Stock market today: Stocks tread water with Dow aiming for 40,000
05/17/2024 22:52
Stocks trod water as investors assess the chances of the Dow succeeding in another bid to cross 40,000 for the first time.
US stocks were little changed Friday with Wall Street pausing on the run towards bullish milestones as investors dithered over the odds for rate cuts.
The Dow Jones Industrial Average (^DJI) held steady on the heels of touching the key 40,000 level for the first time during Thursday's trading. The S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) slipped just under the flatline, but all the gauges were on track for weekly wins.
The run-up in stocks hit a bump in the wake of comments from Fed officials warning that rates are likely to stay at historic highs for a while. That dampened enthusiasm for the likelihood of a September cut that had been lifted by encouraging inflation data.
Read more: How does the labor market affect inflation?
Friday's light economic and corporate calendar leaves few jumping-off points for the Dow to make another go at crossing its key juncture, while the S&P 500 and Nasdaq have their own fresh records within reach.
That puts the spotlight on appearances by the Fed's Mary Daly and Christopher Waller on Friday. The market will listen for any deviation from their colleagues' message that the Fed will follow the data and wait for clear signs of cooling inflation before making a move.
In individual movers, Reddit (RDDT) shares jumped 13%, not far off its highest close of $65.11 hit in March. The social media platform has signed a partnership with OpenAI that will see ChatGPT integrate content from its forums.
Meanwhile, GameStop (GME) shares sank over 25% after the games retailer said it expects first quarter sales to drop as shoppers shift to online outlets. Shares in the meme stock soared at the start of the week in an echo of the 2021 frenzy, but the rally has turned into a slide in recent days.
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GameStop stock plunges on move to issue shares
The 2024 mini meme stock rally is losing steam
GameStop stock (GME) sank as much as 30% on Friday after the company filed to sell 45 million new shares of common stock and released preliminary financial results that showed sales fell sharply from the same period last year, Yahoo Finance's Josh Schafer reports.
The video game retailer said it expects sales to be in the range of $872 million-$892 million in its fiscal first quarter, down from $1.24 billion in the same period a year prior. Wall Street had expected revenue of just over $1 billion for the quarter, according to data from Bloomberg.
With Friday's decline, the stock is now below where it opened Monday morning after the reemergence of Keith Gill, also known as "Roaring Kitty," on X, formerly Twitter, over the weekend.Gill's bull case for GameStop ignited the meme stock rally back in 2021, and the stock more than doubled by Tuesday morning.
"I'm not seeing anything in the preannouncement that tells me that the business is turning around," Wedbush managing director Michael Pachter told Yahoo Finance. "But at least they'll raise enough cash to last them another three or four years if they, in fact, continue to fail and try to find a new strategy."
Reddit's stock surges after deal with OpenAI
By signing a major partnership with OpenAI, the AI company behind ChatGPT, Reddit (RDDT) scored a major victory in its plans to sell its unique archive of posts to companies eager for troves of content to train their Large Language Models (LLMs).
On Friday, shares of the forum based social media company rose more than 14%, as investors cheered on the deal. The partnership will bring Reddit content into ChatGPT and OpenAI's new products, drawing from Reddit's data to give the chatbot real-time content on recent topics.
In turn, Reddit will receive AI-powered features for redditors and moderators, the company said in an announcement Thursday. OpenAI will also become an advertising partner on Reddit, boosting the company's main source of revenue.
“Reddit has become one of the internet’s largest open archives of authentic, relevant, and always up to date human conversations about anything and everything. Including it in ChatGPT upholds our belief in a connected internet, helps people find more of what they’re looking for, and helps new audiences find community on Reddit," said Steve Huffman, Reddit co-founder and CEO.
Reddit's deal comes as other major media companies are striking deals with AI developers, trading their digitized bodies of language for guaranteed revenue.
Stocks trending in morning trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday.
GameStop (GME): Shares of the video game retailer sank more than 25% on Friday morning after the company filed to sell 45 million new shares of common stock and released preliminary financial results that revealed sales fell sharply from the year prior in its most recent quarter.
Reddit (RDDT): The forum-based social network gained more than 14% during morning trading following news of a partnership with OpenAI, the artificial intelligence company behind the popular ChatGPT. As part of the deal, OpenAI will become an advertising partner for Reddit and will give Reddit the ability to use OpenAI's technology to build tools and features. In turn, ChatGPT will integrate Reddit's content into its system.
Robinhood (HOOD): The financial services company popular with retail stock traders rose 6% Friday morning following a double upgrade from Bank of America, from Underperform to Buy. Analysts pointed to rebounding retail engagement and a broader trend toward mobile trading that the young company stands to benefit from.
Cracker Barrel (CBRL): Shares of the restaurant chain fell by nearly 15% after the company cut its dividend plans by nearly 80%. The announcement comes as the Southern-themed eatery and gift store switches its focus to upgrading its brand and physical locations.
Stocks little changed as Dow reaches for 40,000
The major indexes didn't move much at the open Friday as Wall Street was poised for the Dow to make another attempt at surpassing a key milestone of 40,000.
The Dow Jones Industrial Average (^DJI) held steady on the heels of touching the level for the first time during Thursday's trading. The S&P 500 (^GSPC) rose 0.1% while the tech-heavy Nasdaq Composite (^IXIC) also gained 0.1%, with all the gauges on track for positive ends to the week.
Reddit stock pops premarket on OpenAI deal
Reddit stock (RDDT) is up 14% premarket on a new deal with OpenAI whereby OpenAI will gain access to Reddit's data to help build out its models.
This deal shouldn't come as a surprise to Reddit investors — the company recently struck a similar deal with Alphabet (GOOGL). Reddit co-founder and CEO Steve Huffman told me last week that more deals like this are likely as part of the platform's reinvention.
Look for a new user interface later this year.
Watch below.