US stocks rose Friday afternoon, building on a stellar November, even as investors digested a warning from Federal Reserve Chair Jerome Powell that it would be “premature” to conclude that Fed rate hikes are over or “speculate” when cuts could begin.
The S&P 500 (^GSPC) increased about 0.6% to a new 2023 closing high, while the Dow Jones Industrial Average (^DJI) rose roughly 0.8% or nearly 300 points. The tech-heavy Nasdaq Composite (^IXIC) advanced 0.5%. All three indexes closed positive for a fifth straight week.
Stocks soared in November to post their best monthly performance since 2022 as conviction that the Fed was done with rate hikes morphed into growing hopes for rate cuts before the summer.
“It’s one of the best months we’ve seen in the last decade,” eToro US investment analyst Callie Cox told Yahoo Finance Live. “And I think it shows us how a lot of investors were caught off guard by the Fed’s flexible stance after the Nov. 1 meeting.”
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
Powell spoke Friday after October data showed inflation cooled to its lowest levels since 2021. Despite his pushback against talk of rate cuts, markets moved higher from earlier losses as he hinted the central bank could be done with rate hikes.
Meanwhile, oil prices lost more ground after OPEC+’s additional output curbs failed to convince skeptical investors. WTI crude futures (CL=F) traded just above $74 a barrel, down over 2%, while Brent (BZ=F) futures were below $83.
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Stocks finish higher after Powell urges caution
Wall Street extended stock gains on Friday, kicking off December with a bang. While Fed Chair Powell urged investors that it was “premature” to expect imminent rate cuts, the market pushed ahead, interpreting his cautious remarks in a positive light. The Fed is expected to hold rates steady at its next policy meeting in less than two weeks. And many on Wall Street still believe the central bank is likely finished with rate hikes, even as Powell said they are still possible.
The S&P 500 (^GSPC) rose roughly 0.6%, while the Dow Jones Industrial Average (^DJI) advanced 0.8% or nearly 200 points. The tech-heavy Nasdaq Composite (^IXIC) gained close to 0.6%.
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A look at the week ahead
Demoralizing interest rates and paltry home inventory have squeezed the US housing market, as both buyers and sellers hesitate to make moves in a challenging market. One of the largest home builders will give investors the latest read on the future of property construction, as Toll Brothers (TOL) plans to report earnings in the coming days.
Retail market observers will also get new information and forecasts from large chains including Dollar General (DG) and Luluemon (LULU). Their earnings follow several weeks of retail reports that built on a theme of a more discerning, weakened American consumer.
Investors will also get further insight into the labor market with the release of the Job Openings and Labor Turnover data for the month of October. In addition, the end of next week will also bring the November jobs report, a key indicator that will steer the direction of the Federal Reserve’s tightening campaign.
Yahoo Finance’s Brent Sanchez has a graphical breakdown of what to watch next week:
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Apple and Paramount in talks to bundle services
The TV bundle that long defined the entertainment industry is getting a second life, at least among streaming services that are putting their own spin on packaging multiple services to customers.
Apple (AAPL) and Paramount (PARA) have discussed bundling their streaming services at a discount, the Wall Street Journal reports, as companies try to cut through a crowded field and customers pull back on subscribing to multiple services.
The potential combination would cost less than the paying for the two services separately, according to the report, and the details are still unclear.
Entertainment companies continue to face pressure as customers are saturated with choices and the streaming business matures. Analysts foresee consolidation on the horizon, and Paramount specifically is seen as a potential acquisition target. Streamers have also increased prices and adopted ad-supported plans to juice revenue.
The benefit of a bundling strategy stems from discounted pricing for customers and a more robust product offering from streamers. While some customers might chose to sign on to a service and then cancel after binging a show, a bundle may offer a more compelling reason to stay, with a larger library and access to more exclusive shows and movies.
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Stocks trending in afternoon trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Friday:
Paramount (PARA): The entertainment company rose more than 9% Friday afternoon following a Wall Street Journal report that Paramount and Apple (AAPL) are in talks to potentially bundle their streaming platforms. The proposed Apple TV+/Paramount+ combo service would likely be more affordable than having the two services separately, and would give customers access to exclusive content across both catalogs.
Pfizer (PFE): Shares of the pharmaceutical giant fell by 6% on Friday morning after the company said it would not move forward with a study of its two-dose obesity treatment, following a high level of side effects in patients involved in the trials.
Coinbase (COIN): Shares of the crypto platform rose more than 6%, building on impressive returns for the year following a major settlement between US authorities and Binance that analysts say has resolved a degree of uncertainty that had hung over the industry. Coinbase is trading at roughly four times the price at which it began the year.
Bitcoin (BTC-USD): The world’s largest cryptocurrency rang in December with optimism as it extended a rally that is approaching a 19-month high as investors bank on approval of a spot exchange-traded fund that would invite more capital investments to the industry. Bitcoin rose nearly 2% to surpass $38,000.
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Stocks tick upward even after Powell chills rate cut chatter
Federal Reserve Chair Jerome Powell warned that it would be “premature’ to conclude that rate hikes are over or “speculate” when cuts could begin.
In prepared remarks at Spelman College in Atlanta on Friday, Powell chilled hopes that the central bank would soon declare victory in its fight to curb inflation. But investors appeared to take the cautious comments in stride, as the major indexes ticked higher in the final hour of morning trading.
Powell’s comments follow a fresh read on the Fed’s favored inflation measure — the core Personal Consumption Expenditures index — that showed inflation is continuing to slowly come down, Yahoo Finance’s Jennifer Schonberger reports. Core PCE clocked in at 3.5% for the month of October, down from 3.7% in September, continuing a downward trend from 4.3% back in June.
The full effects of the Fed’s aggressive rate hikes have likely not yet been felt, he said. That suggests the Fed will hold interest rates steady at its next meeting in less than two weeks.
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Stocks trade higher in afternoon session
Wall Street gathered momentum on Friday afternoon following remarks from Fed Chair Jerome Powell in which he chilled hopes of an imminent rate cut and an end to the tightening campaign.
The S&P 500 (^GSPC) increased about 0.5%, while the Dow Jones Industrial Average (^DJI) rose roughly 0.7% or more than 200 points. The tech-heavy Nasdaq Composite (^IXIC) advanced 0.4%.
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Tesla stock falls after Cybertruck debut
Tesla’s (TSLA) much-anticipated Cybertruck has arrived as the company delivered its first batch of the vehicle to buyers. On first blush the market did not seem impressed; shares of the all-electric automaker fell 2% in morning trading Friday.
The slide also comes after CEO Elon Musk faces the fallout from his interview at the New York Times (NYT) DealBook conference earlier this week, in which he cursed advertisers fleeing his social media company X.
Drivers interested in the Cybertruck base model will have to hand over $60,990, more than 50% more than the company estimated years ago when it announced the new model. “That just isn’t a large segment of the population that can afford that especially where interest rates are,” said Jessica Caldwell, head of insights at auto research firm Edmunds.
The truck’s launch caps off a topsy-turvy year for Tesla, Yahoo Finance’s Josh Schafer reports, which has seen its stock price soar on the possibilities of its artificial intelligence goals while also coming under pressure amid multiple price cuts and weakening margins.
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Stocks trending in morning trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday:
Pfizer (PFE): Shares of the pharmaceutical giant fell by 6% on Friday morning after the company said it would not move forward with a study of its two-dose obesity treatment, following a high level of side effects in patients involved in the trials.
Bitcoin (BTC-USD): The dominant cryptocurrency rang in December with optimism as the world’s largest cryptocurrency extended a rally that is approaching a 19-month high as investors bank on approval of a spot exchange-traded fund that would invite more capital investments to the industry. Bitcoin rose nearly 2% to surpass $38,000.
Ulta (ULTA): The beauty supply retailer continued its climb Friday morning, rising more than 12%, after the company reported third quarter results that were slightly better than Wall Street expected. The beauty retailer reported adjusted earnings of $5.07 per share, compared to expected $5.00.
Marvell (MRVL): Shares dropped by 6% after the semiconductor company offered fourth quarter guidance that fell short of the expectations for the top and bottom lines.
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Stocks open down slightly ahead of Powell’s remarks
Wall Street rang in the final month of the day with some pessimism as investors braced for Fed Chair Jerome Powell to deliver remarks later this morning.
The S&P 500 (^GSPC) edged lower by about 0.2%, while the Dow Jones Industrial Average (^DJI) was virtually unchanged. The tech-heavy Nasdaq Composite (^IXIC) sank 0.3%.
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