Markets News, January 28, 2025: Stocks Rebound From DeepSeek Selloff as Focus Turns to Earnings, Fed Meeting; Nvidia Jumps 9%

Biggest S&P 500 Movers on Tuesday

16 hr 15 min ago

Advancers

• Cruise liner operator Royal Caribbean (RCL) reported better-than-expected profits for the fourth quarter and issued an upbeat outlook for 2025, highlighting positive trends in bookings, record price levels, gains in onboard revenue, and new river cruise itineraries. Royal Caribbean shares sailed 12% higher, securing Tuesday’s top performance in the S&P 500 and notching an all-time high. Shares of fellow cruise operators Carnival (CCL) and Norwegian Cruise Line Holdings (NCLH) gained 8.1% and 7.8%, respectively.

• Shares of cybersecurity firm CrowdStrike Holdings (CRWD) surged 9.3% to a record high after Chinese AI startup DeepSeek said it had suffered a large-scale cyberattack. The incident raised awareness about the vulnerabilities of AI platforms and the possibility of bad actors leveraging AI for malicious actions, suggesting opportunities for cybersecurity providers. CrowdStrike also announced that its Falcon cybersecurity platform received 100% detection, prevention, and accuracy scores in a major real-world ransomware test.
• Invesco (IVZ) shares jumped 9% after the investment management firm topped quarterly sales and profit estimates. Robust inflows boosted Invesco’s assets under management and contributed to growth in fee income. Demand for exchange-traded funds and expansion in the Asia Pacific region helped drive the strong performance.

Decliners

• Although Lockheed Martin (LMT) topped adjusted earnings estimates for the fourth quarter, its net sales declined year-over-year and missed forecasts. The aerospace and defense giant issued lower-than-expected profit guidance for 2025, reflecting delays to the F-35 fighter jet program. Defense contractors have seen strong weapons demand amid elevated global tensions but face continued supply chain issues, while efficiency initiatives under the new presidential administration have also affected sentiment around defense spending. Lockheed Martin shares fell 9.2%, losing the most of any stock in the S&P 500.
• General Motors (GM) shares tumbled 8.9% after the carmaker posted an unexpected net loss for the fourth quarter. Significant one-time charges related to restructuring in China and shutting down the Cruise robotaxi project weighed on the results. GM exceeded expectations on revenue and adjusted earnings per share, and assuming the policy environment in North America remains stable, the company expects profit growth in 2025.
• Hewlett Packard Enterprise (HPE) shares dropped 6.5% following reports that the Justice Department could block the IT services firm’s $14 billion acquisition of networking infrastructure provider Juniper Networks (JNPR). Regulators in the European Union already approved the transaction. HPE would be liable for termination fees if the deal fails to come to fruition. Shares of Juniper Networks sank 6.1%.

–Michael Bromberg

Why DeepSeek has Wall Street Bullish on Software Stocks

16 hr 50 min ago

Chinese startup DeepSeek’s super-efficient open-source AI model may have sunk some of Wall Street’s favorite AI stocks on Monday, but it may have also crowned some new favorites. 

Yesterday was the worst day for Nvidia (NVDA) and the Philadelphia Semiconductor Index (SOX) since March 2020. Yet some tech sector stocks have soared—Salesforce (CRM) stock has risen 8% this week and Apple (AAPL) has climbed 7%.

That’s because the AI trade has, up to now, been driven by the suppliers of the “picks and shovels” of artificial intelligence: semiconductors, networking equipment, and electricity. But DeepSeek’s success suggests AI’s picks and shovels may not need to be as plentiful or as fancy as investors once thought. That could be a boon to AI buyers, like software companies, who pay cloud service providers and AI companies for access to foundational models and computing power. 

Read the full article here.

–Colin Laidley

CrowdStrike Leads Rally in Cybersecurity Stocks

17 hr 37 min ago

Shares of CrowdStrike Holdings (CRWD) jumped Tuesday as it and other cybersecurity companies were boosted by news of a cyberattack on Chinese artificial intelligence startup DeepSeek. 

DeepSeek, which torpedoed technology stocks Monday as investors digested its claim that its AI assistant runs on less-advanced chips and at a lower cost than those of U.S. rivals like OpenAI, temporarily restricted new registrations Tuesday following “large-scale malicious attacks” on its services.

The attacks may have lifted investor enthusiasm for the cybersecurity sector, with CrowdStrike shares gaining 9.4% to become the top-performing Nasdaq Composite stock. CloudFlare (NET) shares jumped 11%, while Zscaler (ZS) gained 7%, CyberArk (CYBR) rose 4.5%, and Palo Alto Networks (PANW) added nearly 2%.

Elsewhere, CrowdStrike’s Falcon cybersecurity platform achieved a perfect score in a real-world ransomware test, the company said Tuesday. The platform “stopped all known and unknown threats with no false positives,” earning a top rating from cybersecurity software testing firm SE Labs. 

Analysts at JMP Securities maintained a “market outperform” rating on CrowdStrike, with a price target of $400 in a note Tuesday. That’s below the company’s recent level just below an record intraday high of $410. Visible Alpha’s mean price target is around $395.

The firm called CrowdStrike and rival Palo Alto Networks “strong contenders to capitalize on the securing of AI infrastructure and data.”

–Andrew Kessel

Despite Tough Start to Week, Stocks Back Near Record Highs

17 hr 48 min ago

U.S. equities took a bruising to kick off the week, but with today’s gains the major indexes are all near record highs and on pace to post gains for the month.

The Dow is just 0.4% away from an all-time closing high, while the S&P 500 is 1% below its record close set last Thursday. The Nasdaq Composite is 2.2% away from its record closing high.

With three trading days remaining, the Dow is up 5.4% so far in January, while the S&P 500 and Nasdaq have gained 3.2% and 2.2%, respectively.

Some Wary About AI Stocks Despite Recovery

18 hr 12 min ago

Investors piled back into Nvidia (NVDA) and other U.S. artificial intelligence stocks Tuesday, driving a rebound from Monday’s DeepSeek-driven sell-off.

The dramatic nature of Monday’s market reaction, however, had some on Wall Street tempering their expectations for how high some of those affected stocks would eventually rebound.

Analysts at Bernstein, Citi, Wedbush, Raymond James and elsewhere were among those suggesting that Monday’s market reaction could be overblown, offering an opportunity to buy the dip. 

But there was also some wariness out there.

“Investors may want to consider trimming their tech exposure, given the still-lofty valuations and potential uncertainties ahead,” said ProShares Global Investment Strategist Simeon Hyman.

Morgan Stanley analysts told clients in a note Tuesday that while they “remain positive” on AI semiconductor stocks broadly, “the stock market reaction is probably more important than the cause, and could bring further export controls or reduce spending enthusiasm.”

The analysts added that while they don’t expect those worries to drive major changes in spending behavior for most companies in the AI space, investors could react to coming spending announcements with less support than they did last week, when Meta Platforms (META) unveiled plans to spend up to $65 billion to support its AI ambitions, and President Donald Trump announced a $500 billion project to build AI infrastructure in the U.S.

–Kara Greenberg

What to Expect from the Fed on Wednesday

18 hr 59 min ago

The Federal Reserve is widely expected to hold its key interest rate steady Wednesday as officials wait for more data that indicates inflation is cooling.

Financial markets are pricing in near certainty that the Fed will keep the fed funds rate at a range of 4.25% to 4.50% when the Fed’s policy committee meets Wednesday, according to the CME Group’s FedWatch tool. The tool forecasts rate movements based on fed funds futures trading data.

It would be the first Fed meeting since September in which the central bank has declined to cut interest rates.

Economists and market participants will be paying close attention to the wording of the Fed statement that follows the meeting tomorrow afternoon, as well as remarks from Chair Jerome Powell, who is scheduled to meet with journalists.

Read the full meeting preview here.

–Diccon Hyatt

RTX, Lockheed Head in Opposite Directions After Earnings

20 hr 27 min ago

Shares of RTX (RTX) and Lockheed Martin (LMT) headed in opposite directions Tuesday after the two big defense contractors reported quarterly results.

RTX shares were up 2.5% in recent trading after hitting a record high this morning as the maker of Pratt & Whitney engines posted fourth-quarter adjusted earnings per share (EPS) of $1.54, with revenue up 9% year-over-year to $21.62 billion. Both were above analysts’ forecasts compiled by Visible Alpha.

Sales at the Pratt & Whitney division jumped 18% to $7.57 billion, rose 6% to $7.54 billion at Collins Aerospace, and gained 4% to $7.16 billion at Raytheon.

RTX sees full-year adjusted EPS of $6.00 to $6.15, and adjusted sales of $83 billion to $84 billion.

Lockheed Martin shares sank more than 8% as the company missed sales estimates and issued weaker-than-expected profit guidance as it took a big charge in the quarter.

Adjusted EPS came in at $7.67, but that excluded an after-tax loss of $5.45 per share for classified programs. Revenue fell 1.3% to $18.62 billion. Analysts surveyed by Visible Alpha expected $18.86 billion.

The loss for existing classified programs at its Aeronautics and Missiles and Fire Control business segments came after a review that determined the company would have higher costs in order to meet required milestones.

Lockheed Martin expects full-year EPS in the range of $27.00 to $27.30. The Visible Alpha forecast was for $27.44.

–Bill McColl

JetBlue Stock Sinks on Weak Forecast

21 hr 58 min ago

Shares of JetBlue (JBLU) plunged more than 25% Tuesday after the airline’s downbeat outlook for the first quarter and upcoming fiscal year overshadowed a better fourth quarter than analysts had expected.

The airline reported a $44 million, or 13 cents per share, net loss for the fourth quarter, on $2.27 billion in revenue. Analysts had expected a larger net loss of $114.86 million, or 33 cents per share, on a similar $2.25 billion in revenue, according to estimates compiled by Visible Alpha.

For the first quarter of 2025, JetBlue expects its available seat miles (ASM) to decline 2% to 5% year-over-year, with revenue per ASM projected to range from a 0.5% decline to a 3.5% gain, while analysts had expected the metric to rise 5% year-over-year. JetBlue said it also expects cost per ASM to rise 8% to 10% in the first quarter.

The airline also expects cost per ASM to rise 5% to 7% for the full fiscal year, with revenue per ASM projected to rise 3% to 6% compared to the metric staying flat in 2024.

“While this year will not come without its challenges, our strategy is in place to tackle those obstacles head-on,” JetBlue CEO Joanna Geraghty said, noting that the airline’s “healthy revenue backdrop” and cost control put it on track to “deliver on our goal of achieving a positive operating margin for the full year.”

JetBlue shares have endured a volatile ride over the past year. Despite Tuesday’s sharp drop, the stock is still up 7% over the past 12 months.

–Aaron McDade

Royal Caribbean Stock Jumps to All-Time High

23 hr 17 min ago

Royal Caribbean Group (RCL) led S&P 500 gainers Tuesday morning, with shares rising more than 12%, after the cruise ship operator posted better-than-expected profit and gave strong guidance, boosted by price hikes and purchases by passengers on its ships.

The carrier reported fourth-quarter earnings per share (EPS) of $2.02, while analysts surveyed by Visible Alpha were looking for $1.50. Revenue increased 13% year-over-year to $3.76 billion, basically in line with forecasts.

Royal Caribbean said it benefited from “higher pricing across all key products and better onboard revenue.” It added that close-in demand “remained strong on both a rate and volume basis.” In addition, the company noted that bookings have accelerated since the last earnings call, “resulting in the best five booking weeks in the company’s history.”

CFO Naftali Holtz explained that Royal Caribbean’s focus on “moderate capacity growth, moderate yield growth, and strong cost discipline—is expected to deliver 23% adjusted earnings growth in 2025.”

The company also announced that it would begin taking bookings this year on its new river cruises, which are set to start on 10 new ships in 2027.

Royal Caribbean shares were at an all-time high this morning and have more than doubled over the past 12 months.

–Bill McColl

Boeing Shares Soar After Earnings Report

23 hr 53 min ago

Boeing (BA) shares surged more than 6% Tuesday morning after the plane maker reported a fourth-quarter net loss in line with its recently issued preliminary results, closing out a difficult year that saw it burn through billions amid safety investigations and a strike.

The company said it lost $3.86 billion, or $5.46 per share, on revenue that fell 31% year-over-year to $15.24 billion, essentially matching its preliminary results. Boeing also reported operating cash flow of negative $3.45 billion after saying it expected to report negative $3.5 billion.

Tuesday’s results were Boeing’s first since a nearly two-month strike by its union machinists was resolved in November, with the company looking to ramp up production and deliveries this year after they declined sharply in 2024.

In addition to the strike, Boeing’s difficult year included investigations from regulators, including after a midair detachment of a door plug on an Alaska Airlines (ALK) flight last January.

Despite Tuesday’s gain, Boeing shares are still down about 10% over the past 12 months.

–Aaron McDade

Nvidia Price Levels to Watch After Monday Plunge

January 28, 2025 10:02 AM EST

Nvidia (NVDA) shares rose in early trading after plunging Monday amid concerns that a powerful, cost-efficient AI model developed by Chinese startup DeepSeek could herald a reduction in big tech’s investment in the chipmaker’s pricey AI offerings.

Nvidia shares fell 17% on Monday, breaking down below a seven-month rising wedge and finishing below the closely watched 200-day moving average (MA), potentially setting the stage for follow-through selling. Nvidia shed nearly $600 billion in market capitalization yesterday.

Importantly, Monday’s selloff occurred on the highest daily trading volume since May, indicating significant portfolio rebalancing by larger market participants.

Investors should watch crucial support levels on Nvidia’s chart around $102, $96, and $76, while also monitoring a key overhead area near $130.

The stock was up slightly at around $119 in early trading.

Read the full technical analysis piece here.

–Timothy Smith

Major Stock Index Futures Mixed

January 28, 2025 08:23 AM EST

Futures tied to the Dow Jones Industrial Average

S&P 500 futures were up 0.2%.

Nasdaq 100 futures were also up 0.2%.