Stocks Rise as Fed Chair Powell Confirms Interest Rate Cuts Likely; Nvidia Up 4%

Intuit Tumbles on Surprise Loss, Soft Outlook

8 minutes ago

Intuit (INTU) is the S&P 500‘s worst performer Friday, a day after the company reported a surprise fourth-quarter loss and a soft profit outlook.

The TurboTax and Credit Karma parent sees fiscal 2025 first-quarter earnings per share between 61 cents and 66 cents and full-year EPS between $12.34 and $12.54, both short of expectations. 

Intuit posted fiscal 2024 fourth-quarter revenue of $3.18 billion, up 17% year-over-year and above estimates. However, the company swung to a per-share loss of 7 cents from a profit of 32 cents a year ago, missing analysts’ expectations of a 22-cent profit.

The results come after Intuit announced plans in July to lay off 1,800 employees, roughly 10% of its workforce, but replace them with a nearly equal number of staffers focused on artificial intelligence (AI) in fiscal 2025. 

Intuit shares were down 7% in recent trading.

–Andrew Kessel

Nvidia Earnings to Take Center Stage Next Week

58 minutes ago

Now that the Powell speech is in the rear view mirror, attention turns to next week’s earnings from artificial intelligence chipmaker Nvidia (NVDA).

The AI investor darling will report second-quarter results for fiscal 2025 after the bell on Wednesday. Investors will be watching for sustained data center growth and any updates on reported delays affecting the new Blackwell chip.

Analysts project revenue will grow to $28.84 billion, according to estimates compiled by Visible Alpha, which would be more than double Nvidia’s revenue in the same period a year ago. Net income is also expected to more than double from a year earlier to $14.95 billion, with a sharp decline in earnings per share (EPS) expected primarily as a result of the company’s 10-for-1 stock split.

Nvidia has blown past earnings expectations in recent quarters, and investors will no doubt be expecting blockbuster results again next week.

You can read the full earnings preview here.

Nvidia shares were up 3.5% in mid-afternoon trading Friday. The stock has gained nearly 160% so far in 2024.

–Naomi Buchanan

Market Betting on Deeper Rate Cuts After Powell Remarks

3 hr 2 min ago

Market participations have raised their expectations for the Federal Reserve to aggressively cut interest rates after Fed Chair Jerome Powell’s eagerly awaited speech at the Jackson Hole Economic Policy Symposium on Friday.

At around noon ET, traders were pricing in about a 35% chance the Fed will cut its benchmark interest rate by half a percentage point to a range of 4.75%-5.00% at the September 18 policy committee meeting, according to the CME Group’s FedWatch tool, which forecasts interest rate movements based on fed funds futures trading data. That’s up from the 24% likelihood priced in on Thursday.

Traders were also pricing in a 76% chance the Fed will trim a full percentage point from the fed funds rate, which is at a 23-year high, by the end of 2024. That compares with the 64% likelihood that was being priced in yesterday.

Powell said Friday that he’s confident that inflation is headed toward the Fed’s 2% annual target, while “the labor market has cooled considerably.”

“The time has come for policy to adjust,” Powell told economists gathered in Jackson Hole. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”

Powell noted that the labor market risks are currently higher than the risk of inflation flaring up again. The Fed has a dual mandate to maintain price stability and promote full employment.

Cava Stock Sizzles as New Steak Offering Outperforms

3 hr 47 min ago

Cava Group (CAVA) shares surged Friday, a day after the company raised its 2024 guidance and said its new grilled steak is “significantly outperforming” expectations.

The fast-casual Mediterranean chain boosted its 2024 same-store sales estimate to 9% from 5.5% at the midpoint and its adjusted EBITDA midpoint projection to $111.5 million from $102.5 million. In the second quarter, sale-store sales growth was 14.4% year-over-year, and Cava added 18 net new locations. 

Revenue for the period grew 35% to $233.5 million but diluted earnings per share (EPS) declined by 4 cents to 17 cents. Both topped analysts’ expectations.

Cava shares were up 17% in recent trading. The stock has gained 178% so far in 2024.

–Andrew Kessel

Major Indexes Looking for a Second Straight Week of Gains

5 hr 31 min ago

Heading into Friday’s session, major indexes are near flat for the week, as stocks have bounced around ahead of Fed Chair Jerome Powell’s speech on Friday.

The S&P 500, Nasdaq Composite and Dow Jones Industrial Average, which are looking to post weekly gains for the second consecutive week, are also near unchanged for the month, with the S&P 500 and Nasdaq up slightly while the Dow is slightly lower.

Workday Shares Soar on Positive Outlook

5 hr 51 min ago

Workday (WDAY) shares were up 14% in premarket trading after the human resources and capital management software provider reported quarterly results that topped estimates and pointed to growth opportunities in international markets.

The shares have carved out a double bottom between June and August, a well-known chart pattern that indicates an upside reversal after an extended downtrend.

Investors should monitor important overhead price levels in Workday shares at $264, $279, and $306.

Read our full technical analysis piece here.

–Timothy Smith

Futures Point to Higher Open for Major Indexes

6 hr 45 min ago

Futures tied for the Dow Jones Industrial Average were up 0.4%.

S&P 500 futures were up 0.5%.

Nasdaq 100 futures were up 0.8%.