Stock market today: Stocks tumble as record-setting rally cools

US stocks pulled back on Friday, signaling a retreat from all-time highs as European turmoil rattled nerves and Elon Musk’s pay package win thrust Tesla (TSLA) center stage.

The Dow Jones Industrial Average (^DJI) sank about 0.5% to lead the declines, while the S&P 500 (^GSPC) shed 0.4%. The tech-heavy Nasdaq Composite (^IXIC) dropped 0.3%.

Stocks are losing steam after the benchmark S&P 500 and the Nasdaq nailed record closes for the fourth day in a row, boosted by strength in techs. Both indexes are still on track for weekly gains.

A surprise cooling in wholesale price pressures gave heart to investors betting on two interest-rate cuts this year, since the decline is likely to be reflected in the coming PCE inflation reading watched by the Federal Reserve.

Read more: How does the labor market affect inflation?

But the Fed this week dialed down its projected rate cuts from three to one in 2024, keeping the market guessing and leaving stocks vulnerable to shifts in mood. Strength in technology names has driven broader gains, setting up the S&P 500 and the Nasdaq for weekly wins — for now, at least. But the Dow faces a loss for the week, as questions persist about the breadth of this year’s rally.

Meanwhile, Tesla shares were up around 2% in Friday morning after shareholders re-approved CEO Elon Musk’s $56 billion pay package. Despite opposition from some large investors, 77% of votes were cast in favor, the EV maker said.

Weighing down spirits was a slump in European stocks (^STOXX), which were headed for their worst week since October. Investors are concerned about the fallout for markets if the far right makes political gains or even wins France’s snap election.

In individual movers, Adobe (ADBE) shares jumped 15% after an upbeat AI sales projection from the Photoshop maker.

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Fri, June 14, 2024 at 4:20 PM GMT+2

Stocks trending in morning trading

Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday.

Adobe (ADBE): Shares of the software company surged 15% after reporting fiscal second-quarter earnings that beat expectations and boosted guidance for the year. A rosier outlook for sales of its creative products suggest increasing adoption of the company’s new AI tools.

GameStop (GME): The meme stock rose almost 3% Friday morning, riding the momentum from the earlier session and after Keith Gill, the folk hero retail trader, shared a screenshot of an account that showed a massive increase in his GameStop position. The image appeared to show more than 9 million GameStop shares, up from Monday’s 5 million shares from a similar screenshot that the account posted on Reddit.

Shopify (SHOP): Shares of the e-commerce company gained 3% following an analyst upgrade that implied a 16% increase in the stock price. Evercore’s ISI analyst Mark Mahaney upgraded Shopify from In-Line to Outperform, after the stock’s pullback created an entry-point for investors.

Zscaler (ZS): The cloud security company increased nearly 2% following an upgrade from JPMorgan. Analysts said Zscaler is a “next generation” security company that is poised for growth, which is currently trading at a discount. JPMorgan upgraded the stock from Neutral to Overweight.
Fri, June 14, 2024 at 4:09 PM GMT+2

RH stock plunges after retailer posts wider than expected loss

RH (RH) stock sank more than 17% Friday morning after the luxury home goods retailer reported a wider than expected loss the previous day and said it expected business conditions to remain challenging until interest rates ease and the housing market rebounds.

RH posted a loss of $0.40, wider than analyst estimates for a loss of $0.09 share.

“I don’t think there’s going to be a sustained inflection in luxury home sales at these interest rates,” RH chairman and CEO Gary Friedman told investors and analysts on the company’s earnings call on Thursday, noting that mortgage rates may not meaningfully move downward until next year.

“Home prices went up 42% in the two years of COVID, and then they’ve continued to compound the last two years…And now you’ve got interest rates 7% or higher when they were 2.6% to 3.3%. I mean it’s just simple affordability now,” the executive added.

The comments come after the Federal Reserve this week held interest rates steady and signaled it expects just one interest rate cut this year, down from three previously. The Fed doesn’t directly set mortgage rates, but its policy moves impact them.

The average weekly rate on the 30-year fixed mortgage rate slightly declined to 6.95% from 6.99% the prior week, per Freddie Mac data.
Fri, June 14, 2024 at 3:34 PM GMT+2

Stocks tick lower as European markets recoil

US stocks puled back from all-time highs as investors reacted to jitters in Europe, where the coming snap election in France could bring advancements for the nation’s far-right party.

The Dow Jones Industrial Average (^DJI) sank about 0.5% to, while the S&P 500 (^GSPC) shed 0.3%. The tech-heavy Nasdaq Composite (^IXIC) dropped 0.2%.