A sharp selloff in tech and communications services stocks weighed on market sentiment Friday, though solid earnings results for a blue chip credit card company kept the Dow Jones Industrial Average above water. And the volatility could continue next week thanks to a barrage of Big Tech earnings and a key inflation update.
At the close, the Dow was up 0.6% at 37,986 thanks to a post-earnings pop for American Express (AXP).
Indeed, AXP was the best Dow Jones stock today, surging 6.2%, after the credit card company disclosed higher-than-expected Q1 earnings of $3.33 per share on in-line revenue of $15.8 billion. AXP also said consumer spending was up 8% year-over-year, with spending among millennial and Gen Z cardholders rising 15%.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Looking ahead, Argus Research analyst Stephen Biggar (Buy) sees "continued healthy spending volume from AXP's generally affluent cardmembers, who are less impacted by inflation, and see marketing efforts leading to good cardmember growth."
Netflix sinks after Q1 results
While the Dow managed to notch its third win of the week, the S&P 500 (-0.9% at 4,967) and the Nasdaq Composite (-2.1% at 15,282) extended their daily losing streaks to six.
Weighing on the indexes was a negative earnings reaction for Netflix (NFLX, -9.1%). While the streaming giant reported top- and bottom-line beats in its Q1 results and said subscriber growth was up 16% year-over-year, it said it will stop reporting paid membership growth in fiscal 2025.
"The market hasn't taken kindly to news Netflix will stop reporting quarterly membership numbers," says Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. The plan was always to grow the company's customer base, but now that it's at that inflection point, "there will be nerves around what this means for Netflix's label as a higher-octane growth stock," she adds.
The weakness wasn't confined to Netflix, though. Ahead of their appearances on next week's earnings calendar, several Magnificent 7 stocks – including Alphabet (GOOGL, -1.2%) and Meta Platforms (META, -4.1%) – pulled back.
Super Micro Computer spirals 20%
Elsewhere, Super Micro Computer (SMCI) plunged 23% to close at its lowest level since early February. While no concrete news sparked the selloff, media reports suggest investors could be skittish that the company did not preannounce its earnings report as it has done in seven of the past eight quarters. Rather, the AI server, software and infrastructure company said it will release its full fiscal third-quarter results after the close on Tuesday, April 30.
Friday's slump marks a change of pace for the recent S&P 500 addition. To be sure, SMCI has been one of the hottest stocks of 2024, nearly doubling in value for the year to date. As such, some of today's selling could be investors taking profits on the sizzling tech stock.
Inflation data, busy earnings week on deck
Several major events could spark more volatility in the stock market next week. In addition to a number of Big Tech earnings reports, the economic calendar features the March Personal Consumption and Expenditures (PCE) Price Index. The data measures consumer spending and is the Fed's preferred inflation gauge.
Larry Adam, chief investment officer at Raymond James, says investors needn't worry too much about the whipsaw price action. "While market gyrations can be concerning, remember not to panic – pullbacks and interim spikes in volatility are quite common," Adam reminds us, adding that the S&P 500 is still up 20% from its October lows. "This uninterrupted rally is uncommon as it is important to appreciate that the equity market does not go up in a straight line," he says.
Related content
- What Is Bitcoin Halving and Why Is It Important?
- Get These 40 Earth Day Deals and Discounts
- Super Micro Computer: Why This Hot Stock Could Hit $1,500
-
Stock Market Today: Dow Leads as UnitedHealth Stock PopsUnitedHealth was the best Dow Jones stock Monday on reports that Medicare Advantage payments could rise in 2026.
-
Earnings Season: Live Updates and CommentaryFourth-quarter earnings season is getting underway, and Wall Street is keeping a close eye on both results and guidance.
-
Stock Market Today: Dow Leads as UnitedHealth Stock Pops
UnitedHealth was the best Dow Jones stock Monday on reports that Medicare Advantage payments could rise in 2026.
-
How to Organize Your Financial Life (and Paperwork)To simplify the future for yourself and your heirs, put a financial contingency plan in place. The peace of mind you'll get is well worth the effort.
-
Financial Confidence? It's Just Good Planning, Boomers SayBaby Boomers may have hit the jackpot money-wise, but many attribute their wealth to financial planning and professional advice rather than good timing.
-
Will You Be Able to Afford Your Dream Retirement?You might need to save more than you think you do. Here are some expenses that might be larger than you expect, along with ways to ensure you save enough.
-
Three Steps to Simplify Paying Your Taxes in RetirementOnce you retire, how you pay some of your taxes can change. Here's how to get a handle on them so you don't run afoul of the IRS and face penalties.
-
More SECURE 2.0 Retirement Enhancements Kick in This YearSaving for retirement gets a boost with these SECURE 2.0 Act provisions that are starting in 2025.
-
Saving for Your Emergency Fund: As Easy as 1-3-6An emergency fund that can cover six months' worth of expenses is far easier to build if you focus on smaller goals at first.
-
Stock Market Today: Dow Slides 697 Points on Super-Hot Jobs DataWhen the December nonfarm payrolls report hit the tape, there was no question which way stocks would go at Friday's opening bell.
