Luke Kawa5/29/24

Rising bond yields sink US stocks

The S&P 500 fell 0.7% on Wednesday as rising government bond yields weighed on the stock market.

10-year Treasury yields have risen 15 basis points over the past two sessions, though market pricing for how many interest rate cuts the Federal Reserve will deliver before year-end hasn’t changed. This lends credence to the argument that the supply of Treasuries hitting the market this week — which have been received fairly poorly at auctions — is contributing to the upward pressure on yields. The iShares 20+ Year Treasury Bond ETF has suffered back-to-back daily losses of more than 1% for the first time since early February.

Though Nvidia finished up 0.8%, it couldn’t save the US stock market for a second straight day. Poor breadth continued to bedevil the stock market, with nearly 8 stocks in the S&P 500 down for every one that was up. All 11 S&P 500 sector exchange-traded funds ended in the red, with energy, materials, industrials, and utilities suffering losses of more than 1%.

American Airlines Group was a standout to the downside, falling 13.5% after the company cut its earnings outlook for the current quarter and announced that its chief commercial officer was leaving the company.

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DraftKings drops after issuing downbeat 2026 sales, profit forecasts

DraftKings plunged after the sports betting company gave downbeat guidance for the current year.

Shares were down 15% in recent after-hours trading.

It forecast:

Revenue between $6.5 billion and $6.9 billion, compared with analysts’ estimates of $7.29 billion, according to FactSet.
Adjusted EBITDA of $700 million to $900 million, compared with estimates of $981 million.

For the fourth quarter, DraftKings posted:

Revenue of $1.99 billion, in line with Wall Street’s $1.99 billion expectation
Earnings per share of $0.25, compared with a consensus estimate of $0.09.

DraftKings Reports Fourth Quarter Revenue Growth of 43% | DraftKings Inc.

DraftKings Reports Fourth Quarter Revenue Growth of 43% | DraftKings Inc.

It forecast:

Revenue between $6.5 billion and $6.9 billion, compared with analysts’ estimates of $7.29 billion, according to FactSet.
Adjusted EBITDA of $700 million to $900 million, compared with estimates of $981 million.

For the fourth quarter, DraftKings posted:

Revenue of $1.99 billion, in line with Wall Street’s $1.99 billion expectation
Earnings per share of $0.25, compared with a consensus estimate of $0.09.

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Max Knoblauch10h

Rivian climbs after posting better-than-expected Q4 results; sees R2 SUV hitting the market in Q2

EV maker Rivian reported its fourth-quarter and full-year earnings results after markets closed on Thursday. Its shares climbed 13% in after-hours trading.

In the fourth quarter, which coincided with the end of federal EV tax credits in the US, Rivian booked $1.29 billion in revenue, down 26% year over year but above analysts’ expectations of $1.26 billion. The company posted an adjusted loss of $0.54 per share in Q4, compared to the expected loss of $0.68 per share.

Rivian forecast full-year adjusted losses in the range of $1.8 billion to $2.1 billion, compared to the $1.75 billion loss expected by Wall Street.

2026 is set to be a big year for the company, with its upcoming $45,000 R2 SUV planned to begin deliveries in the second quarter. Rivian issued full-year delivery guidance of between 62,000 and 67,000 vehicles, compared to Wall Street’s expectations of 65,700. Analysts polled by FactSet expect 14,700 of those 2026 deliveries to be R2s. Last year, Rivian delivered 42,247 vehicles.

“It’s incredibly exciting to see the early strong reviews of the R2 pre-production builds, and we can’t wait to get them to our customers next quarter,” CEO RJ Scaringe said.

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Matt Phillips10h

Arista Networks soars as it beats on Q4 EPS and revenue, gives upbeat sales guidance

Arista Networks, which sells equipment and software used to run and monitor data center networks, reported better-than-expected fourth-quarter earnings and sales after the close of trading on Thursday.

Arista shares were up about 9% in the after-hours session.

Here’s what the switch and router maker reported:

Adjusted earnings per share of $0.82 vs. Wall Street expectations for $0.76, according to FactSet.
Sales of $2.49 billion vs. an expected $2.38 billion, per FactSet data.
A non-GAAP Q4 gross margin, a measure of how profitable a company’s core products are to produce, of 63.4% vs. previous guidance of 62% to 63%.
Guidance for Q1 sales of approximately $2.6 billion vs. the $2.46 billion expected on Wall Street.
Guidance for a Q1 non-GAAP gross margin of between 62% and 63% vs. the 63% FactSet forecast.

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Matt Phillips10h

Coinbase posts record stablecoin revenue but falls short of expectations for Q4 sales

Shares of cryptocurrency exchange Coinbase jumped after-hours on Thursday after the company reported record stablecoin revenue, despite Q4 revenue numbers that missed Wall Street expectations.

The stock was up 3.1% in recent trading.

Revenue came in at $1.78 billion vs. the $1.81 billion consensus analyst expectation, per FactSet.
Transaction revenue was $982.7 million vs. a $998 million forecast.
The company reported adjusted earnings per share of $0.66, compared with $3.37 a year earlier.
Stablecoin revenue hit a record $364.1 million, up 61% from the same quarter the previous year.

Earlier Thursday, Coinbase seemingly suffered an outage, saying it was “aware that customers may be unable to buy, sell, transfer on Coinbase.com at this time,” but noting that “your funds are safe.” The company said the issue was resolved just over an hour later.

Coinbase shares — which were added to the S&P 500 last May — have been crushed by the downturn in crypto this year. Through Wednesday’s close, the stock was down by more than 30% in 2026. And that was before the stock caught a double downgrade on Thursday before the report.

Applied Materials jumps after posting better-than-expected Q1 results, strong Q2 outlook

The semicap company just reported its Q1 results.

Applied Materials campus in Silicon Valley

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