Street Calls of the Week
Investing.com-- The S&P 500 closed at a record high Thursday, a day after the Federal Reserve cut rates as Intel led a surge in a chip stocks following news of a hefty investment by Nvidia
At 4:00 ET (20:00 GMT), the Dow Jones Industrial Average gained 123 points, or 0.3%, while the S&P 500 index climbed 0.5% to a closing record high of 6,631.17. The NASDAQ Composite rose 0.9%.
Intel soars on Nvidia investment
Intel (NASDAQ:INTC) shares soared after Nvidia (NASDAQ:NVDA) announced a $5 billion investment in the chipmaker, as part of a broader collaboration between the two semiconductor giants to develop multiple generations of custom data center and PC products.
The partnership will focus on connecting Nvidia and Intel architectures using Nvidia NVLink technology, combining Nvidia’s AI and accelerated computing capabilities with Intel’s CPU technologies and x86 ecosystem.
This agreement comes a few weeks after the White House engineered a deal for the U.S. government to take a massive stake in the company. Nvidia’s support represents a new opening for Intel after years of turnaround efforts at the famed U.S. manufacturer failed to pay off.
Further Fed cuts ahead?
The Fed lowered its benchmark federal funds rate by 25 basis points on Wednesday to a target range of 4.00% to 4.25%, delivering its first rate reduction since December.
Updated projections released after the meeting showed a majority of policymakers expect two more cuts in 2025, underscoring the central bank’s shift toward supporting a cooling labor market while still keeping an eye on persistent inflation.
Powell, speaking at his post-decision press conference, described the move as a “risk-management” step, saying officials wanted to guard against the possibility of a sharper rise in unemployment.
“The market is not convinced by these softest of soft-landing projections and thinks the Federal Reserve will probably need to do more with an additional 2–3 cuts now priced over and above the Fed forecasts,” ING analysts said in a note.
The decision was not unanimous. Newly appointed Governor Stephen Miran cast the lone dissent, arguing for a deeper 50 basis point cut.
The dissent highlighted growing debate inside the central bank over how forcefully to respond to shifting economic conditions.
Data released earlier Thursday showed that the number of Americans filing new applications for unemployment benefits fell last week, but the labor market has softened as both demand for and supply of workers have diminished.
Initial claims for state unemployment benefits decreased 33,000 to a seasonally adjusted 231,000 for the week ended September 13, the Labor Department said on Thursday. The decline partially reversed a surge in the prior week, which had pushed claims to levels last seen in October 2021.
Layoffs remain relatively low, but the hiring side of the labor market has almost stalled. Demand for workers has slowed, with economists blaming uncertainty stemming from tariffs on imports.
Elsewhere, the Bank of England decided to keep interest rates on hold at 4% after last month’s cut, its fifth reduction since August 2024.
The Bank of Japan -- due to meet on Friday -- is also projected to leave interest rates unchanged amid heightened political uncertainty.
Novo Nordisk gains on obesity pill trial results
In the corporate world, Novo Nordisk (NYSE:NVO) stock soared after the drugmaker said late-stage trial results for its once-daily obesity pill showed “significant” weight reduction and tolerability in line with its blockbuster Wegovy injection.
Darden Restaurants (NYSE:DRI) stock fell after the Olive Garden parent reported fiscal first quarter earnings and revenue that missed expectations, while maintaining guidance that barely meets consensus forecasts.
American Express (NYSE:AXP) stock rose after the credit card giant unveiled long-awaited upgrades to its U.S. Platinum cards, adding new perks worth over $3,500 annually while raising the annual fee by $200.
Dupont De Nemours (NYSE:DD) stock slipped after the chemicals company cut its third-quarter adjusted profit forecast to reflect the impact of reclassifying its heat resistant fiber brand, Aramids, as discontinued operations.
Cracker Barrel Old Country Store (NASDAQ:CBRL) stock fell after the restaurant chain’s fourth-quarter earnings missed expectations, while its full-year guidance also disappointed.
CrowdStrike Holdings Inc (NASDAQ:CRWD) reported sanguine guidance and updates at its investor day on Wednesday, announcing a partnership with Salesforce as well as the acquisition of Pangea, sending the stock up 12%.
Peter Nurse, Ayushman Ojha contributed to his article