Stocks end higher Thursday, boosted by solid gains for some megacap tech stocks, as investors navigated fourth-quarter earnings season while focusing on the impact of DeepSeek's emergence on the broader AI-investment story.
The Dow Jones Industrial Average gained 168.61 points, or 0.38%, to finish the session at 44,882.13, while the S&P 500 advanced 0.53% to 6,071.17, and the tech-heavy Nasdaq rose 0.25% to end the day at 19,681.75.
Apple said first quarter revenue climbed 4% in its first quarter, but the computer giant missed Wall Street’s iPhone sales expectations with sales in China falling 11.1%
The company earned $2.40 per share, beating the consensus forecast of $2.35.
Updated at 12:13 PM EST
No deal
Hewlett Packard Enterprise HPE shares moved lower following a surprise move by the Department of Justice to attempt to block its proposed $14 billion takeover of Juniper Networks JNPR.
The DoJ said the deal, unveiled last year, would create a duopoly in the market for wireless equipment such as routers and switchers.
"The proposed merger is presumptively unlawful. It would significantly increase concentration in an already consolidated relevant market for enterprise-grade WLAN solutions," the DoJ said in its complaint to a in federal court in California. "The proposed acquisition would result in two firms controlling over 70%of the relevant market."
HPE shares were last marked 2.3% lower at $21.16 each while Juniper fell 3.3% to $33.97 per share, well south of the $40 price HPE proposed to pay for the Sunnyvale, Calif.-based group.
Specifically, the issue is HPE Aruba / Juniper Mist
— Julian Klymochko (@JulianKlymochko) January 30, 2025
HPE acquired Aruba for $2.7 billion in 2015
Juniper acquired Mist for $405 million in 2019$HPE / $JNPR deal is $14.3 billion pic.twitter.com/zDisW299GV
Updated at 11:57 AM EST
Meta records
Meta Platforms shares hit a fresh all-time peak in early trading, and were last marked 2.34% higher at $692.62 each, following a bullish outlook for its AI investment from CEO Mark Zuckerberg.
"Similar to last quarter, the integration of AI-enabled features and products within their Family of Apps is helping drive more activity on their platforms with greater ad engagement," said Gil Luria, head of technology research at D.A. Davidson.
"Whether it's Reels, Threads, What's App, Facebook, etc., Meta expects to continue gaining share in key markets and become leaders in their respective categories.
$META: The journey from introducing the like button to making more than $165 Billion of revenue in a year pic.twitter.com/6uzgxn5gER
— Evan (@StockMKTNewz) January 30, 2025
Updated at 9:51 AM EST
Solid start
The S&P 500 was marked 24 points, or 0.341%, higher in the opening minutes of trading, with the Nasdaq rising 110 points, or 0.56%
The Dow moved 75 points higher while the midcap Russell 2000 gained 28 points, or 1.21% following the Commerce Department's update on fourth quarter GDP.
Benchmark 10-year Treasury yields were changing hand at 4.518% while 2-year notes traded at 4.209%.
Today’s GDP report confirms that the U.S. economic expansion continued apace into the end of 2024 on relatively firm footing," said Mike Reynolds, vice president of investment strategy at Glenmede."As goes the consumer, so goes the broader economy in the U.S., and household spending put in an exceptionally strong showing in Q4."
"Personal consumption expenditures grew at their fastest clip since Q1 2023, driven by spending on durables such as recreational goods and vehicles," he added. "When households are increasingly willing to empty their wallets for non-discretionary items in recreational categories, it’s usually a vote of confidence in the health of the economic expansion."
S&P 500 Opening Bell Heatmap (Jan 30, 2025)$SPY +0.38% 🟩$QQQ +0.50% 🟩$DJI -0.04% 🟥$IWM +1.06% 🟩 pic.twitter.com/nHhl0pq43D
— Wall St Engine (@wallstengine) January 30, 2025
Updated at 8:37 AM EST
Working the data
The U.S. economy grew at a 2.3% pace over the final three months of last year, the Commerce Department reported, a modestly weaker-than-expected reading for its first update of fourth-quarter GDP.
Consumption powered most of the gains, with the best reading since first-quarter 2023 and with overall price pressures coming in just below Wall Street forecasts,
Weekly jobless claims, meanwhile, fell by 16,000 over the period ended Jan. 25 to a lower-than-expected reading of 207,000.
Treasury bond yields were little changed following the data releases, with benchmark 10-year notes trading at 4.502% and 2-year paper changing hands at 4.207%.
Stocks were also holding earlier gains, with the S&P 500 called 13 higher and the Nasdaq expected to rise 107 points.
Just Released: US 4Q24 GDP growth slightly underperformed at 2.3%, falling short of the consensus forecast of 2.6%. Here's a detailed contribution breakdown from ECAN:
— Michael McDonough (@M_McDonough) January 30, 2025
Gross Domestic Product (GDP): 2.300
Personal Consumption Expenditures: 2.820
Change in Private Inventories:… pic.twitter.com/QPlXfPVrgN
Updated at 8:20 AM EST
ECB rate decision
The European Central Bank lowered its benchmark deposit rate by a quarter point following its two-day policy meeting in Frankfurt, taking it to 2.75% and forecast further reductions over the coming months.
The expected move followed a series of grim fourth-quarter GDP updates from the eurozone's biggest economy, including a further contraction in Germany and stagnation in Italy.
"The Governing Council is determined to ensure that inflation stabilises sustainably at its 2% medium-term target. It will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance," the ECB said in a statement.
"In particular, the Governing Council’s interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission," the ECB added.
The euro was little changed at 1.0403 against the U.S. dollar following the ECB statement, while the regional Stoxx 600 benchmark was last trading just off its all-time peak at 537.18 points.
We cut our key interest rates by 0.25 percentage points.
— European Central Bank (@ecb) January 30, 2025
We are doing this because inflation is developing broadly as we expected and is on track to settle at around our 2% target.
Read today’s monetary policy decisions https://t.co/MFqHWvcuZT pic.twitter.com/5zTQVWK2V0
Updated at 7:12 AM EST
UPS delivers bad news
United Parcel Service (UPS) shares tumbled in early Thursday trading after the world's biggest package delivery group's weaker-than-expected full-year profit forecast clouded its solid fourth quarter earnings.
UPS said it would lower volume transports with its biggest customer, believed to be Amazon (AMZN) , by more than 50% by the second half of next year, a move that will eat into group revenue, which is forecast at around $89 billion, $6 billion south of Wall Street forecasts.
UPS shares were marked 11.8% lower in premarket trading to indicate an opening bell price of $117.94 each.
Stock Market Today
Stocks ended lower across the board on Wednesday, with the S&P 500 falling 0.47%, following a relatively hawkish interest rate decision from the Federal Reserve and another outsized decline for AI-chip maker Nvidia (NVDA) .
The Fed, as expected, held its benchmark lending rate steady at between 4.25% and 4.5%, but removed language about making progress on inflation from its formal statement, a move the market interpreted the omission as indicating a "higher for longer' rate-policy stance heading into the first half.
“With policy being well calibrated, the Fed is in ‘no hurry’ to make further [Federal Funds Rate] adjustments," EY's chief economist, Gregory Daco, said. "This indicates a relatively high bar for rate cuts, even if it would be misguided to assume policy recalibration is over.”
“We expect the Federal Reserve will adopt an extremely reactive approach going forward, with policymakers heavily reliant on inflation and employment data to inform their decisions, potentially over-extrapolating short-term trends,” he added.
Focus in Thursday's session, however, is likely to shift to the performance of three key stocks, Microsoft (MSFT) , Meta Platform (META) and Tesla (TSLA) , as well as the December quarter update from Apple (AAPL) expected after the close of trading.
“The latest earnings reports from Microsoft, Tesla, and Meta highlight a tech sector in flux - balancing AI-driven growth, competitive pressures, and shifting investor sentiment," said Jacob Falkencrone, chief investment strategist for Europe at Saxo Bank.
"While AI remains the unifying theme across all three companies, each is facing distinct challenges," he added. "Microsoft is struggling to scale its cloud business, Tesla is grappling with slowing vehicle demand, and Meta is pouring billions into AI despite regulatory and cost concerns.”
Microsoft shares slipped 4% in premarket trading after the tech giant topped Wall Street forecasts for its fiscal-second-quarter earnings, but posted disappointing growth for its Azure cloud division, the focus of its AI push, and indicated a similar performance over the three months ending in March.
On the flip side, Tesla shares rose 1.9% despite missing Wall Street forecasts for profits and sales in its fourth quarter update but forecasting a return to growth for its legacy automaking business and the launch of a low-cost model in the first half of the year.
Related: Meta earnings includes surprising 2025 outlook
Facebook parent Meta, which declined to provide a full-year revenue outlook, was otherwise bullish on the impact AI will have on its social media business, sending its shares 2% higher in premarket trading.
Collectively, the moves are helping stocks into a solid opening bell ahead of the Commerce Department's first look at fourth quarter GDP and the Labor Department's weekly update on jobless claims at 8:30 am Eastern time.
Futures contracts tied to the S&P 500 suggest a 22 point opening bell advance, with the Nasdaq called 102 points higher. The Dow, meanwhile, is priced for a 192 point gain.
Other stocks on the move include American Airlines (AAL) , which fell 2.7% following last night's tragic crash between a regional passenger jet and a U.S. Army Black Hawk helicopter near Reagan Washington National Airport.
Related: Fed decision cements interest rate case
In overseas markets, Europe's Stoxx 600 hit a fresh all-time peak, and was last marked 0.45% higher in Frankfurt, ahead of a European Central Bank rate decision later in the session.
The ECB is expected to lower its benchmark deposit rate by 25 basis points, to 2.75%, following data showing contraction in the major Eurozone economies of Germany and France and a broader stagnation for the 20 nations that share the single currency.
Overnight in Asia, Lunar New Year holidays continue to keep most markets dark, with the regional MSCI ex-Japan benchmark edging 0.01% lower in thin trading. Japan's Nikkei 225, meanwhile, rose 0.25% in Tokyo.
Related: Veteran fund manager issues dire S&P 500 warning for 2025
