Dow rises nearly 200 points, Nasdaq and S&P 500 jump 1% as investors applaud debt ceiling progress: Live updates – CNBC

The Nasdaq Composite is on pace to end the week up, in its six straight winning week.

That would be the first weekly win streak of that length since the six-week period ending Jan. 17, 2020.

The index has been helped by a recent rally in stocks with exposure to artificial intelligence. It has gained more than 1% over the course of the shortened, post-holiday trading week.

— Alex Harring, Robert Hum

First-quarter earnings season is winding down with 99% of S&P 500 companies having reported results. Seventy-eight percent of S&P 500 companies have reported a positive earnings-per-share surprise for the quarter, which is above the five-year average of 77%, according to FactSet.

Earnings growth has disappointed compared to the long-term average, however. S&P 500 companies are beating earnings estimates by 6.5% in aggregate, which is below the five-year average of 8.4%, according to FactSet.

— Yun Li

UBS upgraded CSX to buy from neutral on Thursday and raised its price target to $37 from $33, implying nearly 21% upside from Wednesday’s close.

The Wall Street firm sees a bottoming in industrial-related volumes in the second or third quarter of 2024. Rail stocks typically bottom several months before volumes bottom, analyst Thomas Wadewitz wrote in a note to clients.

“We see a path to volume growth for CSX in 2024 with intermodal growth of +4% offsetting a -1% decline in merchandise,” he said. CSX has also had the most significant improvement in manifest train speed, which positions the company to capture share from trucks, Wadewitz noted.

Shares were up about more than 2% in Thursday’s session.

— Michelle Fox

The AI-driven market in May was readily apparent in the breakdown of best performing sector ETFs, according to data compiled by Bespoke Investment Group.

On the U.S. equity side, the Technology Select Sector SPDR Fund (XLK) had a total return of 8.9% last month, while the Invesco QQQ Trust (QQQ) gained 7.88%.

On the opposite side of the spectrum, the iShares Select Dividend ETF (DVY) fell more than 7%, while energy (XLE) dropped 10%.

It was a rough month for international markets as well, with the All World ex-US (CWI) sinking 3.5%. Brazil (EWZ), India (PIN) and Japan (EWJ) were three country funds with modest gains. Japan’s market was also upgraded by Credit Suisse on Thursday.

— Jesse Pound

After months of being on the sidelines, retail investors appear to be coming back into stocks, with Vanda Research data showing they recently purchased nearly $1.5 billion in U.S. equities.

“After sitting broadly on the sidelines since the end of February, retail investors appear to have bought Wednesday’s relatively small dip in equity markets with conviction,” Vanda senior vice president Marco Iachini wrote. “One day does not a trend make, but it does make us wonder if retail traders are on the precipice of joining this equity rebound, at last. We believe there’s a growing chance they will.”

— Fred Imbert

Microsoft signed a deal earlier in 2023 to invest potentially billion of dollars in cloud-computing startup CoreWeave over several years, CNBC learned from people with knowledge of the matter.

CoreWeave offers Nvidia graphics cards for other companies to rent. The deal ensures that OpenAI would have sufficient computing power going forward. CoreWeave announced on Wednesday it had raised $200 million

Microsoft shares were up almost 1% Thursday afternoon.

— Hakyung Kim, Jordan Novet

So long as the S&P 500 closes anywhere above this past Tuesday’s close of 4205.45, the benchmark U.S. stock index will have closed at its highest point in almost 10 months — since August 19, 2022, to be exact, when the index ended the day at 4,228.48.

In the event the S&P 500, which reached an intraday high of 4223.20 in mid-afternoon trading Thursday, up more than 1%, closes above 4,228.48, it will end the day at the highest point since August 18, 2022 — when it closed at 4,283.74.

The S&P 500 is only 2.4% below its 52-week high, according to FactSet data, but almost 21% above its 52-week low — not including reinvested dividends.

Analysts at firms including JPMorgan Chase, Bank of America and Morgan Stanley are growing concerned on Advance Auto Parts after weak quarterly results on Wednesday. Shares slid 4.8% on Thursday, notching a new low not seen since the early 2010s.

All three firms downgraded the stock on Thursday, and pointed to potential future headwinds as the company also tries to find a suitable chief executive.

“1Q’s results and guidance cut (after providing its outlook mid-quarter on Feb 28) suggests management over-earned last year as it sought to control the controllables and deliver what their investor targets emphasized (i.e., price and structural margins, respectively),” JPMorgan analyst Christopher Horvers said.

Read the full story here.

— Brian Evans

Here are some of the names making the biggest moves in midday trading:

• Dollar General — The stock tumbled nearly 19% after the discount retailer reported an earnings and revenue miss for the first quarter. The company also slashed its full-year outlook.
• Chewy — Shares soared 24% after the pet retailer posted an earnings and revenue beat. Its second-quarter revenue guidance also beat expectations, per StreetAccount.
• PVH — The stock dropped 10% despite the company’s earnings and revenue beat after Wednesday’s close. Its full-year outlook was in line with consensus, but its second-quarter GAAP earnings-per-share guidance of $1.70 was below the $2.26 expected, per StreetAccount.

To see more stocks making midday moves, read the full story here.

— Michelle Fox

Energy stocks led the S&P 500 higher on Thursday.

The sector was the highest performing of the 11, up 2.1% compared with a 0.9% gain for the overall index. Schlumberger N.V. and Baker Hughes led the sector’s ascent with jumps greater than 5%.

But not all sectors were rising with the broader index. Consumer staples was down 0.1%, while utilities dropped 1.2%.

— Alex Harring

Philadelphia Federal Reserve Patrick Harker said Thursday he thinks the central bank is nearing the point when it can stop raising interest rates.

“I do believe that we are close to the point where we can hold rates in place and let monetary policy do its work to bring inflation back to the target in a timely manner,” he said in prepared remarks for a speech in Philadelphia.

Harker is a voting member this year of the rate-setting Federal Open Market Committee.

—Jeff Cox

The market somewhat muted start to the new month comes as investors digest a “mountain of information,” according to Adam Crisafulli of Vital Knowledge.

“On the macro front, things are bullish given the inflation shortfall in Europe (the Eurozone CPI) and the US (the huge drop in the prices paid part of the manufacturing ISM),” he wrote. “While the macro backdrop is favorable, company-specific news was more mixed, with some big earnings disappointments in retail (DG, M, and VSCO) and several underwhelming tech releases (CRM, CRWD, and OKTA).”

— Fred Imbert

Stocks extended their rally on Thursday.

The Dow was up about 0.6% and traded as much as 216 points higher. The Nasdaq Composite advanced 1.1%, while the S&P 500 added 0.9%.

— Alex Harring

Crypto may be “lackadaisical” at the moment but bitcoin and ether are still two of the best performing asset, according to Mike Novogratz.

“I don’t see any urgent sellers or nervous longs, I see people that are kind of bored and stacking,” he told CNBC’s “Squawk Box” Thursday. “There are some sellers, but it’s not like we have a leveraged market right now where people are sitting on pins and needles.”

“On a risk adjusted basis, bitcoin and ether are the two best assets to invest in over two years, three years, six months,” he added. “You shouldn’t buy as much bitcoin as you do JPMorgan stock, but volatility adjusted it’s been a much better bet than JPMorgan.”

The two crypto market leaders are up 65% and 55% year-to-date, respectively, despite lower volatility in recent weeks. As soon as the Federal Reserve cuts interest rates “crypto is going to be off to the races,” Novogratz said.

For more on bitcoin, check out our June outlook here.

— Tanaya Macheel

JPMorgan upgraded Domino’s stock on Thursday, with analyst John Ivankoe noting shares are trading at a discount compared to what the company charges for key products.

Share’s of Domino’s rose nearly 2% on Thursday, but are still down nearly 15% this year.

“A fresh look at estimates shows the stock as too cheap for what is a structurally low cost delivery at $6.99 for a medium 2-topping and take-out provider for a $7.99 3-topping large pizza,” Ivankoe said.

Read the full story here.

— Brian Evans

Investors should be careful about drawing conclusions about the recent strength in stocks, according to Michael Landsberg, chief investment officer of Landsberg Bennett Private Wealth Management.

He noted that almost all stocks in the S&P 500 are around flat for the year outside of a few Big Tech names. Those stocks have rallied coming off of 2022’s selloff and amid growing excitement around artificial intelligence.

“The lack of market breadth is not a positive for the health of the overall market,” he said.

Just three of the S&P 500’s 11 sectors are trading up compared with the start of 2023. Those advancing sectors — information technology, communication services and consumer discretionary — have all gained at least 18% year to date.

Landsberg said the market is likely in a bear market rally, but the bear market itself is not over yet and investors should not chase the rally. He specifically pointed to the past two quarters of decelerating earnings, as well as the lack of breadth driving the current rally, as evidence of downside risk on the horizon.

— Alex Harring

The manufacturing sector reported contraction for the seventh month in a row, though about in line with Wall Street expectations, according to a report Thursday from ISM.

ISM’s Manufacturing Survey for May came in at 46.9%, representing the percentage of businesses reporting expansion. Any reading under 50% represents contraction. Economists had been looking for a reading of 47%, according to Dow Jones.

New orders fell 3.1 percentage points to 42.6% while production rose 2.2 points to 51.1%. In news that gives some hope to the Federal Reserve’s inflation-fighting efforts, prices tumbled 9 points to 44.2%.

—Jeff Cox

JPMorgan Chase downgraded Target on Thursday over concerns of a declining market share as well as disinflation in the company’s grocery segment.

“Today, we believe TGT sits at the center of a number of consumer headwinds,” JPMorgan analyst Christopher Horvers said. “With 51% of its sales derived from discretionary categories (apparel, hardlines, and home), 49% derived from more consumable categories (which are facing disinflation), accelerating share of wallet reversion occurring, and student loans potentially coming due, we see the risk of downward earnings revisions rising.”

Last month, the company gave lukewarm forward guidance after saying sales growth could remain stagnant throughout the current quarter.

CNBC Pro subscribers can read the full story here.

— Brian Evans