Stock market today: Dow, S&P 500, Nasdaq move higher with Apple earnings in the wings
US stocks gained steam on Thursday afternoon as investors digested megacap tech earnings and waited for Apple (AAPL) results for more clues on prospects for Big Tech.
The S&P 500 (^GSPC) gained 0.5%, while the Dow Jones Industrial Average (^DJI) rose nearly 0.4%. The tech-heavy Nasdaq Composite (^IXIC) was up nearly 0.3%.
Right ahead of the closing bell, President Donald Trump once again teased looming 25% tariffs on Mexico and Canada. The US dollar (DX=F) index spiked on the news, reversing earlier losses to close near flat.
After the Federal Reserve stood pat on interest rates as expected, investors have turned to parsing earnings reports — and in particular, the first wave of results from the “Magnificent Seven” companies that have driven broader stock market gains.
Tesla’s (TSLA) stock ticked higher despite an earnings miss as investors took on trust its vow to return to growth in 2025. Meanwhile, Meta’s (META) quarterly earnings beat helped lift its shares, but Microsoft stock slumped, down 6%, after its cloud revenue fell short.
Faith in Big Tech was put to the test after DeepSeek’s cheaper AI model rattled assumptions about the likelihood of a payoff, the focus was on the rationale for their massive AI investments.
The Bureau of Economic Analysis’s advance estimate of fourth-quarter gross domestic product (GDP) showed the US economy grew at an annualized pace of 2.3%, below the 2.6% expected by economists surveyed by Bloomberg.
Meanwhile, American Airlines (AAL) CEO Robert Isom expressed condolences following the collision between an American passenger jet and a US army helicopter on Wednesday night.
“We’re absolutely heartbroken for the family and loved ones of the passengers and crew members and also for those that were on the military aircraft,” Isom said.
After the bell, Apple (AAPL) reported its fiscal first quarter earnings after the bell on Thursday, beating expectations on the top and bottom lines but falling short on iPhone revenue. Shares were down about 1% following the report.
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Apple earnings top Wall Street forecasts while iPhone, China sales fall short
Yahoo Finance’s Dan Howley reports:
Apple (AAPL) reported its fiscal first quarter earnings after the bell on Thursday, beating expectations on the top and bottom lines but falling short on iPhone revenue. Sales out of the company’s Greater China region were also lower than Wall Street anticipated in the quarter.
For the quarter, Apple reported earnings per share of $2.40 on revenue of $124.3 billion. Analysts were looking for EPS of $2.35 and revenue of $124.1 billion, according to Bloomberg consensus estimates.
Apple’s iPhone segment brought in $69.1 billion versus expectations of $71 billion, down slightly from the $69.7 billion the company reported for the segment in the last year. The company’s Services business generated $26.3 billion in revenue, in line with Wall Street’s expectations. Greater China sales topped out at $18.5 billion. Wall Street was expecting $21.5 billion.
China has been a persistent area of trouble for Apple over the last two years. Sales in the region declined 8% in 2024, falling to $66.9 billion, and 2% in 2023. At the time, Apple blamed weakness in the renminbi versus the dollar and lower iPhone and iPad sales.
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A wild final 30 minutes for markets
Stocks hit their lows of the day with about 20 minutes left in the trading session after President Trump once again teased 25% tariffs on Mexico and Canada. The US dollar index spiked on the news, reversing earlier losses, and stocks hit their lows of the day.
However, as the intraday chart below shows, that selling action was short-lived.
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What to watch in Apple earnings
Yahoo Finance’s Dan Howley reports:
Apple (AAPL) is set to announce its first quarter earnings after the bell on Thursday amid concerns that iPhone sales aren’t getting the kind of boost from its Apple Intelligence platform that investors initially hoped.
Both Jefferies and Loop Capital downgraded Apple’s stock last week, with Jefferies analyst Edison Lee saying he expects Apple to report lower-than-anticipated results for the December quarter and miss on expectations for the second quarter.
Oppenheimer also downgraded shares on Wednesday, citing slower iPhone growth pressured by competition in China and a lack of AI innovation to catalyze a new upgrade cycle.
According to estimates by IDC and Canalys, overall iPhone market share fell 1% year over year in Q4 to 23% despite the broader market for smartphone shipments increasing by 3%. Apple kicked off its big AI push in October, releasing the first raft of its Apple Intelligence updates.
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One chart shows why the Fed is so uncertain about the path for rates
On Wednesday, Federal Reserve Chair Jerome Powell admitted the economic outlook for 2025 is likely more uncertain than normal.
“In the current situation there’s probably some elevated uncertainty because of the significant policy shifts in those four areas that I mentioned, tariffs, immigration, fiscal policy, and regulatory policy,” Powell said on Wednesday.
Deutsche Bank chief US economist Matthew Luzzetti told Yahoo Finance looking at how tariffs could impact the inflation outlook “epitomizes” why the Fed is likely to take a cautious outlook to cutting rates.
Without tariffs, Luzzetti would expect core PCE inflation, the Fed’s preferred gauge, to fall to 2.5% by the end of 2025. This would be in line with the Fed’s targets.
“But if you factor in 25% tariffs on Mexico and Canada, it is very easy to get to 3% plus core PCE inflation forecast this year and acceleration in inflation not a deceleration,” Luzzetti said.
This makes Luzzetti believe the chart below is “exactly why the Fed has uncertainty right now and is in a wait and see mode.”
And while not the base case, Luzzetti added that a significant reacceleration in inflation above 3% could bring the conversation of Fed rate hikes back to the forefront.
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UPS stock sinks 15% after weak sales forecast, scaling back of Amazon deliveries
UPS’s (UPS) announcement that it will cut back on deliveries for its largest customer, Amazon (AMZN), sent its stock tumbling as much as 15% on Thursday.
As part of an agreement with Amazon, UPS said it said would cut the volume of Amazon deliveries it transports by more than 50% by the second half of 2026. UPS also said Thursday it expects revenue of “approximately $89 billion” in 2025, below Wall Street’s consensus forecasts of $94.9 billion.
Evercore ISI analyst Jonathan Chappell wrote in a note to clients that the quarterly release had “something for everyone … but more for the bears.” Chappell described the pace of the reduction of Amazon deliveries as a “surprise.”
“UPS will realign its network for this volume loss, but the speed at which it will unfold will negatively impact near-term results,” Chappell wrote.
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Fed’s wait-and-see approach likely won’t be shaken by new GDP and inflation numbers
Yahoo Finance’s Jen Schonberger reports:
A new GDP report Thursday and the expectation of a sticky inflation reading Friday should reinforce the Federal Reserve’s new wait-and-see approach on interest rates.
Fed Chair Jay Powell outlined that approach Wednesday after the central bank decided to keep rates on hold, its first pause following three consecutive cuts at the end of 2024.
Policymakers are adopting a more cautious stance as they evaluate several unknowns about the economic policies of the new Trump administration.
Read more here.
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Fewer homes went under contract in December amid high rate pain
Yahoo Finance’s Claire Boston reports:
Housing contract activity slowed down in December, suggesting higher mortgage rates are giving some buyers pause.
The Pending Home Sales Index, which tracks contract signings on existing homes, dropped 5.5% from November to 74.2, snapping a four-month streak of gains, according to the National Association of Realtors (NAR). An index level of 100 is equal to contract activity in 2001.
Contract signings declined in all parts of the country, led by the most expensive regions where mortgage rates have the biggest effect on affordability. The West saw a 10.3% drop in activity, followed by the Northeast with an 8.1% decline.
Read more here.
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Nasdaq wavers as shares of Nvidia, Microsoft sink
The Nasdaq Composite (^IXIC) struggled to gain on Thursday, dragged by shares of software giant Microsoft (MSFT) and chip maker Nvidia (NVDA).
Microsoft fell roughly 6% after the software giant’s quarterly results. Wall Street analysts pointed out Microsoft’s Azure growth was came in lighter-than-expected and may not reaccelerate in the back half of the year.
Meanwhile Nvidia shares fell more than 3%. Earlier this week the AI chip giant was hit by jitters over China’s DeepSeek less expensive and more efficient artificial intelligence model, and speculation that the Trump administration is considering stricter limits on the company’s sale of its chip technology in China.
Nvidia is down roughly 16% over the past four days.
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Comcast stock stinks after broadband and Peacock subscribers disappoint
Comcast (CMCSA) stock fell over 10% early Thursday after the company reported a bigger-than-expected drop in broadband customers in the fourth quarter and failed to add more subscribers to its Peacock streaming service.
The company reported a decline of 131,000 broadband users, more than the 100,000 loss Comcast Cable CEO Dave Watson estimated in December. The escalating losses reflect recent competitive challenges as mobile providers like Verizon (VZ), T-Mobile (TMUS), and AT&T (T) enter the space with more flexible offerings to attract lower-income consumers.
Still, the company said it remains committed to its connectivity business and announced strategic changes to become a “challenger” in the industry and “play to [its] strengths” as internet traffic rapidly expands amid the streaming boom.
“You will see us shift our strategy to package mobile with more of our higher-tier broadband products, both for new and many of our existing customers,” Comcast president Michael Cavanagh said on the earnings call.
Comcast’s broadband struggles come as the company also reported a decline of 311,000 TV consumers as more consumers cut the cable cord in favor of less expensive streaming services.
To that point, the company continued to stress the importance of Peacock, although subscriber growth was flat quarter over quarter with total subscribers remaining at 36 million.
Comcast did improve profitability, reporting an adjusted EBITDA loss of $372 million compared to a loss of $825 million in the same period last year. Losses are expected to improve throughout the course of the year, according to management.
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Bitcoin rises 3% to hover near $106,000
Bitcoin (BTC-USD) rose to hover near $106,000 per token on Thursday. Token bulls…
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