Wall Street Breakfast: What Moved Markets

Wall Street’s benchmark S&P 500 (SP500) index on Friday closed out both the week and August in positive territory. The latter achievement was especially impressive considering the plunge experienced by the average at the beginning of the month.

In what is now infamously known as “Black Monday 2024,” the S&P (SP500) slumped 3% on August 5 due to a combination of the unwinding of the yen carry trade and growth fears sparked by the July nonfarm payrolls report. The rest of the month was all about rebounding, driven by economic data on inflation and retail sales that helped becalm recession fears and a signal by the Federal Reserve that it was ready for interest rate cuts.

The spotlight this week was on chip giant Nvidia’s (NVDA) results. The company showed the AI craze was very much real after more than doubling quarterly revenue. However, for market participants now used to blowout results and guidance, the firm’s latest outlook failed to meet up to the loftiest of expectations.

For the week, the S&P (SP500) climbed +0.2%, while the blue-chip Dow (DJI) advanced +0.9%. The tech-heavy Nasdaq Composite (COMP:IND) slipped -0.9%. Read a preview of next week’s major events in Seeking Alpha’s Catalyst Watch.

Meta (META) CEO Mark Zuckerberg said it was wrong for Biden administration officials to pressure the company to censor COVID-19 content in 2021. “I feel strongly that we should not compromise our content standards due to pressure from any administration – and we’re ready to push back if something like this happens again,” he wrote in a letter to the House Judiciary Committee. Zuckerberg also admitted that Meta shouldn’t have hidden content related to corruption allegations involving Hunter Biden and said he would not make contributions to support electoral infrastructure this election cycle. (352 comments)

It’s official! The bidding war for Paramount Global (PARA) concluded after Edgar Bronfman Jr. dropped his pursuit of acquiring the storied Hollywood studio for $6B that challenged Skydance Media’s merger deal. His exit means that Skydance will become the new owner of Shari Redstone’s media empire, with the deal expected to be completed in the first half of 2025. “We continue to believe that Paramount is an extraordinary company, with an unrivaled collection of marquee brands, assets and people,” said Bronfman. Reports also suggested the decision was partly due to a tight deadline to submit financial documents. (90 comments)

You called it. Trading following Nvidia’s (NVDA) results was a wildcard! The stock slumped 7% AH on Wednesday despite the AI darling’s impressive results and guidance, along with a $50B buyback. Nvidia later pared some of the losses, and while SA Investing Group Leader Victor Dergunov called the earnings “excellent,” the market likely wanted more. In other AI news, Super Micro Computer (SMCI) plunged 19% on Wednesday after disclosing that it would delay filing its annual 10-K report, soon after Hindenburg Research issued a new short report. (616 comments)

Ford (F) became the latest company to scale back its diversity, equity and inclusion program, joining several other U.S. firms that have revised their policies amid increasing pressure and online criticism. The automaker will no longer participate in the Human Rights Campaign’s Corporate Equality Index, while it has refocused employee resource groups and is shifting some of its corporate sponsorships. Activist and political commentator Robby Starbuck claimed credit for pushing many companies to modify or eliminate their DEI initiatives, with Lowe’s (LOW) revealing a policy shift earlier this week. (83 comments)

Warren Buffett’s Berkshire Hathaway joined the coveted trillion-dollar club this week, making the investment behemoth the first non-tech company to reach that level. Berkshire (BRK.B) shares have gained 31% this year and are up about 9% since its last earnings report. The company is the eighth U.S. firm to ever reach the milestone and the ninth globally. Investing Group Leader Daniel Jones believes Berkshire’s stock is worth the premium, while REITer’s Digest said its recent rebound leaves limited upside. (45 comments)