Stocks tread water with Dow aiming for 40,000
US stocks were little changed Friday afternoon with Wall Street pausing on the run towards bullish milestones as investors dithered over the odds for rate cuts.
The Dow Jones Industrial Average (^DJI) held steady on the heels of touching the key 40,000 level for the first time during Thursday’s trading. The S&P 500 (^GSPC) ticked just over the flatline while the tech-heavy Nasdaq Composite (^IXIC) slipped just underneath it, but all the gauges were on track for weekly wins.
The run-up in stocks hit a bump in the wake of comments from Fed officials warning that rates are likely to stay at historic highs for a while. That dampened enthusiasm for the likelihood of a September cut that had been lifted by encouraging inflation data.
Read more: How does the labor market affect inflation?
Friday’s light economic and corporate calendar leaves few jumping-off points for the Dow to make another go at crossing its key juncture, while the S&P 500 and Nasdaq have their own fresh records within reach.
That puts the spotlight on appearances by Fed officials. On Friday US Federal Reserve Governor Michelle Bowman reiterated her view that the central bank has not made progress this year on curbing inflation, she said in a speech in Nashville, Tennessee. Bowman said she is willing to raise rates again at a future meeting if incoming data shows further stalling.
Fed Chair Jerome Powell was scheduled to deliver remarks at Georgetown University’s Law School graduation this Sunday, but he will now be speaking through a pre-recorded video, after he tested positive for COVID-19, a central bank spokesperson said on Friday.
In individual movers, Reddit (RDDT) shares jumped 13%, not far off its highest close of $65.11 hit in March. The social media platform has signed a partnership with OpenAI that will see ChatGPT integrate content from its forums.
Meanwhile, GameStop (GME) shares sank over 25% after the games retailer said it expects first quarter sales to drop as shoppers shift to online outlets. Shares in the meme stock soared at the start of the week in an echo of the 2021 frenzy, but the rally has turned into a slide in recent days.
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Fed Chair Jay Powell tests positive for COVID-19
Fed Chair Jerome Powell has tested positive for COVID-19, a central bank spokesperson disclosed on Friday.
The spokesperson said Powell received the diagnosis Friday, saying he tested positive “late yesterday “and is experiencing symptoms.”
The Fed noted that Powell would no longer be attending Georgetown University’s Law School graduation, where he was scheduled to deliver remarks in person this Sunday. Instead he will do so via a pre-recorded video.
“Following Centers for Disease Control and Prevention guidance, he is staying away from others and working at home,” the Fed said in a statement. Powell has tested positive for the virus before, in 2023.
Federal Reserve Chair Jerome Powell departs after the conclusion of a meeting of the Financial Stability Oversight Council at the Treasury Department on May 10, 2024 in Washington, DC. (Photo by Kent Nishimura/Getty Images) (Kent Nishimura via Getty Images) -
GameStop stock plunges on move to issue shares
The 2024 mini meme stock rally is losing steam
GameStop stock (GME) sank as much as 30% on Friday after the company filed to sell 45 million new shares of common stock and released preliminary financial results that showed sales fell sharply from the same period last year, Yahoo Finance’s Josh Schafer reports.
The video game retailer said it expects sales to be in the range of $872 million-$892 million in its fiscal first quarter, down from $1.24 billion in the same period a year prior. Wall Street had expected revenue of just over $1 billion for the quarter, according to data from Bloomberg.
With Friday’s decline, the stock is now below where it opened Monday morning after the reemergence of Keith Gill, also known as “Roaring Kitty,” on X, formerly Twitter, over the weekend.Gill’s bull case for GameStop ignited the meme stock rally back in 2021, and the stock more than doubled by Tuesday morning.
“I’m not seeing anything in the preannouncement that tells me that the business is turning around,” Wedbush managing director Michael Pachter told Yahoo Finance. “But at least they’ll raise enough cash to last them another three or four years if they, in fact, continue to fail and try to find a new strategy.”
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Reddit stock pops premarket on OpenAI deal
Reddit stock (RDDT) is up 14% premarket on a new deal with OpenAI whereby OpenAI will gain access to Reddit’s data to help build out its models.
This deal shouldn’t come as a surprise to Reddit investors — the company recently struck a similar deal with Alphabet (GOOGL). Reddit co-founder and CEO Steve Huffman told me last week that more deals like this are likely as part of the platform’s reinvention.
Look for a new user interface later this year.
Watch below.
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