Stocks tread water with Dow aiming for 40,000

May 17, 2024

7 minutes read

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.

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.

Live9 updates

Fri, May 17, 2024 at 7:10 PM GMT+1

OpenAI reportedly disbands safety team

OpenAI’s Superalignment team, a unit tasked with wrestling with the long-term risks of sophisticated AI systems has been effectively disbanded, according to multiple reports, following the departure of the team’s founders earlier this week.

OpenAI is now spreading the team’s efforts to other parts of the company, Bloomberg reports. The move comes after a string of high profile exits and leaves open lingering questions about the AI company’s approach to safety and balancing its work to monetize AI initiatives.

OpenAI co-founder and chief scientist, Ilya Sutskever, who had previously clashed with CEO Sam Altman, said he was leaving the company on Tuesday.

The recent shakeups come after last year’s high profile ouster of Altman, who disagreed with members of the board over questions over how to safey advance AI. He was eventually reinstated.

The superaligmmen team, which was stood up last July, was focused on ensuring the safety of highly capable AI systems that some believe could eventually outsmart humans. At the time OpenAI said it would dedicate 20% of its computer power towards the team’s work.
Fri, May 17, 2024 at 6:15 PM GMT+1

Stocks trending in afternoon trading

Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Friday.

GameStop (GME): Shares of the video game retailer sank more than 25% on Friday morning after the company filed to sell 45 million new shares of common stock and released preliminary financial results that revealed sales fell sharply from the year prior in its most recent quarter.

Take-Two Interactive (TTWO): The video game developer that owns publishers Rockstar Games and 2k rose by 1% during afternoon trading after revealing that the long-awaited Grand Theft VI will be released in the fall of 2025. The company also disclosed that it expects net bookings for the fiscal year to come in at $5.55 billion to $5.65 billion, down from the $8 billion it previously projected, although some analysts said the updated launch date for the flagship title gives investors fresh clarity.

Cracker Barrel: (CBRL) Shares of the Southern-themed restaurant and gift shop fell by 12% after the company cut its dividend plans by nearly 80%. The announcement comes as the chain switches its focus to upgrading the brand and physical locations.

Reddit (RDDT): The forum-based social network gained more than 14% during morning trading following news of a partnership with OpenAI, the artificial intelligence company behind the popular ChatGPT. As part of the deal, OpenAI will become an advertising partner for Reddit and will give Reddit the ability to use OpenAI’s technology to build tools and features. In turn, ChatGPT will integrate Reddit’s content into its system.
Fri, May 17, 2024 at 5:32 PM GMT+1

Stocks tread water in afternoon trading

The major indexes are close to where they started in afternoon trading Friday, as Wall Street’s bid to push the Dow past 40,000 pauses, at least momentarily.

The Dow Jones Industrial Average (^DJI) held just below the key milestone after touching the level for the first time during Thursday’s trading. The S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) slipped just under the flatline, but all the gauges were on track for weekly wins.
Fri, May 17, 2024 at 5:07 PM GMT+1

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)
Fri, May 17, 2024 at 4:49 PM GMT+1

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.”
Fri, May 17, 2024 at 4:04 PM GMT+1

Reddit’s stock surges after deal with OpenAI

By signing a major partnership with OpenAI, the AI company behind ChatGPT, Reddit (RDDT) scored a major victory in its plans to sell its unique archive of posts to companies eager for troves of content to train their Large Language Models (LLMs).

On Friday, shares of the forum based social media company rose more than 14%, as investors cheered on the deal. The partnership will bring Reddit content into ChatGPT and OpenAI’s new products, drawing from Reddit’s data to give the chatbot real-time content on recent topics.

In turn, Reddit will receive AI-powered features for redditors and moderators, the company said in an announcement Thursday. OpenAI will also become an advertising partner on Reddit, boosting the company’s main source of revenue.

“Reddit has become one of the internet’s largest open archives of authentic, relevant, and always up to date human conversations about anything and everything. Including it in ChatGPT upholds our belief in a connected internet, helps people find more of what they’re looking for, and helps new audiences find community on Reddit,” said Steve Huffman, Reddit co-founder and CEO.

Reddit’s deal comes as other major media companies are striking deals with AI developers, trading their digitized bodies of language for guaranteed revenue.
Fri, May 17, 2024 at 3:15 PM GMT+1

Stocks trending in morning trading

Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday.

GameStop (GME): Shares of the video game retailer sank more than 25% on Friday morning after the company filed to sell 45 million new shares of common stock and released preliminary financial results that revealed sales fell sharply from the year prior in its most recent quarter.

Reddit (RDDT): The forum-based social network gained more than 14% during morning trading following news of a partnership with OpenAI, the artificial intelligence company behind the popular ChatGPT. As part of the deal, OpenAI will become an advertising partner for Reddit and will give Reddit the ability to use OpenAI’s technology to build tools and features. In turn, ChatGPT will integrate Reddit’s content into its system.

Robinhood (HOOD): The financial services company popular with retail stock traders rose 6% Friday morning following a double upgrade from Bank of America, from Underperform to Buy. Analysts pointed to rebounding retail engagement and a broader trend toward mobile trading that the young company stands to benefit from.

Cracker Barrel (CBRL): Shares of the restaurant chain fell by nearly 15% after the company cut its dividend plans by nearly 80%. The announcement comes as the Southern-themed eatery and gift store switches its focus to upgrading its brand and physical locations.
Fri, May 17, 2024 at 2:33 PM GMT+1

Stocks little changed as Dow reaches for 40,000

The major indexes didn’t move much at the open Friday as Wall Street was poised for the Dow to make another attempt at surpassing a key milestone of 40,000.

The Dow Jones Industrial Average (^DJI) held steady on the heels of touching the level for the first time during Thursday’s trading. The S&P 500 (^GSPC) rose 0.1% while the tech-heavy Nasdaq Composite (^IXIC) also gained 0.1%, with all the gauges on track for positive ends to the week.
Fri, May 17, 2024 at 11:30 AM GMT+1

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.