The stock market rally skyrocketed after Donald Trump won the presidential election, with the major indexes all surging to record highs and many leading stocks across key sectors boasting double-digit gains. The Fed cut rates again, as expected, with Fed chief Jerome Powell not giving any signals that they'll stop soon.
Palantir, Astera Labs, Vistra Axon Enterprise were among the many big earnings winners, while MercadoLibre and Clear Secure were notable losers.
Tesla skyrocketed back to a $1 trillion valuation on hopes that a Trump victory, strongly backed by CEO Elon Musk, will help the EV giant.
Stock Market Soars On Trump Victory
The Dow Jones had its best postelection gain since 1896, hitting record highs along with the S&P 500 and Nasdaq. Leading stocks also vaulted higher, with dozens of breakaway gaps. Earnings remained heavy, with many big winners and losers. Treasury yields ran up to four-month highs before reversing lower.
Fed's Powell Just Dovish Enough
The Federal Reserve provided the expected quarter-point rate cut and Chairman Jerome Powell remained just dovish enough to keep the Trump election rally going. Powell's overall message is that more rate cuts are coming, despite strong economic growth, because the job market continues to "very gradually cool." Still, the Fed is just starting to discuss the timing and pace of cuts, Powell said. Whether the Fed cuts on Dec. 18 will depend on the data. He said the Fed will chart a "middle path" as it lowers its key rate to a neutral level, taking care not to "get behind the curve" nor risk a stalling out of progress on inflation. Powell's most reassuring remark may have been that the Fed won't begin to factor in the impact of Trump administration policies until they become clear, likely well into 2025. Markets had been reducing odds of rate cuts next year as Wall Street looks ahead to tax cuts and possibly tariffs.
Palantir Skyrockets On Earnings
The data analytics software maker and AI play said Q3 GAAP earnings grew 43%. Revenue rose 30% to $725.5 million, with growth accelerating yet again. Both beat views. Government revenue grew 33% to $408 million, beating while commercial sales rose 27% to $317 million, missing. But U.S. commercial revenue jumped 54%. For the current quarter, Palantir guided up on revenue. Shares surged to a new high.
AI-Exposed Chip Stocks Rise
Astera Labs, Macom Technology Solutions and SiTime saw their shares rocket after they each posted better-than-expected September-quarter results, thanks to a boost in business from AI data centers. Astera, which makes high-speed-data connectivity chips, said its sales rose 206% year over year and 47% vs. Q2. Macom, which also makes connectivity chips, reported a 33% yearly gain. SiTime, which makes precision timing chips, said its sales jumped 62% in Q3.
Meanwhile, chip designer Arm Holdings and wireless-chip leader Qualcomm delivered beat-and-raise quarterly reports. Meanwhile, chipmakers exposed to lagging markets such as PCs, smartphones, automotive and industrial offered disappointing Q3 reports. They included Cirrus Logic, Microchip Technology, NXP Semiconductors and Wolfspeed.
Cybersecurity Firms Mixed.
Fortinet earnings rose 53% to 63 cents, the third straight quarter of accelerating growth. Revenue climbed 13% to $1.51 billion, the second straight quarter of faster gains. Both beat. Fortinet guided Q4 revenue in but slightly lower on billings. But shares rose to a new high. Cloudflare said Q3 adjusted profit rose 25% to 20 cents per share while revenue increased 28% to $430 million, slightly beating. But shares tumbled on a Q4 revenue outlook that's just below consensus. Qualys reported better-than-expected Q3 results amid low expectations. Adjusted EPS rose 3%, revenue climbed 8% and billings 14%. Shares skyrocketed from 52-week lows.
Margin Outlook Hits Arista Networks
Arista Networks said adjusted EPS grew 31%, easily beating. Revenue rose 21% to $1.81 billion, also topping. The networking giant guided up on Q4 revenue. For 2025, Arista forecast revenue growth of 15%-17% to nearly $8 billion but operating margin guidance disappointed. Also, the announced a 4-for-1 stock split. Shares tumbled Friday, but still rose for the week.
Utility Earnings
With the backdrop of energy regulators rejecting an expanded nuclear power deal between Amazon.com and Talen Energy, Constellation Energy and Vistra topped Q3 views. Constellation reported a 28% EPS gain while revenue climbed 7%, and also raised the midpoint of its full-year EPS target. Vistra EPS fell 24% while revenue swelled 54%. The S&P 500 leader also gave upbeat guidance for Q4 and 2025. After skidding on Monday, Constellation rebounded to pare weekly losses while Vistra roared back toward highs.
More Nuclear Plays
Uranium refiner Cameco reported a surprise 1-cent-per share loss vs. Q3 views for a 19-cent gain. But revenue jumped 25% to $720.6 million, beating. BWX Technologies, which makes nuclear components, reported a 24% EPS rise while revenue growth picked up to 14%. Shares fell slightly but bounced off key support. Emerging nuclear energy company NuScale Power reported a wider-than-expected loss and scant revenue, but shares hit a new high.
MercadoLibre Plunges On Earnings Miss
The Latin American e-commerce and payments giant reported a 9% EPS gain to $7.83, far below consensus of $10. Revenue grew 35% to $5.31 billion, slightly beating. MercadoLibre said investments in its logistics network and credit card business cut into earnings. MercadoLibre stock plunged 16% on Thursday, though it did find support at the 200-day line. Meanwhile, South Korea-focused online retailer Coupang reported EPS rose 20% while sales grew 27% to $7.9 billion, both exceeding expectations. But adjusted EBITDA came in line. Shares plunged 11% from record highs the next day.
Biotechs Rise Amid Earnings
Gilead Sciences and Vertex Pharmaceuticals rose on their third-quarter reports, while TG Therapeutics initially tumbled but ultimately rebounded strongly tanked. Gilead earnings fell 12% while revenue climbed 7% to $7.545 billion, both topping views. The lion's share of Gilead's beat came from Veklury, its Covid treatment, which delivered more than double the sales Wall Street expected. Vertex sales rose 12% to $2.77 billion, while EPS advanced 7% to $4.38, both beating. But the focus is on the pipeline. In January, the FDA will consider approving Vertex's next-generation cystic fibrosis drug and its pain treatment. Meanwhile, TG Therapeutics reported a surprise profit with revenue above views. Sales of its multiple sclerosis drug Briumvi topped official views but missed some whisper numbers.
Viking Reverses Lower After Obesity Data
Viking Therapeutics reported seemingly strong results for its obesity pill on Monday. Patients who took the highest dose of its daily pill lost 8.2% of their body weight over 28 days. That outperformed the placebo group by 6.8%. Investors expected the pill to top the placebo by just 5% to 6%. Further, that was better than Novo Nordisk experimental weight-loss pill, amycretin. Over four weeks, amycretin patients lost 5% more body weight than placebo recipients. But Viking shares reversed a massive premarket gain and slumped more than 13%. Shares later pared weekly losses somewhat.
Payment Stocks Mixed
Affirm reported a smaller GAAP loss of 31 cents per share vs. fiscal Q1 views for a 32-cent loss. Revenue jumped 41% to $698 million while gross merchandise volume rose 35% to $7.6 billion, both comfortably beating. The buy now, pay later specialist guided slightly higher for Q2 revenue. Shares tumbled Friday on earnings, but rose slightly for the week. Square-parent Block reported an in-line 60% EPS gain, while a 6% revenue rise to $5.98 billion fell short. Gross payment volume rose 7.5% to $59.9 billion, far below views. Square gave mixed guidance. Shares fell Friday, erasing weekly gains and falling back below a buy point. Toast, a provider of restaurant software, said Q3 adjusted profit surged 178% to 7 cents. A one-time accrual reversal was a partial benefit. Revenue climbed 26% to $1.305 billion. Management increased 2024 guidance. Shares jumped. Payoneer Global reported Q3 adjusted profit soared 267% while revenue increased 19% to $248.3 million. Shares soared.
Howmet Aero Soars
Howmet Aerospace flew to new highs on its Q3 results and lifted guidance. The aerospace and defense supplier posted a 54% increase in earnings, beating, though revenue just missed with an 11% gain to $1.84 billion. Howmet guided Q4 earnings ahead of estimates. HWM stock spiked with a strong jump off its 50-day line. Elsewhere, TransDigm beat Q4 views with a 22% EPS gain on a 18% revenue rise to $2.18 billion. But it guided lower on fiscal 2025 EPS. Shares fell below key support, but were still up for the week.
In Brief
Hims & Hers Health flipped to EPS of 32 cents adjusted, easily beating, while sales rocketed 77% to $401.6 billion. The online pharmacy makes a compounded version of Novo Nordisk's semaglutide, which is used as a weight-loss and diabetes treatment. Shares fell on results but rebounded to clear a buy point.
CareDx reported adjusted EPS of 14 cents vs. a year-earlier loss while sales grew 23% to $82.9 million, both easily beating. The precision medicines company also raised its full-year sales outlook.
Boeing machinist union members on Monday voted to ratify a new contract and end the seven-week strike after reaching an agreement with the Dow Jones manufacturer. The deals deal includes a 38% general wage increase over four years, along with a $12,000 ratification bonus and beefs up retirement and disability incentives, Shares fell, hitting a two-year low.
Ferrari reported a 7% EPS gain in Q3, roughly in line, as shipments fell. The luxury sports carmaker did not upgrade its full-year forecast. Shares fell.
Axon Enterprise earnings jumped 42%, easily beating Q3 views, as revenue grew 32% to $544.3 million, slightly topping. The Taser, body camera and digital records firm for law enforcement also guided higher. Shares soared.
Duolingo beat third-quarter expectations on the top and bottom lines. The language learning app's earnings surged 717% as revenue jumped 40% to $192.6 million. Shares wavered as new subscribers were a tad light.
Airbnb reported an 11% EPS drop that was just below estimates while a 10% revenue gain to $3.73 billion just beat. Management said it would invest in expanding beyond the core business of vacation home booking. Shares plunged Friday, back below the 200-day line.
HubSpot reported Q3 EPS grew 37% while revenue rose 20% to $670 million, both beating. The web marketing software guided fractionally higher on Q4. Shares jumped.
Datadog earned 46 cents a share, up a penny vs. Q3 2023, while revenue climbed 26% to $690 million. Both comfortably beat. But billings growth fell short while the monitoring and analytics platform guided in line for Q4 revenue.
Dynatrace reported Q3 EPS and revenue rose 19%, both beating. It also guided up for the current quarter. But Dynatrace, which broke out ahead of earnings, fell back on results.
