Stocks closed higher for a fourth consecutive session Thursday as investors took the Federal Reserve's Wednesday policy statement and subsequent words from Fed Chair Jerome Powell as signs the central bank is done hiking interest rates.
The Fed yesterday held rates steady for a second straight meeting. After the policy statement, Powell said in his presser that the committee is "not confident" that it's done enough to bring down inflation, but that it's also "not confident" that it hasn't done enough. Many interpreted this as an indication that there will be no more rate hikes. According to CME Group, futures traders are now pricing in an 80% chance the Fed will keep rates unchanged at its next meeting in December – up from 54% one month ago.
There's still a lot of new economic data for the Fed to consider over the next six weeks, though. Ahead of tomorrow's October jobs report, data from the Labor Department showed initial jobless claims rose 5,000 last week to 217,000 – a seven-week high.
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Palantir soars on billion-dollar AI outlook
On the earnings front, Palantir Technologies (PLTR) spiked 20.4% after the data analytics firm's beat-and-raise report. The company cited growth around its Artificial Intelligence Platform (AIP), which saw the number of users nearly triple in the third quarter. CEO Alex Karp expects AIP's revenue run rate to hit $1 billion by 2025.
"Excitement around Palantir's AIP was seemingly validated by optimistic early adoption signs reported by management," says Jordan Berger, analyst at global research firm Third Bridge. "If successful, AIP could ignite Palantir's go-to-market motion in a transformational way, however, our experts caution that due to the complexity of the core technology deployment, the net benefit generated by AIP remains to be seen."
What's more, Palantir reported a fourth straight quarter of profitability in Q3, meaning it is now eligible for inclusion in the S&P 500. Karp said this is "a milestone that we have been working towards and knew was within reach."
Starbucks, Roku rally after earnings
PLTR wasn't the only big earnings mover Thursday. Starbucks (SBUX), for one, surged 9.5% after the coffee chain unveiled higher-than-expected fiscal fourth-quarter earnings and revenue. Strategic pricing and consumers' preference for more premium beverages helped the average ticket grow by 6% year-over-year, while transactions were up 2%.
Additionally, Roku (ROKU) stock climbed 30.7% after the streaming company reported top- and bottom-line beats in its third quarter due in part to a "strong performance in content distribution and video advertising." Roku also said it had more subscribers than anticipated in Q3 and forecast fourth-quarter revenue above what analysts are expecting.
Apple earnings up next
Next up on the earnings calendar is Apple (AAPL, +2.1%), which reports after tonight's close. At last check, AAPL stock was up marginally in after-hours trading as investors wait for the tech giant's fiscal fourth-quarter results.
At the close, the Dow Jones Industrial Average was up 1.7% at 33,839, the S&P 500 was 1.9% higher at 4,317, and the Nasdaq Composite had gained 1.8% to 13,294.
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