4:12pm: Eyes on Apple
Stocks finished Thursday’s trading session on the front foot, with the S&P 500 leading the gains.
The S&P 500 added 0.5% at 6,071 points, the Dow Jones was up 0.4% at 44,882 points and the Nasdaq was up 0.2% 19,678 points.
Investor attention will turn after the closing bell to Apple’s earnings report.
2:45pm: Apple expected to deliver strong quarter
Apple Inc (NASDAQ:AAPL, ETR:APC) will hand down its latest earnings report after Thursday’s closing bell with Bank of America analysts expecting a strong quarterly performance driven by initial demand for the iPhone 16, which launched back in mid-September.
Wall Street analysts, on average, expect Apple to report earnings per share of $2.36 on revenue of $124 billion, while BofA expects revenue to come in higher at $126 billion.
The bank’s analysts expect iPhone units of 79 million, above the Street consensus of 77 million.
However, they lowered their March quarter iPhone units estimate to 49 million from 56 million, compared to the consensus of 52 million, citing the weak macro and staggered launch of Apple Intelligence features, which they see as yet to gain widespread adoption.
1:25pm: Bullish case for gold
Gold prices rose to new highs amid ongoing trade tensions between the US, Mexico, and Canada, driving investor uncertainty.
Market expectations for two rate cuts this year led to a decline in US Treasury yields, supporting gold, according to Konstantinos Chrysikos, head of customer relationship management at Kudotrade.
And weaker-than-expected GDP growth data could support the gold price, Chrysikos noted.
"Economic growth came in at 2.3% instead of the anticipated 2.6%, reinforcing expectations that the Fed could consider future rate cuts to support the economy although the job market remains resilient," Chrysikos commented.
"Elsewhere, the decisions of the Bank of Canada and the European Central Bank to continue cutting interest rates is contributing to a bullish outlook for gold prices."
12:20pm: Nasdaq turns red
Socks were mixed at midday, with the Dow Jones and S&P 500 showing modest gains, while the Nasdaq experiences a slight decline.
As of midday, the Dow Jones is up 0.3%, the S&P 500 is up 0.2%, and the Nasdaq is down 0.1%.
The market is currently focused on corporate earnings reports, particularly from major tech companies.
Jamie Cox, Managing Partner at Harris Financial Group, commented on the GDP report for Q4, stating that although headline growth appeared weak, the consumer is powering forward strongly.
Excluding inventories, GDP was up 3.1%, far exceeding estimates and highlighting that the U.S. economy is poised to continue outpacing the rest of the world.
11:10am: GDP trend 'solid'
Real GDP slowed in the fourth quarter due to a temporary drag from inventories, but the trend still looks "very solid," according to Comerica's Bill Adams.
Adams noted that the report provides the Fed another reason to hold rates steady in the near-term.
"The real GDP price index rose a moderate 2.2% in the fourth quarter, up from 1.9% in the third quarter," Adams said.
"Energy prices rose in the fourth quarter, contributing to the increase. The Personal Consumption Expenditures Price Index—that’s the index that the Fed uses to measure its 2% inflation target—rose 2.3% in the fourth quarter, also up from 1.5% in the third."
9.58am: Wall Street gains as GDP growth undershoots
Wall Street saw a positive start on Thursday after figures showed gross domestic product growth slowed in the fourth quarter to miss expectations.
The Nasdaq and S&P 500 both climbed by 0.6%, as the Dow Jones ticked up 0.3%.
Figures earlier on had shown the US economy grew by 2.3% over the final three months of last year, against 3.1% previously and below estimates for 2.6%.
“Although GDP growth slowed [...] the growth rate of final sales to private domestic purchasers dropped off only marginally, from 3.4% to 3.2%,” Capital Economics analysts flagged.
“The latter is a better gauge of underlying strength and suggests the economy remains strong, particularly given the fourth-quarter disruptions like the Boeing strike and hurricanes.”
Among companies, International Business Machines surged by 13% as trading got underway on expectation-beating figures overnight, which showed its artificial intelligence business surging.
Microsoft Corp shed 4.7% in the meantime, after detailing underwhelming guidance in its expectation-topping results.
8.46am: GDP growth slows in fourth quarter
The US economy grew at a slower rate over the fourth quarter to miss market estimates, figures showed on Thursday.
According to the Bureau of Economic Analysis, gross domestic product expanded by 2.3% over the final three months of 2024.
This marked a slowdown against the 3.1% seen over the third quarter, while analysts had expected growth of 2.6%.
Futures continued to a mixed start on Wall Street, with both the S&P 500 and Nasdaq seen higher but Dow Jones lower.
7.57am: Mixed start expected
Wall Street appeared set for a mixed start as traders awaited gross domestic product figures for the fourth quarter.
Futures had the Nasdaq and S&P 500 up by 0.4% and 0.2% respectively, while the Dow Jones was seen dipping 0.1%.
Stocks had dropped on Wednesday as the Federal Reserve opted to hold interest rates, with the S&P 500 and Nasdaq both slipping 0.5%.
Thursday’s figures were set to offer the first insight since the decision, which saw a hawkish tone on inflation later dialled back on by chair Jerome Powell.
“Powell indicated policy is well-positioned for dual goals and noted progress towards a 'meaningfully less restrictive' stance,” Tickmill Group partner Patrick Munnelly highlighted.
“He clarified that the change in statement language was not a signal,” though, “overall, the hawkish read on inflation was walked back in the press conference”.
“President Donald Trump's policies continue to pose a risk to the Fed's policy perspective, and new tariffs are expected to be imposed on Canada, Mexico, and potentially China on Saturday.”