News Digest / Latest Stock Market News / Friday Market Shifts: Tech Stocks Dip, Inflation Eases, Citigroup Reports Strong Q2

Friday Market Shifts: Tech Stocks Dip, Inflation Eases, Citigroup Reports Strong Q2

Alex Vellor

08:31am, Friday, Jul 12, 2024

Photo by Eduardo Soares on Unsplash.com

On Thursday, the S&P 500 and Nasdaq Composite saw significant declines, marking an unusual day in the stock market. The S&P 500 dropped by 0.88%, pulling back from its recent record high. The Nasdaq Composite experienced a more substantial decline, falling 1.95%. In contrast, the Dow Jones Industrial Average remained relatively stable, decreasing by only 32.39 points, or 0.08%.

The so-called "Magnificent Seven" stocks all declined on Thursday. Nvidia (NASDAQ: NVDA) saw a drop of more than 5%, while Apple (NASDAQ: AAPL) shares decreased by over 2%. This downturn in major tech stocks significantly influenced the broader market's performance.

Interestingly, while large-cap stocks struggled, smaller stocks had a positive day. The small-cap Russell 2000 index, which has faced challenges throughout the year, surged by more than 3%. This unusual market behavior highlights the ongoing volatility and the shifting dynamics between different stock categories.

Inflation Shows Signs of Easing

In a positive economic development, the monthly inflation rate fell in June for the first time in over four years.

According to data released on Thursday, the consumer price index (CPI), which tracks costs for goods and services, decreased by 0.1% from May. This change brought the 12-month inflation rate down to 3%, its lowest level in more than three years. The last time the monthly rate decreased was in May 2020.

This new data could pave the way for the Federal Reserve to consider lowering interest rates later this year. Investors will be closely watching additional inflation data, with the producer price index results set to be released on Friday morning. These figures will be crucial in shaping expectations for future monetary policy decisions.

Premarket Movers:

Company	Stock Ticker	Performance	Details
Wells Fargo	NYSE:WFC	Shares tumbled 6%	Reported $11.92 billion in net interest income for the second quarter, a 9% year-over-year decline. Analysts expected $12.12 billion. Full-year forecast reiterated: 7% to 9% decrease in net interest income.
JPMorgan Chase	NYSE:JPM	The bank slipped 1.6%	Reported revenue of $50.99 billion for the second quarter, versus the $49.87 billion expected. Earnings were $4.40 per share, compared to the consensus estimate of $4.19 per share. Shares up nearly 22% this year.
Tesla	NASDAQ:TSLA	Shares dropped 1.2%	Added to the 8.4% decline in the previous session. UBS downgraded the stock to sell from neutral. Tesla's robotaxi event pushed back to October from August.
AT&T	NYSE:T	The telecom stock fell more than 2%	Disclosed that customer data was illegally downloaded from a third-party platform. Data includes records of calls and texts for nearly all customers over a six-month period in 2022.
Carvana	NYSE:CVNA	Shares added 1.3%	BTIG initiated coverage of the stock at a buy rating. Believes Carvana is uniquely positioned against its industry peers and investors should not overlook the opportunity.
Fastenal	NASDAQ:FAST	The industrial stock gained 2.2%	Posted second-quarter revenue of $1.92 billion, topping the FactSet consensus estimate of $1.91 billion. Per-share earnings of 51 cents came in line with expectations.

Citigroup Reports Strong Earnings

On Friday, Citigroup (NYSE: C) reported second-quarter results that surpassed expectations for both profit and revenue.

The bank earned $1.52 per share, exceeding the $1.39 per share estimate from LSEG. Revenue also came in higher than expected at $20.13 billion, compared to the $20.07 billion estimate.

Despite these positive financial results, Citigroup faces ongoing scrutiny from regulators. This week, the bank was criticized for not adequately addressing its regulatory shortcomings. Analysts are keen to hear from CEO Jane Fraser about her efforts to address these issues, which she has been working on for some time.

Last year, Fraser announced plans to simplify Citigroup's management structure and cut costs. However, these earnings will take a backseat if the bank cannot resolve its regulatory concerns, particularly related to data and risk management. This remains a critical area for Citigroup to address to ensure long-term stability and growth.

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