The S&P 500 rose slightly on Tuesday as investors looked ahead to a major earnings report later this week.
The broad market index gained 0.16% to close at 5,625.80, while the Nasdaq Composite crept 0.16% higher to end at 17,754.82. The Dow Jones Industrial Average rose 9.98 points, or 0.02%, to end at 41,250.50, its second record close in a row.
Investors are eager to see earnings from top artificial intelligence beneficiary Nvidia after Wednesday's closing bell. Shares of the graphics processing unit manufacturer advanced about 1.5% on Tuesday. Nvidia has become a key bellwether for tech stocks and AI more broadly, and investors will look toward its fiscal second-quarter results to gauge the health of the AI trade.
"There's very little economic data of importance until after Nvidia, so you really are in kind of a wait-and-see [situation]," said Baird analyst Ross Mayfield. "The trend in the market right now is a rotation away from tech and so Nvidia could change all of that tomorrow, but until then, I think the predominant trend in the market is going to be to stay put, and you kind of have this light volume, listless market as you wait."
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Stocks are also trying to find stable footing after a brutal start to the month. Investors have grown more optimistic, however, after Federal Reserve Chair Jerome Powell signaled on Friday that the central bank's next move will be to cut benchmark interest rates. Powell did not specify when, or by how much, interest rates would be reduced.
Traders are unanimously forecasting a rate cut at the central bank's Sept. 17-18 policy meeting of at least 25 basis points, according to data from the CME Group's FedWatch Tool.
Stocks close higher
Money Report
The three major stock averages all closed higher Tuesday afternoon.
The S&P 500 gained 0.16% to end at 5,625.80, and the Nasdaq Composite also added 0.16% to settle at 17,754.82. The Dow Jones Industrial Average gained 9.98 points, 0.02%, and finished at 41,250.50.
— Lisa Kailai Han
Nvidia earnings will 'set the tone' for market
Nvidia earnings after the bell Wednesday will play a key role in the market's direction from here, according to Wolfe Research.
"Over the very near-term, our sense is that NVDA's earnings report after the close on Wednesday will set the tone for markets before the key payrolls report on September 6th," wrote Chris Senyek in a Tuesday note.
Read more on what Wall Street is on the lookout for here.
— Samantha Subin
Technology leads the broader market Tuesday
Information technology rose 0.6% Tuesday, making it the best-performing sector in the S&P 500.
Chipmaker KLA Corporation, Adobe and Teradyne led the sector's rise with gains of 1.5% each. Nvidia also advanced 1.7% ahead of its earnings announcement Wednesday after the bell.
Financials were the second-highest sector on the day with a 0.5% rise.
— Hakyung Kim
Bank of America remains cautious on Best Buy heading into fiscal second-quarter print
Bank of America is retaining a cautious stance on shares of Best Buy ahead of the electronics retailer's fiscal second-quarter results.
"We maintain our underperform rating given near-term pressures of a more challenging discretionary environment and an increasingly promotional appliance category, further pressured by the removal of free installation and clearance of old generation product," wrote analyst Robert Ohmes.
Underpinning the rating are concerns of a "more conservative" selling, general and administrative expenses forecast and weakness in gaming, appliance and home theater products that will temper any computing share gains. Pricing investments could also hurt margins this year.
Shares of Best Buy have risen about 13% year to date, but the firm's $70 price target implies more than 21% downside from Monday's close.
Some on Wall Street remain bullish on the company heading into the print. That includes JPMorgan's Christopher Horvers. He retained an overweight rating on the stock, highlighting potential upside to margins and the likelihood of stronger average selling prices per unit driven by an earlier-than-expected innovation-fueled replacement cycle.
— Samantha Subin
Regional bank stocks underperform larger peers
Friday's pop for regional bank stocks appears to be fizzling out.
The SPDR S&P Regional Banking ETF (KRE) fell 1% on Tuesday, on track for its second straight negative session. The modest declines come as long-term Treasury yields have ticked up and have partially reversed a 5% jump for the financial stocks on Friday.
The larger peers of the regional banks were holding their ground better. Shares of JPMorgan, Citi and Morgan Stanley all ticked up less than 1%. Meanwhile, the U.S.-traded shares of Barclays rose 1.5% and hit a new 52-week high.
— Jesse Pound
S&P 500 to rise another 7% and hit 6,000 by end of year, Capital Economics says Tuesday
The S&P 500 index will climb almost 7% and reach 6,000 by the end of 2024, so long as the U.S. economy makes a soft landing "and enthusiasm around AI rebounds further," Capital Economics deputy chief markets economist Jonas Goltermann wrote in a note on Tuesday.
Since the summer correction in July and early August, technology stocks remain "some way below their high-water marks from early July, despite rebounding since the stock market trough on Aug. 5. The rest of the equity market, which had barely made any gains at all in Q2, has made up some ground, on net. Nvidia's Q2 earnings report this week will be a key litmus test for sentiment around AI and the prospects for the tech sector more broadly," Goltermann said.
Meanwhile, the interest rate outlook over the next 18 months is no worse today than it was at the height of the sell-off, the researcher said. "Even though market participants now discount somewhat less easing over the rest of 2024 than in the immediate aftermath of the [July] non-farm payrolls data, the cumulative amount of cuts discounted by the end of 2025 is now roughly the same as on August 5, the peak of the post-payrolls panic."
Capital Economics sees the S&P 500 rising another 16.7% in 2025 to reach 7,000 by the end of next year. In the CNBC survey of Wall Street strategists, only Evercore ISI forecasts the S&P 500 will get to 6,000 this year.
— Scott Schnipper
Costco shares touch new record
Costco touched an all-time high on Tuesday, crossing the $900 level for the first time.
Analyst Rupesh Parikh on Tuesday pointed out the wholesaler's expanding gift card offerings as part of a broader effort to better offerings outside of the food aisles. The firm reported seeing Uber, Instacart and DoorDash gift cards of $100 value for sale at just $79.99.
— Alex Harring
Small-cap stocks saw unusual breadth during Friday's rally
Friday's market rally following Federal Reserve Chair Jerome Powell's remarks in Jackson Hole, Wyoming, brought a uniquely high showing of breadth among small-cap names, according to Canaccord Genuity.
The small cap-focused Russell 2000 climbed more than 3% on Friday, outperforming the broader market. More than 95% of members were higher in the session, an unusually high level, analyst Michael Welch found. More than 94% saw higher volume.
In fact, Welch said there has only been six times since 1995 when at least 94% of Russell 2000 stocks were higher on both return and volume.
"Such strength in breadth is rare," he told clients.
From these points, the Russell 2000 usually sees consistent gains over the next six to 12 months. However, the one to three months immediately following can bring choppiness.
— Alex Harring
See the stocks moving in midday trading
These are some of the stocks moving midday:
- Hain Celestial Group — Shares surged more than 23% after the food company behind Terra chips and Garden Veggie Straws posted fiscal fourth quarter earnings that beat expectations.
- Trip.com — U.S. shares of the China-based travel company popped 9% after second-quarter revenue surpassed expectations.
- Eli Lilly — The drugmaker's stock rose close to 1% following the launch of a cheaper version of its weight loss drug.
Click here for the full list.
— Alex Harring
Just 1 stock in the S&P 500 hits new 52-week low
During Tuesday's trading session, Walgreens Boots Alliance was the only stock in the S&P 500 index to reach a new 52-week low.
On the other hand, 31 tickers in the 500 stock index hit new 52-week highs. These included:
— Lisa Kailai Han, Gina Francolla
Hanesbrands shares jump 6% on Tuesday after UBS says stock could be at 'major inflection point'
Casual apparel retailer Hanesbrands could see a long-awaited turnaround, according to UBS.
Analyst Jay Sole lifted his price target by $1.50 to $6.50, which implies just 3.3% potential upside for shares. The company's stock price has declined roughly 75% since March 2015, compared to the S&P 500's 170% gain, he pointed out. This year, Hanesbrands is up more than 48%.
Shares jumped 6% on Tuesday, reaching a 52-week high.
"Following our meeting with management we believe HBI has an opportunity to flip the narrative around the stock for the first time in many years. This scenario is contemplated in our upside case," Sole said in a Tuesday note. "However, our rating remains Neutral. We want to see more evidence HBI can execute its strategy before considering recommending the stock."
According to Sole, Hanesbrands could be at a "major inflection point" given that its new CEO has ramped up investment into product innovation and marketing and that the company's sale of its Champion business is set to be completed in the second half of this year. The sale could drive a 15% EBIT margin, the analyst said.
— Pia Singh
Energizer Holdings gains 6% on back of Truist upgrade
Shares of battery manufacturer Energizer Holdings gained more than 6% Tuesday morning following an upgrade from Truist Securities to buy from hold. The financial firm also raised its 12-month price target to $40 from $30.
In a Tuesday note, analyst Bill Chappell listed two reasons for the stock's current trading price at a "meaningful discount" against its consumer staple peers: a longstanding investor bias against the battery category and a high leverage ratio while rates were rising. However, he sees both these issues clearing up in the near future.
"We believe the overhang on the stock created by these issues will start to ease in the coming quarters as the battery segment returns to organic growth and the U.S. interest rate environment improves," the analyst wrote.
— Lisa Kailai Han
Consumer confidence, inflation outlook improves in August
Confidence among consumers increased in August while the outlook for inflation was the lowest since the Covid-19 pandemic hit, according to The Conference Board.
The board's monthly survey showed the confidence index rising to 103.3, up 1.4 points from July and better than the Dow Jones forecast for 101.
On inflation, the 12-month expectation dipped to 4.9%, well above the Federal Reserve's 2% goal but the lowest going back to March 2020. Even with that improved outlook, a gauge of plans to purchase a home fell to a fresh 12-year low.
On the employment picture, the survey's "plentiful" index for jobs fell to 32.8%, while the "hard to get" measure inched up to 16.4%.
— Jeff Cox
Strong quarterly earnings propel Hain Celestial stock 31% higher
Shares of Hain Celestial were up 31% Tuesday morning after the food and beverage company reported its latest earnings.
Hain Celestial reported adjusted fiscal fourth-quarter earnings of 13 cents, while analysts polled by FactSet were expecting earnings of just 8 cents. However, the firm's revenue of $418.8 million came in below the $419.4 million estimate.
Hain Celestial's rise made it the best-performing stock in the S&P 1500 index Tuesday morning.
— Lisa Kailai Han
Super Micro Computer falls on back of short-seller report
Shares of Super Micro Computer were down more than 4% after short seller Hindenburg Research published a report targeting the data server company. Hindenburg said its investigation found "glaring account red flags," along with other issues.
CNBC has not been able to verify Hindenburg's accusations or if the firm has a short position on the stock. CNBC also reached out to Super Micro Computer for comment.
Super Micro Computer has had a tough month, losing more than 23% in August.
— Fred Imbert
Goldman sees Libya production halt as short lived, lowers Brent forecast
The disruption to production in Libya that has pushed U.S. crude prices higher will likely be short lived, according to Goldman Sachs.
U.S. crude oil surged more than 3% on Monday on reports that the eastern government in Libya is halting production, but prices have pulled today to trade below $77 per barrel.
Goldman expects 600,000 barrels per day of Libyan production to fall off the market in September and 200,000 barrels per day in October.
But the investment bank has lowered its forecast for Brent as demand slows in China due to the adoption of electric vehicles, and U.S. supply outpaces expectations on efficiency gains.
Goldman lowered its Brent forecast by $5 to a range of $70 to $85 per barrel, with the global benchmark averaging $77 per barrel in 2025 compared to $82 previously.
— Spencer Kimball
Dow slips from record close to start Tuesday trading
After closing at a record high Monday afternoon, the Dow Jones Industrial Average opened lower on Tuesday.
The 30-stock index lost 50 points, or 0.1%. The S&P 500 slipped 0.3% and the Nasdaq Composite fell 0.4%.
— Lisa Kailai Han
Housing prices rose in June, but pace of increase eases
Home prices in the largest U.S. cities increased more than expected in June, according to the S&P CoreLogic Case-Shiller Indices.
The 20-city composite index showed a 6.5% annual gain, down from 6.9% in May but ahead of the Dow Jones estimate for 6.3%. On a monthly basis, the index rose 0.4%.
The Case-Shiller national index showed prices up 5.4% in June, the smallest gain since November 2023. Similarly, a separate measure released Tuesday from the Federal Housing Finance Agency showed the annual price increase at 5.1%, its smallest 12-month gain in a year.
— Jeff Cox
Stocks on the move before the bell
Here are the stocks making the biggest moves in premarket trading:
- Paramount Global — The media conglomerate's stock dropped nearly 5% after Edgar Bronfman Jr. withdrew his bid for the media company. This clears a path for Skydance Media to take over Shari Redstone's media empire. Paramount expects the deal with Skydance to close in the first half of 2025.
- Cava Group — The restaurant stock fell more than 8% after several corporate insiders and a major shareholder disclosed in filings that they were selling some of their holdings.
- JD.com — Shares of the Chinese e-commerce stock climbed about 3% after the company announced a $5 billion buyback program to run between September 2024 and August 2027.
Read the full list here.
— Samantha Subin
Strong tech earnings could reverse rate-cut expectations, Nomura says
August began with a significant sell-off in the technology sector, but Federal Reserve Chair Jerome Powell's recent dovish comments helped reverse some of this pullback.
But with Powell's commentary already largely priced into the market, Nomura analyst Naka Matsuzawa believes upcoming tech earnings that are stronger than anticipated could reverse some of these expectations.
"This week US tech companies' earnings reports will be the main focus, and if the risk of a collapse in tech stocks subsides, this pricing-in of rate cuts could be partially reversed," he wrote in a Monday note.
— Lisa Kailai Han
Market dips likely to be 'shallow,' Vital Knowledge says
Don't fret too much over pullbacks in the S&P 500 at the moment, according to Adam Crisafulli of Vital Knowledge.
"The [S&P 500] is running into a bit of turbulence as it attempts to break above its closing high from 7/16, but bulls still have powerful tailwinds working in their favor, including goldilocks data, monetary easing, and solid Jul-end earnings," he said in a note.
"Unless one of those forces were to waver, it's likely any dip will be shallow and brief (and of the three, the only "existential" threat is a sharp slowdown in growth, which doesn't seem to be occurring)," he added.
— Fred Imbert
Where all three major indexes stand year to date after the Dow's fresh record high on Monday
The Dow Jones Industrial Average notched a fresh intraday and closing record high on Monday, which puts the 30-stock index up 9.4% in 2024. The S&P 500 has advanced nearly 18%, and the technology-heavy Nasdaq Composite has also gained roughly 18%.
— Gina Francolla, Brian Evans
Apple stock slides after hours after company announces CFO exit
Shares of iPhone maker Apple fell less than 1% in extended trading following news that Chief Financial Officer Luca Maestri will be replaced on Jan. 1.
Kevan Parekh, Apple's current vice president of financial planning and analysis, will assume the CFO role when Maestri steps down, the company said. Maestri will remain at Apple and lead teams focusing on IT, security and real estate development
— Brian Evans
Stocks futures open lower
Stocks futures were lower on Monday after the Dow Jones Industrial Average closed at a fresh record high.
Futures tied to the 30-stock Dow edged down 24 points, or 0.06%. S&P 500 futures slipped 0.08%, while Nasdaq 100 futures fell 0.1%.
— Brian Evans
