Stock market today: Stocks end turbulent week lower after another hot inflation report

The S&P 500 (^GSPC) slid on Friday, ending the session down 0.5% after a hotter-than-expected wholesale inflation print. The reading indicated that the Federal Reserve may be inclined to push out its timeline for rate cuts.

The Dow Jones Industrial Average (^DJI) dipped more than 140 points, or 0.4%. The tech-heavy Nasdaq Composite (^IXIC) fell 0.8%.

The 10-year Treasury (^TNX) climbed to 4.3% during the session. Stocks wavered earlier in the session but slid solidly below the flatline in the last hour of trading ahead of a shortened trading week.

The markets will be closed on Monday in observance of Presidents' Day, a national holiday.

Next week, Walmart (WMT), Home Depot (HD), and Toll Brothers (TOL) will report quarterly results.

The AI play began last year with the tech titans Nvidia, Microsoft, Alphabet, and the rest of the “Magnificent Seven.”

But as Yahoo Finance's Ethan Wolff-Mann outlines, outside of the big winners like chip giant Nvidia, new companies with even gaudier gains have started to emerge.

Like Super Micro Computer (SMCI).

The company’s stock chart looks like a perfect hockey stick in the context of its 2023-24 rally, even with Friday's 12% sell-off. It’s Mav and Goose in an unrestricted climb. It’s flat, flat, flat, and then it goes big. It’s the story of AI.

Read more here.

Alphabet (GOOG, GOOGL) stock is down a second day in a row amid possible competition from OpenAI, the creator of ChatGPT reportedly working on a product to rival Google search.

But as Yahoo Finance's Dan Howley reports, OpenAI is going to need a lot more help if it hopes to make even a slight dent in the search giant’s armor.

Read more here.

Roku (ROKU) stock sank more than 20% on Friday as weakness in the advertising market and competition from tech giants like Amazon (AMZN) weighed on investor sentiment.

As Yahoo Finance's Alexandra Canal notes, Roku posted better-than-expected Q4 top- and bottom-line results with double-digit gains in both accounts and hours streamed. However the company slightly missed guidance estimates for gross profit in the current quarter.

While the ad market has rebounded for Big Tech companies, smaller players haven't reaped the benefits.

"We remain mindful of near-term challenges in the macro environment and an uneven ad market recovery," the company said in its shareholder letter.

Roku shares are down about 17% year to date.

Read more here.

Commercial real estate has been hit hard amid a pandemic shift to WFH.

Fortunately, the office market may have reached a bottom, according to commercial real estate brokerage CBRE (CBRE).

“We think it [has] bottomed out,” said CBRE CEO Robert Sulentic on the company's earnings call Thursday. “There’s just a clear amount of pressure from companies to get their people back into the office. You’re going to see the future be better than the current circumstances have been for a variety of reasons.”

CBRE said that it's optimistic the worst is over particularly for Class A properties, which bring in the bulk of its leasing revenue.

Distress in this commercial real estate sector has pressured property managers and lenders such as New York Community Bancorp (NYCB) in recent weeks.

CBRE stock was trading slightly lower Friday after popping the previous day when it reported.

Coinbase Global (COIN)

Shares soared as much as 17% on Friday after the US cryptocurrency exchange posted its first quarterly profit in two years as trading surged on a new wave of optimism about digital assets.

As Yahoo Finance’s David Hollerith reports, Coinbase's fourth quarter $273 million profit was the first positive quarterly earnings print since Q4 of 2021, when the last crypto boom was still raging.

SoundHound AI (SOUN)

The stock popped more than 4% on Friday, extending gains from its massive rally in the prior session after it was revealed that chipmaking giant Nvidia (NVDA) held investments in SoundHound AI as of Dec. 31, 2023.

Shares of the company that specializes in voice AI and speech recognition are up more than 75% over the past two days.

Nvidia's SEC filing also revealed stakes in Arm Holdings (ARM) and biotech company Recursion Pharmaceuticals (RXRX).

Super Micro Computer (SMCI)

The AI cloud storage company’s monster rally hit the pause button on Friday, with shares down about 13% shortly after 1:00 p.m. Eastern.

The stock opened the session higher, rising more than 7% before sinking into negative territory.

Super Micro has gained about 200% in a month and nearly 1000% over the last 12 months amid ongoing investor enthusiasm for artificial intelligence.

The stock has 11 Buy, 3 Hold, and 1 Sell rating from Wall Street analysts.

You may want to take Feb. 21, 2024, off from work.

Why?

The most important company in all of humanity, Nvidia (NVDA), will be reporting earnings after the close of trading! One word from the leader of the King of Chips — Mr. Jensen Huang — may either make or break the broader market for weeks on end.

I know this sounds utterly ridiculous, but it underscores how insane it has become to study and report on this leading AI play. Here is a company that could very well show triple-digit-percentage earnings growth in its most recent quarter and it may be seen as a letdown.

In fact, Nvidia could report triple-digit-percentage earnings growth and outline two more quarters of it and it still may not be enough for investors that have sent the stock up 55% since the start of 2024.

And I think this concern is being nicely highlighted in a new Bank of America note from veteran chips analyst Vivek Arya that I just stumbled upon in my FriYay inbox.

Here’s what caught my attention from Arya:

“[We] won't be surprised to see a notable but brief pullback after the recent parabolic run-up in the stock - Bloomberg options indicate ~11% implied move post earnings. Expectations have been steadily moving up, with some bullish buy-side estimates for Nvidia F4Q/1Q report/guided sales at $21.7 billion/$23 billion or 9%/7% above consensus, leaving less room for upside surprises.”

Having said that, Arya is rolling with a Buy rating and $800 price target on Nvidia into earnings.

He added:

“However, in our view, any potential mismatch versus bullish expectations is likely supply (memory, packaging) rather than demand or competition related. More importantly, we expect stock volatility to likely be short-lived especially as investors look ahead to Nvidia’s flagship GPU Tech Conference (GTC) scheduled for March 18-21, featuring important pipeline, partner, and AI TAM [total addressable market] updates. As reference Nvidia’s stock was on average 6% higher (vs. SPX up 1%) T+1 days following the last six annual GTC events.”

Just another day in Nvidia hype land, I suppose.

Oil's bumpy start in 2024 has turned into a steady climb in recent weeks, with futures for West Texas Intermediate (CL=F) and Brent (BZ=F) up more than 9% and 7% year to date, respectively.

On Friday, WTI traded above $78 per barrel while Brent hovered above $83 per barrel, both on pace for their fourth weekly gain out of the past five.

Escalating tensions in the Middle East, easing concerns of too much US production, and ongoing cuts from the oil producers alliance, OPEC+, have kept prices on an upward slope.

A sliding greenback is also helping lift prices as oil is invoiced in US dollars.

Coinbase Global (COIN) shares soared as much as 17% on Friday after the largest US cryptocurrency exchange posted its first quarterly profit in two years as trading surged on a new wave of optimism about digital assets.

As Yahoo Finance’s David Hollerith reports, Coinbase earned $273 million in profits during the fourth quarter, well above analyst expectations. It was the first positive quarterly earnings result since the fourth quarter of 2021, when the last crypto boom was still raging.

Coinbase shares are up 180% over the last year.

Read more here.

Tech stocks fell on Friday morning while the 10-year Treasury yield (^TNX) jumped to 4.3% after a hotter-than expected wholesale inflation read indicated the Federal Reserve may push out its timeline to cut interest rates.

The S&P 500 (^GSPC) sank 0.3% after notching another record close in the prior session. The Dow Jones Industrial Average (^DJI) dipped 0.3%.

The tech-heavy Nasdaq Composite (^IXIC) fell 0.7% as Adobe (ADBE) stock slid more than 4% and Meta (META) sank more than 2%. Shares of the social media giant hit a record high of $486.28 in the prior session.

Stocks opened slightly lower on Friday after a hotter-than-expected reading on wholesale inflation.

The S&P 500 (^GSPC) fell slightly in the wake of another record closing high in the prior session. The Dow Jones Industrial Average (^DJI) dipped more than 100 points, or 0.4%. The tech-heavy Nasdaq Composite (^IXIC) hovered around the flatline.

The Producer Price Index gained 0.3% from December to January, higher than the 0.1% gain expected by economists. The data signals inflation could be reaccelerating, raising concerns that the Federal Reserve may push out the timeline to cut interest rates.

Nike (NKE) said late Thursday it’s sacking about 2% of its workforce, or 1,600 people.

The House of Jordan — but no longer Tiger Woods, who launched his own apparel line dubbed Sun Day Red this week (check out his shank in his return round at the Genesis Invitational yesterday, which he blamed on back spasms in the post-round presser) — had about 83,700 employees ahead of this pink slip round.

CEO John Donahoe blamed the need to free up investments in running, women’s apparel, and the aforementioned Jordan brand. This is part of the company’s fresh $2 billion restructuring plan over the next three years. In other words, more layoffs are likely coming from Nike this year, next year, and in 2026.

It’s interesting to see Nike’s investors yawn at this potentially margin-boosting cost cutting. The stock is down 2.3% year to date versus the 5.5% gain for the S&P 500. (It's down a modest 1% in premarket trading.) I think that says volumes about the real investor concern with Nike right now: the top-line growth outlook, especially in the important China market. Just look at the landscape!

Results from Restaurant Brands-owned (QSR) Burger King China underwhelmed this week, and the company is pulling back a touch on investing in the country until things improve. That fits with what we have heard in recent weeks on China from other consumer companies, such as Levi’s (LEVI).

According to a Stifel note I got this morning, one of their analysts met with P&G CEO Jon Moeller yesterday and discussed China weakness through P&G's higher-end SKII skincare product line. Nike gets about 15% of its annual sales from China. If the country isn’t working well in terms of sales, rest assured there is blowback on US shores.

And it looks like Nike’s US workers will have to pay the price for their execs not getting the forecasting job correct.