Stocks bounced off the day's lows in the final minutes of Tuesday's session but the Dow Jones Industrial Average, S&P 500 and Nasdaq still posted large losses on alarming January inflation data. Two companies that fell hard on the stock market today were Shopify and Arista Networks, both of which sank after their earnings reports.
The Labor Department's consumer price index showed a 0.3% rise in prices vs. the 0.2% expected increase. The year-over-year CPI rose to 3.1% vs. the 3% projected. The January core CPI, which strips out food and energy, increased 0.4% vs. the 0.3% forecast. On an annual basis, prices rose 3.9%, vs. a 3.7% estimate.
That prompted the 10-year Treasury yield to jump 14 basis points to nearly 4.31%, the highest since Dec. 1. The odds of a March rate cut fell to a low 8.5% and nearly 31% for the May meeting after the report was released, according to the Cboe FedWatch Tool.
Stocks felt the impact also. The Dow bounced a bit off the day's lows and closed down nearly 525 points, or 1.4%, on Tuesday. The index was down more than 700 points before trimming losses. The S&P 500 pulled back 1.4% in the stock market today, sending the benchmark index back below the 5,000 level.
The Nasdaq sank 1.8% — its worst day since Oct. 25. And the small-cap Russell 2000 got hit the hardest, falling 4% after rising nearly 1.8% Monday. The index closed below the 2,000 level.
The Invesco QQQ Trust exchange traded fund traded 1.6% lower, while the Innovator IBD 50 ETF ceded 2%.
Volume rose on the New York Stock Exchange and the Nasdaq from Monday, according to preliminary numbers.
Stock Market Today: Affirm Tumbles
IBD 50 name Affirm Holdings retreated nearly 12% in below-average volume and sank below its 50-day moving average, flashing a likely sell signal. Shares are still in a cuplike base and have been volatile in the last few days. Affirm reported a smaller-than-expected December-ended quarterly loss and higher sales Thursday.
ZoomInfo Technologies rallied 14.4% in heavy volume after the sales and marketing platform provider topped its fourth-quarter earnings and sales estimates. The stock is forming a base with a 19.39 entry.
TransUnion broke out past a 71.55 handle buy point after the credit reporting agency beat fourth-quarter profit and revenue forecasts. It also gave a full-year earnings outlook that exceeded some analysts' views. Shares are in a 5% buy zone reaching to 75.12. Its Relative Strength Rating improved on the big move.
Ecolab gapped up 9% in heavy volume after the company beat fourth-quarter earnings and sales estimates and issued a full-year 2024 earnings forecast above views. The stock reached a 52-week high and was the biggest gainer on the S&P 500 Tuesday. Ecolab provides food processing, water treatment, cleaning and pest control services.
Medpace Holdings soared 12.3% following the company's mixed fourth-quarter earnings report, which included a 2024 earnings outlook above analysts' forecasts. Medpace stock reached an all-time high on Tuesday in heavy volume.
Howmet Aerospace popped 5.4% after the maker of aerospace products beat fourth-quarter profit and revenue views and gave a first-quarter sales forecast above expectations.
Marriott International skidded 5.6% in heavy trading, after the hotel operator beat fourth-quarter adjusted earnings views but missed sales expectations. Management also gave a full-year earnings outlook below projections. Marriott stock undercut its 21-day exponential moving average but remained above its 50-day line.
Market Rally Tested; Lyft Soars Late
Earnings Movers: Shopify Stock Tanks, Lattice Rebounds
Shopify gapped down 13.4% in huge volume despite the company's better-than-expected fourth-quarter earnings and revenue. The online commerce platform operator gave a full-year 2024 sales growth outlook that beat analyst projections, but the stock sank anyway. Shopify tested its 50-day line on the stock market today.
Arista Networks gapped down 5.5% in the face of better-than-expected earnings for the fourth quarter and a first-quarter revenue forecast that was slightly higher than estimates at the midpoint. The cloud networking software and hardware maker's customers include Magnificent Seven names Microsoft, Meta Platforms and Google parent Alphabet. Arista stock tested its 21-day line. The IBD 50 stock is extended and hit an all-time high Monday.
Cadence Design Systems fell 4% in heavy trading. The company beat fourth-quarter profit and sales estimates. But it gave current-quarter earnings and revenue projections below views. The design software stock topped the buy zone of a flat base with a 279.32 buy point.
Lattice Semiconductor reversed from early morning losses and jumped 1.8% after the maker of low-power chips reported a beat on its fourth-quarter earnings and a miss on sales estimates. Quarterly profit fell 8% from last year's quarter, while sales dipped 3%. Analysts project a 62% decline in full-year 2024 earnings per share but a 135% increase in 2025.
Stock Action: Arm Stock Gives Some Back
Arm Holdings gave back 19.5% after back-to-back price jumps, including Monday's 29.3% pop.
Datadog trimmed earlier losses and sank 2.4%. The stock bounced off its 50-day line. Fourth-quarter earnings and revenue topped estimates, but the software maker's 2024 earnings guidance missed expectations. The IBD 50 stock is extended from a 120.26 buy point.
Microsoft stock fell nearly 2.2% and tested its 21-day line in the stock market today. Nvidia dipped 0.2% after reaching an all-time high on Monday.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
