Trump's return as U.S. president.
Market Snapshot
The Dow Jones Industrial Average fell 0.59 point, or flat, to 43,729.34, the S&P 500 gained 44.06 points, or 0.74%, to 5,973.10 and the Nasdaq Composite gained 285.99 points, or 1.51%, to 19,269.46.
Market Mover
Tesla - Tesla stock rose 2.9% again oncThursday after a big target price bump from a Wall Street bull and after realizing huge—somewhat surprising—post-election gains on Wednesday.
Trump Media & Technology - Trump Media & Technology Group was down 23% after shares rose 5.9% on Wednesday following Trump’s victory. Trump Media, which is majority owned by the president-elect and is the operator of the Truth Social site,had risen as much as 35%in Wednesday’s session.
AppLovin - AppLovin, the maker of software for app monetization, surged 46.3% after postingthird-quarter earnings and revenuethat handily beat Wall Street estimates. The company also issued a revenue forecast for the fourth quarter that topped expectations, saying it expects revenue of $1.24 billion to $1.26 billion.
Lyft - Lyft reported a 32% jump in third-quarter revenue that beat expectations and an increase of 16% in gross bookings to $4.11 billion, higher than forecasts. The ride-hailing company expects fourth-quarter gross bookings of $4.28 billion to $4.35 billion, better than estimates of $4.23 billion. The stock was up 22.9%.
Qualcomm - Qualcomm reported fiscal fourth-quarter earnings that were better than expected and the wireless-chip leader issued a first-quarter forecast that also topped expectations. The stock was down slightly. Adjusted earnings in the fourth quarter were $2.59 a share, higher than Wall Street estimates of $2.56. Revenue of $10.24 billion rose 19% from a year earlier and topped expectations of $9.91 billion. For the current quarter, Qualcomm anticipates adjusted earnings of $2.95 a share on sales of $10.9 billion at the midpoint.
ARM Holdings - Fiscal second-quarter earnings at Arm Holdings beat Wall Street forecasts. Shares of the chip design company were up 4.1% after falling in the premarket session. Arm guided for third-quarter revenue of $920 million to $970 million compared with consensus estimates of $939 million. Coming into Thursday, the stock has risen 93% this year.
Zillow - Homebuying app Zillow posted athird-quarter lossof $20 million on revenue of $581 million. Analysts had been calling for a loss of $40 million on revenue of $555 million. Residential revenue in the period rose 12% from a year earlier to $405 million, while revenue at mortgages, the company’s smallest segment, rose 63% to $39 million. The stock jumped 23.8%.
Wolfspeed - Wolfspeed declined 39.2% after the developer and manufacturer of wide-bandgap semiconductors reported fiscal first-quarter revenue that missed expectations and said it expects second-quarter revenue of between $160 million and $200 million, below estimates of $215 million. The company also said it would be reducing its head count by 20% over the next six months as it looks to streamline its cost structure.
Match - Match Group tumbled 17.9% after the parent company of Tinder and Hinge reported weaker-than-expected third-quarter revenue and issued guidance that missed expectations.
Warner Bros. Discovery - Warner Bros. Discovery was up 11.8% after posting asurprise third-quarter profitand revealing that its streaming service Max had its best-ever quarter.
Under Armour - Under Armour rose 27.2% after fiscal second-quarter earnings at the sports apparel company rose from a year earlier and topped expectations on an adjusted basis. The company also said it expects a fiscal 2025 loss of between 48 cents and 51 cents a share, narrower than a previous estimate. On an adjusted basis, Under Armour raised fiscal-year earnings guidance to between 24 cents and 27 cents a share, higher than its previous outlook of 19 cents to 21 cents.
Market News
Fed Cuts Rates 25 Bp, as Expected
The Federal Reserve cut interest rates by a quarter of a percentage point on Thursday as policymakers took note of a job market that has "generally eased" while inflation continues to move towards the U.S. central bank's 2% target.
"Economic activity has continued to expand at a solid pace," the central bank's rate-setting Federal Open Market Committee said at the end of a two-day policy meeting in which officials lowered the benchmark overnight interest rate to the 4.50%-4.75% range, as widely expected. The decision was unanimous.
In a press conference after the announcement, Fed Chair Jerome Powell said Tuesday's election in which Republican Donald Trump was elected president, will have no effects on policy decisions in the near term. He also said some of the downside risks to the economy have diminished amid stronger economic data.
Fed's Powell Says He Will Not Quit Even If Asked by Trump
Federal Reserve Chair Jerome Powell said on Thursday he would refuse to leave office early if incoming President Donald Trump tried to oust him, adding he cannot be legally removed anyway.
Speaking at a press conference following the latest meeting of the rate-setting Federal Open Market Committee, Powell was asked if he'd exit central bank leadership if asked by Trump, who repeatedly attacked him in his first term as president. Powell said flatly "no" and noted that removing him, or any of the other Fed governors, ahead of the end of their terms is "not permitted under the law."
Powell spoke after the Fed met expectations and cut its interest rate target range by a quarter percentage point to between 4.5% and 4.75%, as officials continue to normalize monetary policy amid cooling inflation pressures.
