U.S. stocks opened mostly higher as investors digested a slew of corporate earnings reports, including some from the so-called Magnificent 7.
Magnificent 7 stocks are mega-cap technology companies whose shares have significant weighting in major stock indexes and have led much of the rally in stocks the past few years. They are Apple, Microsoft, Amazon, Alphabet (Google), Tesla, Meta (Facebook), and Nvidia.
Last evening, Tesla, Microsoft and Meta reported mixed results, but analysts were eager to hear what the companies had to say about artificial intelligence.
“Our primary question is whether these companies plan to continue to spend aggressively or will they seek lower cost alternatives due to the DeepSeek’s revelation?” said Mike O’Rourke, chief market strategist at JonesTrading.
AI-related stocks fell sharply on Monday after China’s DeepSeek said it built an AI model competitive with OpenAI and ChatGPT with less than $6 million, significantly less than what U.S. companies have been spending on AI.
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Analysts were heartened to hear Meta and Microsoft both reiterated their spending plans. DeepSeek did not come up on Tesla’s earnings call.
However, shares of Nvidia, whose chips power AI and benefit from AI spending, dipped more than 2%. On Wednesday, Bloomberg reported that President Donald Trump’s administration discussed curbing the company’s chip sales to China.
At 10:15 AM ET, the broad S&P 500 index was up 0.31%, or 18.84 points, to 6,058.15; the blue-chip Dow rose 0.19%, or 83.73 points, to 44,797.25; and the tech-heavy Nasdaq gained 0.12%, or 23.93 points, to 19,656.25. The benchmark 10-year Treasury yield slipped to 4.508%.
Corporate news breakdown
With the Federal Reserve’s interest rate moves likely on pause for the foreseeable future, investors have moved on to corporate news for stock market direction. Some of the biggest movers include:
- Microsoft beat earnings estimates in its second fiscal quarter but its sales outlook for the current quarter missed. The software giant said its Azure cloud business struggled but its artificial intelligence business is doing $13 billion in annualized revenue. Shares of the Redmond, Washington company are down almost 5%.
- Tesla missed quarterly profit expectations, but Chief Executive Elon Musk said more affordable models of its cars are on track for this year and he expects its auto business to return to growth this year. Shares are down a fraction.
- Meta posted record quarterly revenue and beat earnings forecasts. Separately, Meta agreed to pay $25 million to settle a 2021 lawsuit Trump brought after his social-media accounts were suspended. Much of the money will go towards Trump’s presidential library. Shares are up more than 4%.
- UPS warned it will miss sales forecasts and that it will cut in half the volume it does for its top customer. It didn’t name the customer, but Amazon it its biggest. UPS shares plunged more than 15%.
- Comcast topped Wall Street’s estimates for the last three months of last year with help from the company’s broadband business. However, shares dropped almost 10% after the company also reported a larger-than-expected decline in broadband subscribers and lackluster subscribers to its Peacock streaming service.
- IBM’s quarterly results beat analysts’ expectations, and shares jumped more than 13%.
- Southwest Airlines beat analysts’ profit expectations in the final months of 2025, boosted by high travel demand and improved airfares.
- Equipment maker Caterpillar reported mixed results, beating earnings estimates but missing on revenues.
- Whirlpool shares tumbled more than 16% after the appliance maker’s outlook was weaker than analysts’ projections.
- Cigna stock fell more than 9% after the insurer missed profit estimates in the last three months of the year.
Separately, iPhone maker Apple is slated to report after the markets close on Thursday.
Bitcoin
Tesla’s bitcoin holdings jumped in value in the final three months of the year because of an accounting change, the EV giant said.
After showing a carrying value of $184 million in digital assets for the prior four quarters, the number suddenly jumped to $1.08 billion in the three months through December, Tesla reported in its earnings release on Wednesday.
The increase was due to a policy change from the Financial Accounting Standards Board, which mandates that corporate digital asset holdings be stated at current market value each quarter starting at the beginning of 2025. Previously, holdings were reported at the lowest value recorded during their ownership, regardless of any subsequent price gain.
Trump’s idea for a national bitcoin strategic reserve and prospects for looser regulation recently propelled the cryptocurrency to record highs.
Bitcoin also got a boost on Thursday from an Illinois bill proposal allowing the state to accept bitcoin donations, hold them for five years, and then transfer, sell, or convert them into another crypto.
Bitcoin was last up 2.22% to $106,083.70.
Economy continues to grow
The U.S. economy grew at a 2.3% annualized rate in the final three months of the year and 2.5% for all of 2024. The quarterly rate was down from 3.1% in the prior three months and slightly below economists’ forecasts.
However, economists aren’t alarmed. “The U.S. consumer continued to power overall economic growth as employment and wage gains remain firm,” wrote Nationwide Chief Economist Kathy Bostjancic in a note. “Massive wealth effects from sharp increases in equity and home values turbo charge spending, especially among upper-income households.”
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
