Stock market today Dow 40,000: Live updates

Stocks closed lower, turning their performance around after all three major indexes rose to new intraday highs on Thursday morning.

The Dow Jones Industrial Average lost 38.62 points, or 0.10%, to settle at 39,869.38. The 30-ticker benchmark had earlier crossed over the 40,000 level for the first time in history.

The S&P 500 and Nasdaq Composite, which also notched intraday highs, respectively slid 0.21% and 0.26%. The broader market index closed at 5,297.10, while the tech-heavy Nasdaq closed at 16,698.32.

— Lisa Kailai Han

Backed up by artificial intelligence-related tailwinds, the tech sector has largely led the current market rally. Shares of graphics processer manufacturer Nvidia are up 91% this year alone.

Despite this bull run, Barclays is still constructive on the sector.

“Big Tech fundamentals still look good here and we think there’s room to run over the next couple of quarters, even though the bar for the group to deliver has been set very high. Big Tech revisions have strengthened further post-Q1 earnings, bifurcating even more from the rest of the S&P 500,” strategist Venu Krishna wrote in a note.

Krishna added that the defensible margins that characterize the sector also have scarcity value in an increasingly troubling macroeconomic environment.

— Lisa Kailai Han

Costco Wholesale Corporation rose more than 1% Thursday to an all-time high of $804.50 per share on an intraday basis, marking the first time the membership-only big-box store has topped the $800 threshold.

When the retailer merged with Price Club in 1993, the shares were only trading under $10 apiece. The stock is up more than 20% this year, outperforming the S&P 500’s 11% gain.

The late Charlie Munger, who was on Costco’s board, was an early investor and a big champion of the retailer, calling himself a “total addict” to the company. He was a big fan of Costco’s membership business and rewards program as well as its big, efficient stores and consistently strong management. He believed Costco will eventually become a huge internet player, threatening Amazon in the process.

The company is set to report fiscal third-quarter earnings on May 30. Costco had missed Wall Street’s revenue expectations for its holiday quarter despite reporting year-over-year sales growth and strong e-commerce gains.

— Yun Li

While Big Tech has led the current market rally, Barclays sees much more room ahead for outperformance from other sectors.

“Broadening has been modest and we think there’s room for a lot more. Earnings growth is the most likely catalyst, in our view,” strategist Venu Krishna wrote in a Thursday note.

Krishna noted that investors have already accounted for much optimism in Big Tech’s current earnings estimates, meaning that comps could be challenged going forward.

“We think this creates an opportunity for the rest of the S&P 500 to contribute more meaningfully to YoY earnings growth in 2H24 and into 2025, provided the macro backdrop remains supportive,” the strategist added. “In an encouraging sign, revisions for the rest of the SPX have also improved following the Q1 earnings season.”

— Lisa Kailai Han

Retail investor participation in GameStop hit a three-year high on Monday, according to JPMorgan.

Everyday traders were involved in the video game retailer’s stock at a level of around 30% on Monday after the online return of “Roaring Kitty,” the user credited with helping spur 2021’s epic meme stock squeeze. That is a level not seen since 2021, JPMorgan data shows.

Despite that, the meme stock rallies have fizzled as the week has gone on, making Monday’s moves appear to be more of a fad than a harbinger.

— Alex Harring

On Thursday, 53 stocks in the S&P 500 hit new 52-week highs.

Names that reached this milestone included:

On the other hand, only one stock hit a 52-week low: Solventum.

— Lisa Kailai Han

The S&P 500 could next find support at the 5,575 level, according to Strategas head of technical and macro research Chris Verrone.

“[It’s] not exactly advanced math, but simple breakout technique suggests roughly 5550-5600 as the next S&P target,” Verrone wrote in a Thursday note.

The S&P 500 has gained more than 2% over the past week and nearly 12% in 2024.

— Brian Evans

New research authored by former Fed Chair Ben Bernanke and International Monetary Fund veteran Olivier Blanchard suggests that the United States and other countries may need unemployment to rise for inflation to fall back to normal levels.

The working paper, published by the Peterson Institute for International Economics, comes from a project in which 10 global central banks used a model developed by Bernanke and Blanchard to examine the pandemic-era inflation spike. The research showed that some period of higher unemployment and slower wage growth may be necessary to accomplish the “last mile” of reducing inflation.

“As the effects of relative price shocks and shortages stabilized or reversed, inflation declined, and the role of labor market tightness became increasingly important, suggesting that some slowing of activity might be necessary to get US inflation all the way back to target,” the paper’s abstract said.

The paper does say in its conclusion that “the unemployment costs of the last mile could be limited” in the United States.

— Jesse Pound

Richmond Federal Reserve President Thomas Barkin said Thursday that he was encouraged by the consumer price index report the previous day but sees more work ahead to get back to the central bank’s goal of 2% inflation.

“On the inflation side, it certainly came off the numbers of the prior few months, which was good. It’s still not where we’re trying to get to target,” the central bank official said during a CNBC “Squawk on the Street” interview.

“I do believe we’re on the right path here. I do believe inflation is coming down on the big picture,” he added regarding data showing CPI inflation running at a 3.4% annual rate. “My point is only to get to 2% sustainably in the right kind of way. I just think it’s going to take a little bit more time.”

Harkin is a voting member this year on the rate-setting Federal Open Market Committee.

Check out the companies making headlines in midday trading:

Meta — Shares pulled back 1.3% after the European Union opened a probe into the company regarding child safety concerns on social media platforms Facebook and Instagram.

Deere — Deere shares slipped about 3% after the maker of agricultural equipment cut its full-year guidance. The company said it now expects net income of roughly $7 billion, down from a range of $7 billion to $7.5 billion.

Walmart — Shares rallied nearly 6% after the company reported adjusted first-quarter earnings of 60 cents per share, topping the 52 cents expected from analysts polled by LSEG. Revenue was $161.5 billion, beating the $159.5 billion consensus estimate. Walmart said it made big gains in e-commerce and won over more high-income shoppers.

The full list can be found here.

— Hakyung Kim

The Dow Jones Industrial Average crossing above 40,000 for the first time on Thursday could add fuel to the flames for the current bull rally, according to Independent Advisor Alliance Chief Investment Officer Chris Zaccarelli.

“Breaking the 40,000 barrier is a big psychological boost for the bulls as round numbers hold special significance in people’s hearts and minds,” he said in an email. “We are in a Bull Market and people are showing some irrational exuberance (meme stocks) and dismissing bad news (slowing retail sales) and focusing on good news (slightly slowing inflation).”

Zaccarelli added a warning that the market is now heading into “overvalued territory,” making it even more important for investors to become especially discerning when investing in equities.

— Lisa Kailai Han

Advertising technology stocks popped Thursday, a day after Netflix announced it plans to roll out its own ad platform and partner with Google Display & Video 360, The Trade Desk and Magnite.

The Trade Desk added 5%, while Magnite shares rallied 28% and headed for their best day since November 2022. Alphabet shares were last up 1%.

Wall Street views the partnership as a boon for these ad-tech stocks, with Citi’s Ygal Arounian estimating that it could add $500 million to The Trade Desk’s 2025 gross billings.

Netflix aims to start testing the platform in Canada later this year, and roll out the offering worldwide by the end of next year.

Read more on what the partnership means for this under-the-radar stock here.

— Samantha Subin

All three major stock averages ripped to new intraday highs Thursday morning, with the Dow Jones Industrial Average crossing over 40,000 for the first time in history.

Baird analyst Ross Mayfield attributed the strong earnings season as providing another leg for the market rally to stand on in recent weeks.

“This has all the signs of a cyclical bull market and it’s not running out of steam as far as we can tell,” he told CNBC in an interview.

— Lisa Kailai Han

The 30-stock Dow reached a fresh milestone Thursday morning, surpassing the 40,000 threshold.

At its high of the session, the average touched 40,002.75, climbing about 0.2%.

Walmart shares helped lift the price-weighted index to its fresh high, as the big-box retailer jumped more than 6% following a fiscal first-quarter beat on the top and bottom lines.

The Dow’s new high follows a day after the three major averages closed at fresh records.

— Darla Mercado

Wolfe Research replaced Nvidia with AMD in its Alpha List, saying the decision was a “tactical shift” after Nvidia’s outperformance this year.

“We make a tactical shift in priority to AMD, adding it to the Wolfe Alpha List, replacing NVDA given the relative move in shares YTD,” Chris Caso wrote to clients on Thursday. “We expect more significant catalysts for NVDA later this year, and expect numbers to move higher for both NVDA and AMD.”

The decision comes ahead of Nvidia’s earnings results next week in which the artificial intelligence chipmaker will have a high hurdle to clear after its exorbitant run. Nvidia shares have nearly doubled this year, up roughly 91%. In comparison, AMD shares are up just 8%. Meanwhile, the S&P 500 is up more than 11%.

Walmart, Under Armour and Canada Goose all reported better-than-expected profits. But the retailers’ outlooks ranged from somewhat cautious to downright disappointing.

• Walmart expects second-quarter earnings per share of 62 cents to 65 cents, roughly in line with the consensus estimate of 64 cents, despite just posting its biggest earnings beat in three years.
• Under Armour’s fiscal fourth-quarter earnings beat by 3 cents, but its profit forecast of 18 cents to 21 cents in the new fiscal year is a fraction of the 59 cents the Street has been expecting. The athletic gear firm also sees a shocking low double-digit decline in revenue, while analysts were expecting a 2% rise. The company blames “lower wholesale channel demand and inconsistent execution across our business” for the weak guidance.
• Canada Goose’s fiscal fourth-quarter earnings were three times greater than the Street’s expectations. But its outlook for the new fiscal year was far more tempered as it expects “global consumer spending will continue to be pressured.” The outdoor apparel maker projects mid-teens earnings growth versus Wall Street’s expectation of 20.6% growth, and revenue growth of low single digits versus an estimate of 8.1%. An even bigger problem, though, is the company has withdrawn its long-term financial targets amid the “more challenging consumer spending environment” that has caused its direct-to-consumer and wholesales businesses to “have not performed according to our expectations.”

— Robert Hum