Stocks opened higher Tuesday as investors cheered China's latest round of stimulus measures. And while some disappointing economic data here at home sparked a mid-morning decline, the main indexes recovered by lunchtime as Nvidia (NVDA) stock soared.
Overnight, the People's Bank of China (PBOC) cut its short-term interest rate and lowered the amount of capital reserves banks are required to carry. The PBOC also said it will provide measures to support the country's housing sector.
This helped boost several U.S.-listed Chinese stocks, including e-commerce giant Alibaba Group Holding (BABA, +7.9%) and Temu parent PDD Holdings (PDD, +11.2%).
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.
Consumer confidence plunged in September
The main benchmarks briefly slipped into negative territory after The Conference Board said its Consumer Confidence Index fell to a lower-than-anticipated 98.7 in September, down sharply from the August reading of 103.3.
"Consumers aren't feeling so rosy this month as the typical complaints about price pressures remained," says José Torres, senior economist at Interactive Brokers. "However, job uncertainty is starting to weigh on sentiments as well," with households expressing unhappiness over fewer working hours and decelerating pay growth, he adds.
Still, the headwinds from the consumer confidence miss quickly abated, with the Dow Jones Industrial Average finishing up 0.2% at 42,208 and the S&P 500 adding 0.3% to 5,732 – new record closes. The Nasdaq Composite gained 0.6% to 18,074.
Nvidia rallies on Blackwell optimism
Helping the main indexes rebound was a big rally in Nvidia, which surged 4.0% – gaining $113 million in market value along the way.
Today's pop came courtesy of a bullish note from Morgan Stanley that suggested Nvidia is seeing strong demand for its Hopper and Blackwell chips. The latter, it says, could see 450,000 units produced in Q4, which creates potential revenue of more than $10 billion for the chipmaker.
Shares of the mega-cap stock are now up nearly 18% since September 6.
Starbucks gets hit with a Sell rating
Starbucks (SBUX) fell 1.1% after Jefferies analyst Andy Barish downgraded the coffee chain to Underperform (the equivalent of Sell) from Hold.
While new CEO Brian Niccol "suggests necessary strategic change is now on the table, we believe execution will be challenged as issues like operations, culture, value perception and tech take time to fix," Barish wrote in a note to clients. He believes fiscal 2025 could be a "'throwaway' year" for Starbucks as it reinvests, stabilizes and then attempts to accelerate its business.
The analyst also lowered his price target on the blue chip stock, to $76 from $80 – representing implied downside of 20% to current levels.
Starbucks has done well on the price charts since the mid-August news that Niccol would be taking over as CEO, up 26% or so. Still, shares remain roughly 2% lower for the year to date.
Visa sued by DOJ
Elsewhere, Visa (V) plunged 5.4% – making it the worst Dow Jones stock today – after media reports indicated the Department of Justice filed an antitrust lawsuit against the financial giant. The DOJ has been preparing a case against Visa that accuses it of illegally monopolizing the debit card market, according to Bloomberg.
"This is still speculation and hard to analyze the actual potential outcomes," says Baird analyst David Koning. And while Koning understand investors' fear of regulatory scrutiny, he maintains an Outperform (the equivalent of a Buy) rating on the large-cap stock given Visa's "high-quality earnings stream, secular growth, and value-added services."
Related content
- Capital Gains Tax Explained: What It Is and How Much You Pay
- 5 Hard Truths Investors Must Hear: Lessons from Josh Brown's New Book
- Kiplinger's Economic Calendar for This Week
-
Heirs Inheriting Crypto? Don't Make It a Headache for ThemIf you have cryptocurrency in your estate, you'll need meticulous plans and clear instructions to ensure beneficiaries don't lose out after you're gone.
-
DIY Retirement Planning: A Smart Move or a Risky Endeavor?You can cut the cost of retirement planning by doing it yourself. But for something this important, it might be wiser to call in the professionals.
-
Galentine's Day: A Time to Promote Financial Literacy Among FriendsHere are three things women can do to help their friends gain financial knowledge and confidence.
-
Stock Market Today: Markets Turn Lower on Nasty Inflation SurpriseEquities sold off after a hot reading on consumer price inflation pushed back rate cuts to autumn or year-end.
-
CPI Report Puts the Kibosh on Rate Cuts: What the Experts Are Saying About InflationCPI Consumer price inflation reared its ugly head to start the year, dashing hopes for the Fed to lower borrowing costs anytime soon.
-
These Two Issues Are Critical to Efficient Retirement PlanningYou're saving hard for retirement, but if you're not thinking ahead about taxes and the cost of health care, your savings — and your legacy — could be at risk.
-
How to Use Good Debt (While Identifying and Avoiding Bad Debt)Not all debt is bad, but knowing the difference between good debt and bad debt and how to use them can help you get ahead financially and stay ahead.
-
Stock Market Today: Markets Reflect Elevated UncertaintyInvestors and traders as well as CEOs and central bankers continue to adjust to a new administration in Washington, D.C.
