The Week's Top Stories is a guided tour through the biggest market stories of the week, from winning stocks to brutal dips to the facts and forecasts generating buzz on Wall Street.
Wall Street had a lot to process this week. As expected, the Federal Reserve raised its benchmark interest rate by 25 basis points rather than 50 or 75 points, which markets liked. At the same time, Fed Chair Powell said more rate hikes were coming, which markets didn't like. For a minute there, it looked like the bulls might win the day. Then the latest federal jobs numbers showed the U.S. economy in January adding an extraordinary 517,000 jobs, more than double most estimates. While the report was good news for workers and the economy overall, investors saw it as more evidence that the Fed would in the short-term keep clobbering the economy with rate hikes.
META'S MEGA RALLY
The tech sector likewise had a weird week. Meta's stock was up around 23 percent on Thursday following an earnings report that showed earnings beating expectations. On top of that, a federal judge rejected a request from the Federal Trade Commission to halt its purchase of a virtual reality startup, putting some wind behind Meta's effort's to monetize the metaverse. The move helped spark a rally in tech stocks, which remain in bad shape from a brutal 2022. The bullish sentiment didn't last long, however, as other tech companies were about to report.
Those tech companies happened to be some big names themselves. Apple, Amazon, and Google parent Alphabet all reported after the bell on Thursday, and it didn't paint a pretty picture. Shares of Alphabet were down around 3 percent after it reported a sizable drop in net income and plans to slow down hiring. Amazon's stock fell nearly 8 percent after the company reported its first ever unprofitable year since 2014 and its slowest ever quarter of growth. Apple, meanwhile, was actually up slightly on Friday, despite a 5 percent drop in sales from the same period last year.
News that Buzzfeet planned to use AI chatbot ChatGPT for content sent its stock soaring last week, along with news that Meta planned to pay the media company millions to help get more creator content on Facebook and Instagram. This week, shares of Buzzfeed are down around 42 percent. What caused the shift? Well, one of its biggest investors pulled back on its commitment. Comcast disclosed that it sold 5,726,385 shares of Buzzfeed, of which it owned about 20 percent.
COINBASE GETS A BREAK
Shares of Coinbase, one of the last standing crypto exchanges, were up nearly 30 percent this week after a federal judge tossed out a class action lawsuit against its custody practices. The legal reprieve comes as other former rivals Gemini and crypto lender Genesis Trading undergo a crackdown from the Securities and Exchange Commission.