Stocks close higher, nudging the S&P 500 and Nasdaq to more highs
The S&P 500 rose 0.3%, inching past the record it set last week after a better-than-expected June jobs report.
The Nasdaq composite edged up 0.1%, enough of a gain to notch a new high for the second day in a row. The Dow Jones Industrial Average finished 0.4% higher.
Delta surged 12%, bringing other airlines along with it, after beating Wall Street's revenue and profit targets. The Atlanta airline also gave a more optimistic view for the remaining summer travel season than it had just a couple months ago.
The airline and other major U.S. carriers had pulled or slashed their forecasts in the spring, citing macroeconomic uncertainty amid President Donald Trump's tariff rollouts, which have consumers feeling uneasy about spending on travel.
'Companies are becoming more confident in the range of outcomes for tariffs,' said Michael Antonelli, market strategist at Baird. 'Companies are starting to understand what the playing field looks like a little bit better, even though we continue to have these kind of tariff announcements that get bounced back and forth.'
Delta's encouraging report boosted the entire airline sector. United jumped 14.3%, American climbed 12.7%, JetBlue gained 7.8% and Southwest finished 8.1% higher.
The market has been steadying following a downbeat start to the week as the Trump administration renewed its push to use threats of higher tariffs on goods imported into the U.S. in hopes of securing new trade agreements with countries around the globe.
Wednesday had been initially set as a deadline by Trump for countries to make deals with the U.S. or face heavy increases in tariffs. But with just two trade deals announced since April, one with the United Kingdom and one with Vietnam, the window for negotiations has now been extended to Aug. 1. That's given Wall Street a breather just in time for the start of corporate earnings season.
Wall Street analysts predict that companies in the S&P 500 will deliver 5% growth in second-quarter earnings, according to FactSet. That would mark the lowest rate since the fourth quarter of 2023.
Conagra Brands fell 4.4% Thursday after the maker of Slim Jim, Swiss Miss and other food products reported earnings and revenue that fell short of Wall Street's estimates. The company also lowered its earnings outlook, saying it expects continued cost increases due to tariffs.
Helen of Troy, the company behind Hydro Flask water bottles and OXO kitchen tools, sank 22.7% after its latest quarterly results came in below Wall Street's forecasts. The company said it would not be providing a fiscal year 2026 outlook, citing uncertainty over tariff policy and the economy.
Shares in AZZ rose 5.5% after the electrical equipment maker's latest quarterly earnings topped analysts' forecasts.
Earnings season shifts into high gear next week with JPMorgan Chase, Wells Fargo and Citigroup among the big banks due to report their results on Tuesday.
Beyond airlines, most of the sectors in the S&P 500 notched gains Thursday, led by banks and consumer-focused companies. JPMorgan and McDonald's each rose 1.8%.
Technology and communication services stocks were the only laggards. Autodesk fell 6.9% and Netflix ended 2.9% lower.
Shares of WK Kellogg vaulted 30.6% after Italian candy maker Ferrero agreed to acquire the cereal company in a deal valued at roughly $3.1 billion. The transaction includes the manufacturing, marketing and distribution of WK Kellogg Co.'s portfolio of breakfast cereals across the United States, Canada and the Caribbean.
Shares in mining company Freeport-McMoRan rose 3.6% after Trump said a 50% tariff on copper imports would take effect on Aug. 1. The price of copper rose 1.9% to $5.59 per pound.
All told, the S&P 500 rose 17.20 points to 6,280.46. The Dow added 192.34 points to 44,650.64. The Nasdaq gained 19.33 points to 20,630.66.
In economic news, the Labor Department reported Thursday that applications for unemployment benefits, a proxy for layoffs, fell last week, remaining in the historically healthy range they've been in the past couple of years.
Bond yields mostly rose, although the yield on the 10-year Treasury held steady at 4.34%.
European stock indexes closed mixed Thursday following an uneven finish in Asian markets.
Tokyo's Nikkei 225 fell 0.4%, weighed down by selling of exporters' shares amid the yen's appreciation, which cuts profits from exports, and dampened sentiment because of the lack of progress in the Japan-U.S. trade talks.
Veiga writes for the Associated Press.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNN
a few seconds ago
- CNN
AI and tech stocks slide as summer rally peters out
Tech news Investing Stocks AIFacebookTweetLink Follow Tech stocks were under pressure this week as Wall Street's AI enthusiasm slowed and investors adjusted portfolios after a strong summer rally. The Nasdaq Composite fell 0.67% on Wednesday after sliding 1.46% on Tuesday. The tech-heavy index was on track to snap back-to-back weeks of gains. Meanwhile, the broader S&P 500 fell 0.24% and posted its fourth day of losses in a row. The Dow hovered around the flatline. Tech stocks had steadily rallied in recent months, lifting the S&P 500 and Nasdaq to a streak of record highs. Now Wall Street is taking a breather while optimism about the AI boom is facing some friction. Palantir (PLTR), a star of the AI trade, fell 1.1% on Wednesday after falling 9.35% on Tuesday. Meanwhile, Nvidia (NVDA) edged lower by 0.14% on Wednesday after sliding 3.5% on Tuesday. 'Investors rotated out of high-momentum tech stocks, reflecting renewed jitters over the sustainability of the AI trade,' Ulrike Hoffmann-Buchardi, head of global equities at UBS, said in a note. Investors are also in wait-and-see mode ahead of a critical day for markets on Friday when Federal Reserve Chair Jerome Powell is set to deliver remarks at the Jackson Hole Economic Symposium. 'It's just a pause that may refresh as investors retrench and rethink how they want to position their tech dollars,' Rob Haworth, senior investment strategy director at US Bank Asset Management Group, told CNN. Powell's closely watched speech on Friday could provide signals about the Fed's potential rate-cutting path and comes at a key inflection points for markets after past months' ascent to record highs. Excitement about AI propelled markets higher in recent months, boosted by robust corporate earnings and enormous spending by companies like Meta and Microsoft. But Wall Street's eagerness was tested this week after Sam Altman, chief executive at OpenAI, said he thinks the market might be in a bubble. 'Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes,' Altman told reporters last week, according to The Verge. The OpenAI chief also said he thinks AI will provide value for the economy. 'Is AI the most important thing to happen in a very long time? My opinion is also yes,' he said. Also, researchers at MIT on Monday published a report detailing how the majority of companies testing new generative AI tools are seeing zero returns. While there was not an explicit catalyst for the decline of tech and AI stocks decline this week, investors said Altman's comments and the MIT report could be contributing to negative momentum. AI chip and semiconductor companies Advanced Micro Devices (AMD) and Marvell Technology (MRVL) were each down almost 7% this week. 'Altman's comments spooked some people when he talked about the AI bubble,' Dan Ives, head of global technology research at Wedbush Securities, told CNN. 'Tech stocks have had a massive run, so I think it's just typical that investors are starting to take some chips off the table going into Labor Day,' Ives said. 'But I believe it's going to be short lived.' Each of the Magnificent Seven tech stocks — Apple (AAPL), Alphabet (GOOGL), Amazon (AMZN), Meta (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA) — fell on both Tuesday and Wednesday, dragging down the broader market. As of Tuesday, they made up 33.5% of the S&P 500's total market value, according to S&P Dow Jones Indices, reflecting their outsized influence on the index's performance. 'Stocks have been on an absolute tear. Valuations have sprinted up,' said Ross Mayfield, an investment strategist at Baird. 'The fundamentals are good but not keeping pace with the price action.' 'I think along the way we'll see pockets of profit taking, even if it doesn't mark the end of the bull market in general,' Mayfield said. While tech dragged on the market, about 70% of stocks in the S&P 500 had closed higher on Tuesday, UBS' Hoffmann-Buchardi said. Sectors that outperformed included consumer staples, utilities and real estate. It's a sign that investors are shifting out of Big Tech and AI-related trades and toward more defensive stocks as they reassess the markets. Nvidia as of Monday had surged 93% since a low point in early April. 'We've been expecting this type of a pullback,' said Jay Hatfield, chief executive at Infrastructure Capital Advisors, who said he has taken down his exposure to tech in recent months. It's also the start of a historically weak season for stocks, Hatfield said. 'We're neutral on the market right now, but still really bullish for year end.' Palantir is still up 106% this year. But shares in Palantir are down six days in a row and had dropped as much as 9.8% on Wednesday before paring losses, reflecting the volatility in AI stocks. 'Now we're getting the downward momentum,' Hatfield said. 'Palantir is like the poster child for excessive valuation, and those investors are learning that the momentum works in both directions.'
CBS News
a minute ago
- CBS News
4 reasons why the Trump tariffs haven't caused U.S. inflation to soar
Despite a barrage of new tariffs imposed by the Trump administration this year on dozens of U.S. trade partners, the prices of goods and services across the U.S. have defied many economists' expectations and remained relatively stable. Economists caution that just because tariffs have yet to trigger a renewed bout of inflation, there is no guarantee that prices won't surge later this year. They note that recent data shows a modest rise in the cost of items including clothing, home furnishings and appliances. Tariffs — meaning the rate importers must pay at the border for imported goods — also take a long time to seep into the economy. That's because companies often trying to hold off on passing along higher costs to customers to avoid losing market share to rivals. Yet experts acknowledge that tariffs have yet to unleash the kind severe inflationary pressures that could cause prices to spike. For their part, White House officials have consistently maintained that foreign exporters — not American consumers — will bear the brunt of added tariff costs. "Despite the doom-and-gloom predictions of inflation and recession, it's been months since Liberation Day, and inflation is trending towards an annualized rate not seen since President Trump's first term, while a recent [Council of Economic Advisers] analysis found that prices of imported goods are actually declining," White House spokesman Kush Desai said in a statement to CBS MoneyWatch, alluding to the baseline and other tariffs President Trump originally announced on April 2. Here are four reasons economists say explain why inflation isn't jumping despite the highest U.S. tariffs in decades. Despite President Trump's many threats to jack up levies on imports, the actual average tariff rate being charged on U.S. imports is not as high as what has been announced, data shows. The average tariff rate on U.S. imports in June was 9% — well below the 15% that many economists were forecasting earlier this year following Mr. Trump's slew of tariff announcements, according to investment advisory firm Capital Economics. "It's not so much that the reaction to tariffs has been low, it's that the effective tariff rate increase has been relatively limited up until June," Mark Cus, an economist at Barclays, told CBS MoneyWatch. Actual U.S. tariffs remain lower than earlier estimates in part because countries facing steeper levies are sending fewer goods to the U.S., according to Barclays and Capital Economics. By contrast, countries with below average tariff rates are shipping more goods to the U.S. The upshot: Average tariff rates on imports are lower than many economists were projecting earlier this year. Additionally, many goods imported into the U.S. have been exempted from steeper tariffs. Of the roughly $258 billion worth of imports that hit the U.S. retail market in June, only 48% were subject to tariffs, Barclays data shows. For example, pharmaceuticals, some electronics, and many imports from Canada and Mexico are exempt from any new tariffs. "While dutiable goods face elevated tariff rates, a substantial portion of U.S. imports remains duty-free," Barclays analysts said in a recent report. "This is a major contributor to the low effective tariff rate." U.S. retailers built up their inventories earlier this year in expectation that the Trump administration would hike tariffs on imported products and parts. Many retailers are still selling those non-tariffed products, allowing them to delay price hikes, experts said. For example, "There was a big jump in imports of goods from Canada that would later be tariffed before the tariffs kicked in, and perhaps imports of those goods in May and June were relatively low, and that shows up as a smaller amount of dutiable goods," Barclays' Cus told CBS MoneyWatch. Eventually, experts warn, retailers will exhaust those lower-cost goods imported earlier in the year, which could lead to higher prices down the road. For now, many retailers are eating the additional tariff costs. Businesses "have been willing to absorb the initial hit via lower margins, although we suspect that was mostly a temporary development as those firms waited for more clarity on where tariff rates would settle," analysts with investment adviser Capital Economics said in a recent report. "We doubt that is a sustainable outcome over the longer term, however. As the uncertainty over tariff levels eases over the next couple of weeks, giving retailers more clarity on rates over the next year or two, we would expect more firms to raise prices," they said. Tariffs typically take many months to seep into company supply chains and and show up in the prices consumers pay at the store. The full impact of tariffs plays out not immediately but over an extended period of time, peaking roughly a year after they take effect, a June Federal Reserve Bank of Dallas report noted. That means any U.S. tariffs imposed this year could would be unlikely to have much of an impact on inflation until later this year and into 2026. "Up to now there has been only limited passthrough from tariffs into final consumer prices, but we still expect the impact to gradually mount in the second half of this year," Capital Economics analysts said in a report. A final possibility is that the fears that the Trump administration's turn toward protectionist trade policies would trigger another severe bout of inflation are overblown. The White House has maintained that such a shift will protect jobs, and make the U.S. more competitive globally. "The Administration has consistently maintained that the cost of tariffs will be paid by foreign exporters who rely on access to the American economy, the world's best and biggest consumer market," the White House's Desai said in a statement.
New York Times
a minute ago
- New York Times
Their Window Seats Lacked Windows, So Delta and United Passengers Sued
Two lawsuits filed Tuesday accuse Delta Air Lines and United Airlines of knowingly charging passengers extra for window seats that were not next to a window. The class action suits were filed against Delta in federal court in New York and against United in federal court in San Francisco, and accuse each carrier of selling more than one million window seats that were, in fact, windowless. 'We're seeking to hold United and Delta accountable for charging customers premiums for products that they didn't deliver, and misrepresenting the nature of the products that they did deliver,' Carter Greenbaum, an attorney whose law firm, Greenbaum Olbrantz LLP, filed the suits, said in an interview. 'They sold customers window seats and ended up seating them next to a wall.' Delta declined to comment. United did not immediately respond to a request for comment. The suits claim that some of the airlines' Boeing 737, Boeing 757 and Airbus A321 aircraft were built with at least one 'window seat' that is adjacent to a wall, not a window, generally because of the placement of air conditioning ducts or electrical components. Other carriers, such as American Airlines and Alaska Airlines, operate similar aircraft types but disclose during the seat selection process if a seat does not include a window. 'United and Delta could easily implement the same disclosures,' Mr. Greenbaum said. The suits say United and Delta 'affirmatively' describe 'every wall-adjacent seat as a 'window' seat,' even when they know certain seats do not include a window. Delta passengers may be charged more than $70 to select a window seat compared with a basic economy fare, and United passengers may pay more than $50 to select a window seat in basic economy on domestic flights, or $100 on international flights, according to the suits. Want all of The Times? Subscribe.
