Stocks fell on Tuesday, signaling a pause in the November rally as investors awaited results from artificial intelligence chip maker Nvidia (NVDA) and the publication of the minutes of the Federal Reserve.
At mid-morning, the benchmark S&P 500 index (^GSPC) fell about 0.4%, after the stock indicator closed at its highest level since August. The Dow Jones Industrial Average (^DJI) and the tech-heavy Nasdaq Composite (^IXIC) also fell, falling approximately 0.3% and 0.9%, respectively.
Retail sector earnings disappointed with shares of companies like Lowe's (LOW), Best Buy (BBY), American Eagle Outfitters (OAS), and Khol's (K.S.S.) fell on Tuesday as a decline in consumer spending clouded forecasts and hit sales.
Looking forward, eyes will be on Nvidia quarterly report for an update on the fundamentals behind the AI โโhype cycle, after the company's stock hit a record close on Monday. Expectations are high as a chip giant. has become the face of AI history in 2023after its latest earnings sparked a rally in stocks.
Meanwhile, the Open AI Drama remains the center of attention after Microsoft (MSFT) CEO He hinted that it was open. until Sam Altman rejoins the creator of ChatGPT.
Microsoft shares were stable in early trading on Tuesday, after ending Monday's session at a record level following the hiring of abruptly overthrown CEO of OpenAI. financial world saw the tech giant's move boost its AI prospects, which could be boosted if it ends up benefiting from a threatened employee exodus from OpenAI.
Investors are also watching the minutes of the Fed's latest rate-setting meeting, amid a debate over whether rate-cut optimism that has fueled the rally in stocks is overblown. In a week shortened by the holidays and in light of economic data, the comments will be closely analyzed for clues about the thinking of policymakers.
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TOOpenAI Saga: Could Sam Altman Return?
The OpenAI drama continued on Tuesday when investors in maker ChatGDPT said they wanted to lure the ousted Sam Altman back to the company.
According BloombergThrive Capital, Khsola Ventures and Tiger Global Management look to protect their investments after more than two-thirds of OpenAI employees reportedly threatened to resign over Altman's overthrow.
Microsoft (MSFT) CEO Satya Nadella He hinted that it was open. to the idea, even though the company hired Altman to run an internal AI division. Still, according to the report, certain stipulations would have to be met, including the resignation of the startup's current board of directors, along with a change in OpenAI's governance.
"Regardless of where Sam is, he's working with Microsoft," Nadella said in an interview Monday.
As Yahoo Finance's Julie Hyman As he noted, this story has huge implications for investors, particularly those who own Microsoft stock. Microsoft shares closed at a record high on Monday as Wall Street applauded the decision to fully bring Altman into the company. At this point, however, it is to be determined whether he stays.
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Retail results disappoint... just before Black Friday
It wasn't a great earnings season for some retailers, as a pullback in consumer spending overshadowed forecasts and took a hit on sales. Here's a summary of what you should know:
Lowe's (LOW): Shares of the home improvement giant fell about 3% after the company cut its full-year outlook amid a drop in consumer spending. Third-quarter sales fell 13%, while comparable sales fell 7.4%. Lowe's CEO Marvin Ellison blamed the performance on DIY customers, who spent less than expected on big-ticket items. "DIY pressure disproportionately affected our performance in the third quarter," he said. Competitor actions House deposit (HD) It also appeared in the news.
Best Buy (BBY): Shares of the electronics retailer fell about 4% in early trading after the company posted mixed earnings results with net sales that missed expectations. Best Buy CEO Corrie Barry said in the statement that "consumer demand has been even more uneven and difficult to predict." Yahoo Finance's Brooke DiPalma has you covered with the full breakdown here.
American Eagle Outfitters (OAS): Although beating third quarter earnings estimates, shares of the young adult retailer plummeted nearly 20% on Tuesday after its fourth-quarter operating income forecast disappointed investors. The company said it expects fourth-quarter operating income to be between $105 million and $115 million. Analysts expected $114 million. Competitor Abercrombie & Fitch (ANF) It also saw shares fall, despite beating earnings estimates and improving its 2024 outlook, as investors demand more of the company's recovery plan.
Kohl's (K.S.S.): Department store shares fell more than 10% after reporting declining sales, despite the improvement in profits. Net sales decreased 5.2% while comparable sales fell 5.5%. The company cut its full-year sales forecast by 2.8% to 4%, but raised its full-year EPS forecast.
Dick's Sporting Goods (DKS): Contrary to other retailers, shares rose about 10% after the company reported higher third-quarter earnings and raised its full-year outlook amid strong demand for sports equipment. The strong results come after the company battled retail theft and reduced profits in 2023.
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Stocks fall at open
Stocks fell on Tuesday with the tech-heavy Nasdaq Composite (^IXIC) led the morning declines, falling around 0.6% shortly after the opening bell, while the benchmark S&P 500 index (^GSPC) fell about 0.3%. The moves come after both indexes closed at their highest levels since August.
The Dow Jones Industrial Average (^DJI), meanwhile, fell more than 0.1% as the 10-year Treasury yield fell about 1 basis point to trade near 4.41%.
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kStock futures fall to signal a pause in the rally
Stocks on Wall Street were set to open lower on Tuesday after closing with gains, with earnings from artificial intelligence chip maker Nvidia and the Federal Reserve to follow.
Futures on the Dow Jones Industrial Average (^DJI) fell 0.14%, or 49 points, while the S&P 500 (^GSPC) futures lost 0.15%. Contracts on the high-tech Nasdaq 100 (^NDX) fell 0.18%.
