Stock market today: Dow hits fresh record, Nvidia and chip stocks jump
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Tech led US stocks higher on Thursday as TSMC's (TSM) upbeat outlook eased worries about artificial intelligence chip demand, helping lift shares of chip heavyweight Nvidia (NVDA) to an intraday all-time high. Strong retail sales data also reinforced overall strength in the US economy.
The tech-heavy Nasdaq Composite (^IXIC) rose just over the flatline, while the S&P 500 (^GSPC) ticked below it, after briefly touching an intraday record. The Dow Jones Industrial Average (^DJI) gained 0.4% to hover near all-time highs.
Contract chipmaker TSMC posted a 54% jump in quarterly profit to beat Wall Street estimates and raised its forecast for 2024 revenue growth amid surging AI demand. The outlook boost from the main chipmaker for Apple (AAPL) and Nvidia reassured a market spooked by ASML's (ASML) downbeat sales forecast, reviving hopes for an AI boom.
TSMC's US-listed shares climbed about 10%, crossing a $1 trillion market valuation. Its forecast helped spur a rally in chip stocks, including Arm (ARM), Broadcom (AVGO), and Nvidia, which all were up more than 2%.
On the data front, retail sales jumped 0.4%, more than the 0.3% rise expected, giving credence to the argument the economy could be reaccelerating following a surprisingly strong September jobs report. Weekly jobless claims came in at 241,000, far below expectations, and a drop from the prior week's upwardly revised 260,000. The data released Thursday morning was watched by investors debating whether the Federal Reserve will hold off from cutting interest rates in November.
After a stellar showing by big banks, the focus is now on Big Tech earnings to wipe away the disappointments of the last quarter. After the bell, Netflix (NFLX) popped as much as 5% following better than expected earnings and subscriber growth.
LIVE COVERAGE IS OVER 18 updatesNetflix shares gain 5% after earnings beat, subscriber growth
Netflix (NFLX) shares popped as much as 5% in after-hours following the company's fiscal third quarter earnings release.
The streaming giant's global paid membership grew 14.4% year-over-year to 282.72 million with net additions of 5.07 million.
Netflix posted revenue of $9.83 billion versus $9.78 billion expected by analysts. Earnings per share came in at $5.40 versus Wall Street estimates of $5.16.
"In Q3, revenue grew 15% year over year and operating margin was 30% vs. 22% last year," said the company's shareholder letter. For 2024, the streamer expects revenue growth of 15% and operating margin of 27%.
Dow notches record, Nasdaq jumps as Nvidia and other semis rise
Tech stocks drove the major averages higher on Thursday, with the Dow Jones Industrial Average (^DJI) closing at a fresh record.
The S&P 500 (^GSPC) fell slightly after briefly hitting intraday highs earlier in the session.
The tech-heavy Nasdaq Composite (^IXIC) rose just over the flatline.
TSMC's (TSM) upbeat outlook sent the semiconductor space higher with chip heavyweight Nvidia (NVDA) gaining 1% after hitting an all-time intraday high during the session.
Netflix slips 1% ahead of earnings
Netflix (NFLX) shares dropped more than 1.5% ahead on Thursday ahead of the company's fiscal third quarter earnings results due after the market close.
Yahoo Finance's Alexandra Canal reports the streamer will have a high bar to overcome as analysts look ahead to another price hike announcement as a potential catalyst for the stock trading near all-time highs.
Here's what Wall Street expects for the company's third quarter, according to Bloomberg consensus estimates:
Stocks pare session gains, still near record levels
Stocks pared session gains by 2:35 p.m. ET on Thursday but were still in positive territory. The S&P 500 (^GSPC) which touched an intraday record high earlier, hovered just above the flat line while the tech-heavy Nasdaq Composite (^IXIC) rose roughly 0.1%.
The Dow Jones Industrial Average (^DJI) held onto gains, up more than 3%. The blue-chip index was on pace to close at a record high.
Mortgage rates spike for third straight week while buyers grow cautious
Mortgage rates rose for the third consecutive week, prompting fewer homebuyers and refinancers to move forward with transactions.
The average 30-year fixed-rate mortgage rose to 6.44% in the week through Wednesday, hitting the highest level since August, according to Freddie Mac data. A week earlier, it was 6.32%.
As Yahoo Finance's Claire Boston reports, mortgage rates have been on the rise as markets adjust expectations about the size and pace of future Federal Reserve rate cuts. The recent upticks have curtailed refinancing activity and kept the pace of home buying anemic.
Read more here.
Affirm falls after Apple announces partnership with rival Klarna
Affirm stock (AFRM) fell around 8% on Thursday shortly after Apple said it's making rival Klarna's flexible payment options available via Apple Wallet on iOS 18. Affirm's buy now, pay later service is already available on Apple Pay: The financial tech company and Apple announced the deal in September.
Apple also said Thursday that it's adding expanded Affirm options. Apple iOS 18 users can now use Affirm's installment loan service intended to help users with larger purchases.
The move lower in Affirm stock follows a rally in the past two weeks, as four Wall Street analysts upgraded their ratings on the stock to Overweight or Equal Weight. Of the analysts covering the stock tracked by Bloomberg, some 10 recommend buying the stock, while 10 have an Equal Weight rating, and two maintain a Sell rating, Bloomberg data shows.
Despite Affirm's decline Thursday, the stock is up more than 30% from three months ago, as shares rallied following the company's most recent earnings report, which topped expectations. But the stock is far below its all-time high above $160 in 2021.
EV maker Lucid selling more stock to raise cash ahead of SUV launch
Yahoo Finance's Pras Subramanian reports:
Lucid Motors (LCID) stock is sliding after the electric vehicle maker announced another capital raise via a share sale late Wednesday night, as the California-based automaker seeks further runway ahead of the release of its upcoming EV SUV.
Lucid said it will offer up to 262,446,931 shares, with the proceeds likely raising around $1.67 billion, for general corporate purposes as well as for capital expenditures and working capital.
Read more here.
Nvidia and other chip stocks surge after TSMC forecasts strong AI demand for 'many years'
Optimism over AI demand in Taiwan Semiconductor Manufacturing Company's (TSM) blowout third quarter earnings boosted chip stocks across the board on Thursday, sending shares of chip giant Nvidia (NVDA) to record highs.
As Yahoo Finance's Laura Bratton reported earlier, TSMC posted a quarterly profit of 325.3 billion New Taiwan dollars ($10.1 billion), up 54% from the prior year, surpassing Wall Street’s forecasts. The company also raised its full-year sales outlook.
US-listed TSMC shares jumped 13% on the news to all-time highs, pushing the company's market capitalization past the $1 trillion mark.
TSMC is a major supplier to Nvidia. Shares of the AI chip heavyweight rose more than 3% to touch an intraday record, while Advanced Micro Devices (AMD), Qualcomm (QCOM), and Broadcom (AVGO) also gained.
Read more here.
Disney joins Peacock, Max, and others in raising prices. Here's what it means for your subscription costs
Yahoo Finance's Alexandra Canal reports:
Disney (DIS) hiked the prices of its various subscription plans on Thursday, highlighting a trend that's gained traction over the past year as media companies focus on improving profitability.
Disney first announced the price hikes in August, revealing increases across its various Disney+ and Hulu plans. These changes are set to take effect alongside the Disney+ debuts of Marvel's "Agatha All Along" and Pixar's "Inside Out 2."
Most plans will see subscription costs rise by $1 to $2 per month. Hulu Live TV plans will see more sizable increases, rising by $6 a month.
Read more here.
Gold touches record high to hold above $2,700 per ounce
Gold touched a record high on Thursday, giving fuel to the bulls' argument that the precious metal’s rally this year isn’t over.
Gold futures (GC=F) jumped more than 0.5% to hover above $2,706 per ounce. Spot gold also rose to a daily high just north of $2,690.
Year to date, gold is up more than 30%, beating out the S&P 500's (^GSPC) gain of roughly 22%.
The expectation that the Federal Reserve will continue to cut interest rates coupled with central banks' accumulation of the yellow metal has made gold one of the best-performing commodities of 2024.
Homebuilder confidence rises in October despite mortgage rates increasing
Homebuilders are feeling more confident about the housing market despite a recent sharp rise in mortgage rates.
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index rose two points to 43 in October from the previous month, marking the second consecutive monthly gain. October’s reading was higher than economists’ estimates of 42, per Bloomberg data.
Still, any reading under 50 indicates more builders view conditions as poor rather than good.
“While housing affordability remains low, builders are feeling more optimistic about 2025 market conditions,” NAHB Chairman Carl Harris, a custom homebuilder from Wichita, Kan., said in a press release.
Mortgage rates have been rising recently, with the average rate on a 30-year fixed rate loan climbing to 6.32% last week from 6.12% a week earlier in the biggest week-over-week increase since April., according to Freddie Mac. Mortgage rates, which tend to follow US Treasury yields, have been recently moving upward as strong job growth and persistent inflation leads traders to pare back their expectations on how aggressively the Fed will cut interest rates.
The NAHB survey also showed more builders offered concessions in October. The survey found that 62% of builders used some sort of sales incentive to close the deal, up from 61% in September. Meanwhile, 32% of builders cut home prices to bolster sales in October, similar to last month. The average price reduction was 6%, up from 5% last month.
The gauge measuring sales outlook over the next six months rose 4 points to 57. The prospective-buyer traffic gauge and the NAHB index of current sales conditions also both gained two points in October.
Lucid stock tanks 14% as EV maker announces capital raise
Lucid shares tanked more than 14% on Thursday morning after the luxury electric vehicle maker announced a stock offering to raise about $1.67 billion.
Year to date, Lucid shares are down more than 32%.
Tech leads stocks higher on TSMC outlook, strong retail sales data
The major averages rose on Thursday with tech stocks leading the gains after chipmaker TSMC's (TSM) upbeat outlook helped send the semiconductor sector higher.
The tech-heavy Nasdaq Composite (^IXIC) rose 0.9%, while the S&P 500 (^GSPC) added 0.6%. The Dow Jones Industrial Average (^DJI) rose 0.3%.
Strong economic data also helped lift stocks. September's retail sales rose 0.4% versus estimates of 0.3% — a sharp increase from August's 0.1% rise.
Meanwhile, jobless claims for the week ended Oct. 12 came in at 241,000, versus estimates of 259,000.
Retail sales in September rise more than expected, jump 0.4%
September's retail sales rose 0.4% versus estimates of 0.3% — a sharp acceleration off August's 0.1% growth.
Meanwhile, jobless claims for the week ended Oct. 12 came in at 241,000, versus estimates of 259,000. The prior week's reading was revised up to 260,000.
The data released Thursday morning gives fuel to the argument that the economy could be reaccelerating following a strong September jobs report. Investors were watching the data for clues on what the Federal Reserve's interest rate move will be at the next FOMC meeting in November.
TSMC soars on earnings beat, lifting chip stocks
US-listed shares of Taiwan Semiconductor Manufacturing Company (TSM) surged 9.6% in premarket trading, putting the stock in position for an all-time high after its third quarter earnings beat analyst estimates. TSMC recorded a 54% jump in profit and raised its full-year revenue outlook.
TSMC manufactures chips for Nvidia (NVDA) and its rival Advanced Micro Devices (AMD) as well as Broadcom (AVGO) and many other tech firms. Nvidia shares jumped 3%, AMD rose 2.7%, and Broadcom jumped 2.8% premarket on the news.
Here's a look at TSMC's results:
The chip stocks' rally partially reverses the sector's losses earlier this week, driven by fears over potential further US trade restrictions and a gloomy report from semiconductor equipment manufacturer ASML.
Analysts at Needham, Bernstein, Barclays, and other investment firms reiterated their Buy ratings on TSM stock on Thursday morning. Of the Wall Street analysts tracked by Bloomberg who cover the company, some 23 recommend buying the stock, while only one analyst has a Hold rating.
On average, analysts see shares rising to about $217 each over the next 12 months, per Bloomberg data.
Good morning. Here's what's happening today.
Earnings: Netflix (NFLX), Blackstone (BX), Travelers (TRV), First National Bank (FBAK), Western Alliance (WAL), WD-40 (WDFC)
Economic data: Initial jobless claims; Retail sales (September); Philadelphia Fed Business Outlook, (October); Industrial production (September); NAHB housing market index (October); Leading Index, (March); Existing home sales, (March)
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