Midday Fly By: Alphabet continues ascent, fueled by AI optimism

Stocks were drifting and searching for direction early this morning following a strong tech-driven rally yesterday, but the Dow and S&P have resumed their uptrend as the session progresses.

On the macro front, the probability of a rate cut by Federal Reserve in December has risen sharply and is now estimated at around 80% after several Fed officials voiced support for a cut amid labor-market softness. Investors have turned their attention to delayed September data releases, including retail sales and producer price inflation figures, as well as ADP’s report that preliminary private payrolls declined an average of 13,5000 in the four-weeks to November 8.

Get caught up quickly on the top news and calls moving stocks with these five Top Five lists.

1. STOCK NEWS:

• Alphabet (GOOGL) shares rose in early trading while Nvidia (NVDA) shares dropped following a report from The Information saying that Meta Platforms (META) is in talks to spend billions on Google’s AI chips
• Alibaba (BABA) shares advanced in New York after the company posted better-than-projected growth in its cloud business based on enormous demand for computing during China’s AI boom
• Kohl’s (KSS) shares jumped after the department store operator beat Q3 earnings expectations and raised guidance
• Best Buy (BBY) shares slipped despite the home electronics retailer’s own “beat & raise” Q3 report
• Dick’s Sporting (DKS) also posted a “beat & raise” quarter and said it is taking strategic actions to address unproductive assets, including optimization of inventory and closure of underperforming stores

2. WALL STREET CALLS:

• Citi upgraded shares of Brinker (EAT), operator of the Chili’s and Maggiano’s restaurant chains, to Buy
• Applied Materials (AMAT) upgraded to Buy at UBS
• Wedbush double upgraded Fannie Mae (FNMA) to Outperform from Underperform with a price target of $11.50 after a new analyst assumed coverage
• EHang (EH) downgraded to Neutral at JPMorgan
• Estee Lauder (EL) downgraded to Sell at Rothschild & Co Redburn

3. AROUND THE WEB:

• A KKR-led (KKR) consortium sold its stake in Tokyo’s Hyatt Regency hotel for over $800M to an undisclosed buyer, WSJ says
• Apple (AAPL) CEO Tim Cook has no mandatory retirement age, but discussions about his successor are emerging, WSJ reports
• TSMC (TSM) has filed a lawsuit in Taiwan’s Intellectual Property and Commercial Court against its former SVP Wei-Jen Lo, who recently joined Intel (INTC), Reuters says
• Italian police raided two Amazon (AMZN) sites on Monday as part of a growing investigation into alleged customs and tax fraud involving Chinese imports, Reuters reports
• Peloton’s (PTON) new artificial intelligence-powered bikes and treadmills, called the Cross Training Series, is seeing only modest traction at retail stores in the eight weeks since launching, Bloomberg reports

4. MOVERS:

• Symbotic (SYM) and Amentum (AMTM) increases after reporting quarterly results
• Esperion (ESPR) higher after Piper Sandler initiated coverage of the stock with an Overweight rating
• Autolus Therapeutics (AUTL) gains in New York after announcing the NICE has published draft guidance recommending Aucatzyl
• Semtech (SMTC) lower after reporting Q3 results and providing guidance for Q4
• Invivyd (IVVD) falls after D. Boral Capital downgraded the stock to Hold

5. EARNINGS/GUIDANCE:

• Zoom Communications (ZM) reported Q3 results, with EPS and revenue beating consensus
• Abercrombie & Fitch (ANF) reported Q3 results, with CEO Fran Horowitz commenting, “We achieved three years of consecutive quarterly sales growth”
• Analog Devices (ADI) reported Q4 results and provided guidance for Q1
• J.M. Smucker (SJM) reported Q2 results and narrowed its guidance for FY26, with CEO Mark Smucker commenting, “We are pleased with our second quarter results”
• Burlington Stores (BURL) reported Q3 results and raised its guidance for FY25

INDEXES:

Near midday, the Dow was up 0.93%, or 432.36, to 46,880.63, the Nasdaq was down 0.04%, or 9.27, to 22,862.74, and the S&P 500 was up 0.42%, or 28.36, to 6,733.48.