S&P 500 falls Friday, on track to snap a 3-week winning streak: Live updates

This year, Wall Street extended its AI-powered bull market into a second year, far surpassing the year-end forecasts made by top strategists. In fact, all of them turned out to be very wrong.

Original 2024 outlooks for the S&P 500 ranged from a low of just 4,200 at JPMorgan by Dubravko Lakos-Bujas, to a high of 5,200 from Oppenheimer’s John Stoltzfus. Since then, strategists have updated their outlooks throughout 2024 to reflect a myriad of altered conditions — with one firm now issuing a year-end target of 6,200 for the broad-market index.

Barring a December cataclysm, strategists from JPMorgan Chase, Goldman Sachs and UBS were among those that were far too bearish. The S&P 500 closed Thursday at 6,051.25, more than 800 points above the highest forecast at the start of the year with a year-to-date gain of 27%.

Read here for who on the Street got it right and wrong, and for the factors that caught most of strategists offsides this year.

— Pia Singh

Information technology was the top-performing sector in the S&P 500 after Broadcom’s results bolstered investor optimism in artificial intelligence. It was one of four sectors trading in positive territory in early trading.

The sector rallied 0.8%, with the leading stock Broadcom rallying more than 21%. Micron Technology shares popped nearly 3%, and Arista Networks popped more than 4%.

The S&P 500 itself gained 0.1%.

— Sarah Min

Shares of Broadcom were last more than 22% higher.

— Brian Evans

Goldman Sachs vice chairman Robert Kaplan, also the former president of the Federal Reserve Bank of Dallas, is looking to see a slower pace of rate cutting from the Federal Reserve.

“Inflation, I think, looks a little stuck here. There’s some things better, like in services. There’s some things worse, like in food and vehicles,” Kaplan said Friday on CNBC’s “Squawk Box,” adding that the benchmark rate seems “safe” between a range of 4.25% and 4.5%.

But higher interest rates are necessary to keep up with the current level of government spending, Kaplan noted, saying that he is looking to see how major spending programs will be managed under the new presidential administration. He is also looking to see more workforce growth, which is disinflationary and has allowed for rate cuts thus far, he added.

“Will we actually get fiscal spending under better control and not as stimulative? We’ve got an extraordinary level of fiscal spending going on right now … and I think some of this strength, I think on the margin, is a little bit artificial,” he said. “This [Fed rate decision] is not a no brainer.”

— Pia Singh

A strong fourth-quarter report should set PayPal‘s stock up for another big year in 2025, according to Wolfe Research.

Analyst Darrin Peller upgraded the payments stock to outperform from peer perform. Shares of PayPal are already up more than 40% this year, but there is a runway for fundamental improvement going forward, Peller said in a note to clients.

“We see strong 4Q results and a conservative FY25 guide. We believe PYPL’s February ’25 Investor Day will highlight a path from 4%+ (non-float-impacted) GP growth in 2025 to MSD-HSD gross profit growth in 2026 and HSD GP growth longer-term,” the note said.

Peller also highlighted that PayPal has the largest monthly user base of any digital wallet company outside of China.

“Under the right leadership team, we see plenty of opportunity to monetize this base,” the note said.

Peller set a price target of $107 per share for PayPal, which is about 19.7% above where the stock closed Thursday.

Shares of PayPal were up nearly 2% in premarket trading.

— Jesse Pound

These are some of the stocks moving before the bell on Friday:

• Broadcom — Shares surged nearly 18% after the semiconductor maker reported fiscal fourth-quarter earnings that surpassed Wall Street’s expectations.
• RH — The luxury furniture retailer’s shares skyrocketed nearly 18% in premarket trading after hiking its guidance for financial performance.
• Penn Entertainment — The online sports betting stock popped 5% on the back of JPMorgan’s upgrade to overweight from neutral.

See the full list here.

— Alex Harring

Fourth-quarter e-commerce trends for Amazon are tracking in line to slightly above initial estimates, according to Baird.

The firm increased its price target on Amazon shares to $260 from $220, implying 13.5% upside from Thursday’s close.

Analyst Colin Sebastian cited expanding generative AI contributions and encouraging trends in the cloud services segment.

“Our checks are also positive with ongoing market share gains as consumers are responding to low prices and speedy deliveries. This [is] despite increasing competition from Shopify/Temu/Walmart/Shein/TikTok Shops,” Sebastian wrote in a Friday note.

— Hakyung Kim

Shares of Broadcom surged more than 18% during premarket trading on the heels of the chipmaker’s fourth-quarter earnings topping Wall Street’s expectations and its CEO Hock Tan saying the company is developing custom artificial intelligence chips with three large cloud customers.

For the period, Broadcom posted adjusted earnings of $1.42 per share, while analysts surveyed by LSEG had penciled in $1.38 in earnings per share. Revenue, however, came in weaker than expected, with the company posting $14.05 billion compared to the consensus estimate of $14.09 billion.

This year, the stock has solidly outperformed the broader market, rising nearly 62% year to date.

— Sean Conlon, Kif Leswing

European stocks opened lower on Friday, on the back of disappointing data prints from the U.K. and Germany.

The pan-European Stoxx 600 was down 0.2% by 10:25 a.m. London time, with health-care and mining stocks among those pulling the index into negative territory.

Investors were reacting to unexpected contractions in both the U.K.’s October GDP print and key export data from Germany.

The Sterling was lower against the dollar, while the euro edged higher against the greenback.

— Chloe Taylor

Chinese stocks led losses in Asia after affirmations from Beijing on its economic policies seem to have fallen short of investors’ expectations.

The mainland Chinese CSI 300 lost 2.37% and ended at 3,933.18, while Hong Kong’s Hang Seng index was down 1.83% in its final hour of trade.

Most other Asia-Pacific markets also fell, tracking Wall Street declines following a hotter-than-expected producer price inflation reading.

The outlier was South Korea’s Kospi, which gained 0.5% to close at 2,494.46, marking a four-day winning streak, while the small-cap Kosdaq rose 1.52% to 693.73, also notching the fourth straight winning day.

— Lim Hui Jie

These are the stocks making the biggest moves after the bell Thursday:

• Broadcom — Shares popped 14% after the company posted better-than-expected earnings and said it is seeing strong demand as it develops custom artificial intelligence chips. The company offered stronger-than-expected guidance for the fourth quarter and its semiconductor solutions group.
• RH — RH surged nearly 18% despite posting third-quarter earnings that fell short of Wall Street’s estimates. The company raised its fourth-quarter guidance and said it expects revenue growth to range between 18% and 20%, versus an LSEG estimate of 7.1%.

— Samantha Subin