S&P 500, Dow back away from records as Fed cheer fizzles

US stocks dipped from record highs on Friday as rate-cut euphoria faded, with FedEx (FDX) earnings providing a reality check.

The S&P 500 (^GSPC) fell roughly 0.3%, after the benchmark index ended at an all-time high. The Dow Jones Industrial Average (^DJI) traded steady on the heels of notching its own record close. Leading the way lower, contracts on the tech-heavy Nasdaq Composite (^IXIC) dropped 0.3%.

Stocks surged on Thursday as investors embraced Chair Jerome Powell’s message that the Federal Reserve made a big interest-rate cut to support the economy, not to save it — an idea bolstered by jobless claims data.

That roaring rally is now sputtering amid reminders that risks to growth could still lie ahead. Wall Street is still wondering whether the Fed has fallen behind in keeping the economy on track for a “soft landing”. Traders are pricing in deeper cuts this year than policymakers’ “dot plot” projects, per Fed Funds futures.

Also, those Fed-fueled high spirits are stoking the risk of a bubble, according to a top Bank of America strategist. Michael Hartnett said stocks are pricing in levels of policy easing and earnings growth right now that push investors to go chasing for gains.

FedEx posted a sharp drop in profit in Thursday after-hours, missing Wall Street estimates. The delivery company— a bellwether for the economy — saw Its shares slump as much as 14% in early trading.

Elsewhere, Nike’s (NKE) stock jumped after the sportswear maker named a new CEO as its sales come under pressure.

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Fri, September 20, 2024 at 6:46 AM MST

Nike shares jump 7% on CEO replacement

Nike (NKE) shares jumped on Friday after the sneaker and sport apparel giant announced CEO John Donahoe plans to retire and will be replaced by Elliott Hill, the company’s former president for consumer and marketplace, effective October 14 .

Wall Street analysts cheered the return of Hill, who left Nike in 2020. Shares of Nike rose more than 7% in early trading.

As Yahoo Finance’s Brooke DiPalma reports, the leadership change comes as Nike’s board — which includes founder Phil Knight, former long-time CEO Mark Parker and Apple (AAPL) CEO Tim Cook — sees it fit to refocus on improved product and re-establishing relationships cast aside by Donahoe, such as that with Foot Locker (FL).

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Fri, September 20, 2024 at 6:30 AM MST

Stocks retreat from record highs as Fed rate-cut rally fades

Stocks fell slightly in early trading Friday, backing away from record highs on the S&P 500 (^IXIC) and the Dow Jones Industrial Average (^DJI).

The tech-heavy Nasdaq Composite (^IXIC) also dipped after a monster rally in the prior session on the heels of a jumbo rate cut from the Federal Reserve.

The market euphoria fizzled on Friday after delivery giant FedEx (FDX), a bellwether for the US economy – reported dissapointing quarterly results on Thursday evening.

FedEx stock tumbled in early trading.