What’s News in Markets: Dow Hits 54,000, Chip Stocks Waver, SpaceX Rebounds
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Why did falling oil prices and a weak jobs report boost the market this week?
Your money briefing is still on a break, but we'll be back with more personal finance information for you in the future. Until then, here's the news moving the markets this week. Hey listeners, it's Saturday, August 8th. I'm Imani Moiz for the Wall Street Journal. And this is what's news in markets. Our look at the biggest stock moves of the week and the news that drove them. Let's dive in. It was a mostly upbeat week for stocks, even if the ride wasn't always smooth. Falling oil prices helped fuel a rally early in the week, as signs of progress toward reopening the Strait of Ormuz eased some of investors' concerns about inflation.
How did the Dow Jones break the 54,000 mark and which stocks led the rally?
Then on Friday, a surprisingly weak jobs report gave stocks another boost. A slowing labor market isn't usually something investors cheer, but in this case, it prompted traders to dial back expectations for a Federal Reserve rate hike. Overall, the NASDAQ led the gains, rising 5.2%, the Dow gained nearly 3%, and the SP 500 advanced 3.6% to end the week at a record high.
The Dow Jones industrial average crossed 54,000 for the first time ever, extending its winning streak as investors rewarded strong earnings across a wide range of industries. Disney was the Dow's second best performer this week, trailing only NVIDIA. Don't worry, we'll get to NVIDIA in a minute. Shares in the entertainment conglomerate jumped 9% after strong attendance at its domestic theme parks and a billion-dollar box office hit from Toy Story 5 helped drive better than expected earnings. Healthcare giant Amgen gained 6.7% as the company lifted its full-year forecast despite ending development on one of its obesity drugs. In the most recent quarter, the drug maker beat Wall Street's revenue expectations by more than $600 million, as sales in two of its existing treatments surged nearly 40%.
What earnings drove Disney, Amgen and Caterpillar higher and why did they matter?
And Caterpillar also helped power the Dow higher, rising 3.4%. The construction equipment maker reported its first $20 billion quarter in its century-long history, and raises outlook for the year. The company says demand for generators, engines, and construction equipment is being fueled by one of Wall Street's favorite trends, AI.
Strong earnings weren't enough to fuel gains in the tech sector, especially in the chip industry where investors have already priced in so much growth that even eye popping results aren't always enough to impress them. Just look at Sandisc. Revenue at the data storage company nearly quintupled from a year ago to almost nine billion dollars, while a twenty-three million dollar loss last year turned into nearly seven billion dollars in profit. Still, shares fell more than 5% immediately after the report. The stock eventually paired losses to end the week 0.2% lower. AMD shares also dipped this week despite reporting record quarterly sales.
Why did chip makers like Sandisk and AMD stumble despite record revenues?
But investors seem to care more about an update from one of AMD's customers, SpaceX. Elon Musk said the rocket company plans to stop buying AMD chips and build its AI infrastructure exclusively on NVIDIA's technology. AMD shares dropped 7% on Wednesday after the announcement, and Nvidia shares rallied. AMD stock finished the week up 1.5%, while NVIDIA shares surged more than 11%, becoming the top performer in the Dow.
And speaking of Musk, SpaceX shares plunged more than 13% Wednesday after it reported its first earnings as a publicly traded company. Revenue nearly doubled from a year earlier to seven point eight billion dollars, but investors focused on just how much money Musk is spending on his ambitions in AI. SpaceX spent $18.4 billion on capital investments in the latest quarter. About $15.8 billion of that went toward AI projects, roughly double what the company spent on AI just one quarter earlier. That fueled concerns about whether all that spending will eventually pay off.
How did Elon Musk’s SpaceX announcement and AI spending affect its stock performance?
But SpaceX believers push the stock higher despite the odds. Investors were bracing for even more pressure Thursday, when the company's post IPO lockup period expired, potentially flooding the market with as many as nine hundred and twelve million additional shares.
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Chapters
6 chapters
1
Why did falling oil prices and a weak jobs report boost the market this week?
0:00–0:40
2
How did the Dow Jones break the 54,000 mark and which stocks led the rally?
0:40–2:04
3
What earnings drove Disney, Amgen and Caterpillar higher and why did they matter?
2:04–3:13
4
Why did chip makers like Sandisk and AMD stumble despite record revenues?
3:13–4:25
5
How did Elon Musk’s SpaceX announcement and AI spending affect its stock performance?
4:25–5:21
6
What were the key takeaways and where can listeners find more market coverage?
5:21–5:55
Speakers
2 identifiedMore from WSJ Your Money Briefing
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