Markets Update, January 24, 2025: Chipmakers’ Decline Ends Four-Day Stock Rally; Weekly Gains Recorded by Major Indexes

Stocks experienced a decline on Friday, halting the recent rally that had propelled major indexes to new highs.

The S&P 500 finished the day 0.3% lower after reaching a fresh record earlier, while both the Dow Jones Industrial Average and the Nasdaq Composite, known for its tech focus, decreased by 0.3% and 0.5% respectively. Despite this setback, all three indexes had seen a four-day winning streak before Friday’s session and managed to secure weekly gains for the second week in a row.

Sentiment Driven by Positive Outlook

Sentiment throughout the week was boosted by optimism surrounding strong corporate earnings reports, advancements in AI-related development, and the pro-business initiatives implemented by the new Trump administration.

Tech Stocks Lead Friday Downturn

On Friday, a downturn was led by technology stocks following Texas Instruments’ issuance of discouraging guidance late Thursday, causing shares of analog chip manufacturers, including Texas Instruments, Microchip Technology, and Analog Devices, to plummet sharply.

Mega-Cap Technology Stocks Mixed

Mega-cap technology stocks, crucial in driving the recent market surge, displayed a mixed performance on Friday. Nvidia, the AI chipmaker, saw a 3.1% decline, emerging as the top decliner in the Dow. Apple, Microsoft, Amazon, and Tesla also experienced losses. In contrast, Alphabet, Meta Platforms, and Broadcom each recorded gains exceeding 1%.

Stocks React to Quarterly Results

Three major companies listed in the Dow Jones Industrial Average attracted attention today following the release of their quarterly results. American Express (AXP) experienced a 1.4% decline after the financial services firm reported earnings that were mostly in line with analysts’ forecasts. Boeing (BA) also saw a 1.4% drop after the aircraft manufacturer unveiled preliminary numbers that fell short of expectations. On the other hand, Verizon Communications (VZ) surged by almost 1% following a positive earnings report that exceeded expectations.

Novo Nordisk Stock Jumps on Positive Obesity Treatment Trial

Novo Nordisk’s shares surged by 8.3% following the announcement of favorable results from a trial for its amycretin obesity treatment. This development propelled the pharmaceutical giant’s stock in the market.

Twilio Stock Skyrockets on Strong AI Demand Outlook

Twilio, a software maker, experienced a remarkable 20% increase in its stock value after unveiling optimistic forecasts for future growth, particularly driven by the surging demand for artificial intelligence (AI) technologies.

Bitcoin Price Rises to $105,000 Amid Investor Optimism

Bitcoin’s price reached $105,000 during late-afternoon trading, marking a significant increase from its previous low of $103,000. This surge is attributed to a 50% gain post the presidential election, as investors anticipate favorable policies for the crypto market under the Trump administration. President Trump’s recent executive order established a working group aimed at shaping regulations and policies regarding cryptocurrencies and digital assets.

The Finance Avenue: Market Updates

The Finance Avenue reported that the yield on the 10-year Treasury, which is an indicator of interest rate expectations, had decreased to 4.62% from 4.64% on Thursday.

Furthermore, Gold futures saw a 0.5% increase, reaching around $2,780 per ounce, while WTI crude oil futures remained relatively stable.

Investors Getting Ready for an Eventful Week

The week ahead is filled with significant market events that could impact investors.

The Finance Avenue highlights that the Federal Reserve’s upcoming two-day policy meeting, commencing on Tuesday, will be a focal point. While no interest rate cuts are anticipated, investors are eager to analyze the post-meeting statement from the policy-setting FOMC and statements from Chair Jerome Powell. The Fed, having reduced the key rate by one percentage point since September, has indicated a potential slowdown in rate cuts this year.

Furthermore, important economic data releases are scheduled for later in the week. On Thursday morning, a report on fourth-quarter gross domestic product (GDP) will be published, followed by the release of the Fed’s favored inflation measure, the Personal Consumption Expenditures (PCE) index, on Friday. Investors closely monitor economic data for any insights that could impact the Fed’s rate decisions.

Next Week’s Earnings Outlook

Next week is set to be one of the busiest in terms of earnings announcements for the quarter. The Finance Avenue reports that Microsoft (MSFT), Meta Platforms (META), and Tesla (TSLA) are all scheduled to report their quarterly results after the market closes on Wednesday. Additionally, Apple (AAPL) is expected to release its earnings late Thursday. Investors can also anticipate quarterly results from AT&T (T), General Motors (GM), Intel (INTC), Caterpillar (CAT), Visa (V), and ExxonMobil (XOM).

Investors Monitoring Trump’s Policy Announcements

Investors are keeping a close eye on Washington D.C. as President Donald Trump unveils policy initiatives that will have an impact on businesses, markets, and the overall economy.

Key Stock Indexes Show Growth for Second Consecutive Week

Even with a decline on Friday, The Finance Avenue reports that the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all closed the week with significant gains.

The Dow saw a 2.2% increase during the shortened trading week due to the Martin Luther King Jr. Day holiday closure, while the S&P 500 and Nasdaq showed gains of 1.7% each.

TradingView

This marks the second week in a row where major indexes have experienced substantial growth, following their best performances since the presidential election. This turnaround comes after two weeks of consecutive losses for these indexes.

TradingView

As January comes to a close, major averages are set to record gains for the third consecutive month. The Dow has increased by 4.4% in January, with the S&P 500 and Nasdaq showing rises of 3.7% and 3.3%, respectively.

Oklo’s Stock Surges 100% on AI Optimism

Oklo (OKLO) saw a remarkable 100% increase in its shares this month, reaching a new all-time high. This surge is driven by investor optimism in nuclear energy companies due to the anticipated rise in energy demand for supporting artificial intelligence infrastructure.

The recent spike in investor interest followed the announcement of a $500 billion AI infrastructure development project. This initiative, a collaboration among Oracle (ORCL), OpenAI, and SoftBank, is particularly promising for Oklo. With the support of OpenAI CEO Sam Altman, Oklo could potentially secure energy contracts to power data centers established as part of this project.

Oklo Shares Surge by 10% to $42.50 Amid Overall Growth

Oklo shares experienced a 10% increase, reaching $42.50 during afternoon trading on Friday, showcasing a notable surge. Since the beginning of 2025, the stock price has doubled, reflecting a significant upward trend.

Technical Analysis Indicates Strong Performance

After surpassing a crucial resistance level in mid-October, Oklo shares entered a period of consolidation within a falling wedge pattern for several months. However, the stock broke out above this pattern towards the end of December. Subsequently, Oklo’s share price has continued to rise sharply, with recent trading sessions witnessing heightened gains due to increased institutional buying activity.

Relative Strength Index (RSI) Signals Overbought Territory

While The Finance Avenue states that the relative strength index (RSI) confirms the stock’s strong price momentum, the indicator has entered overbought territory. This suggests a potential for short-term profit taking.

What to Anticipate from Next Week’s Federal Reserve Meeting

The Finance Avenue

It would come as a significant surprise to financial markets if The Federal Reserve were to do anything other than maintain its interest rate at the current level during the Fed’s policy committee meeting on Wednesday.

The Federal Reserve’s efforts to control inflation are now in a state of pause. Following three consecutive rate cuts since September, the central bank is now pausing to wait for inflation to decrease further before considering another interest rate cut.

Due to persistent inflation and a robust labor market, the Federal Reserve is currently adopting a “wait and see” approach.

Twilio Surges with Positive Forecast Amid High Demand for AI

Twilio (TWLO) witnessed a significant surge in its shares on Friday following a robust outlook provided by the cloud communications software company due to the increasing demand for its AI solutions.

During an investor event on Thursday, Twilio announced its anticipation of achieving double-digit growth, with a projected 11% increase in fourth-quarter revenue compared to the previous year, surpassing analysts’ expectations from Visible Alpha. The company is set to disclose its complete results for the fourth quarter after the market closes on Feb. 13.

The favorable forecast was attributed to the rising adoption of Twilio’s services by numerous AI companies, with more than 9,000 firms expected to rely on them by 2024.

Twilio’s Financial Goals

Twilio has announced its aim to achieve GAAP operating profitability in fiscal 2025 and beyond. The company also plans to generate $3 billion or more in free cash flow (FCF) from 2025 through 2027, with a projected non-GAAP operating margin of 21% to 22% in 2027.

Investor Returns

Twilio intends to distribute fifty percent of its annual FCF to investors through 2027. The company expects income from operations and FCF in 2025 to fall within the range of $825 million to $850 million.

Market Performance

Twilio’s shares have surged by over 22% in recent trading sessions and have nearly doubled in value over the past year.

EA Stock Price Levels to Monitor Following Recent Decline

Electronic Arts (EA) shares experienced another drop on Friday, following a significant sell-off the day before. This decline occurred after the video game publisher revised its full-year bookings outlook, citing decreased demand for its sports games, notably its soccer franchise.

EA Stock Price Levels to Watch After 17% Plunge

Since reaching a record high in mid-November, EA shares have experienced a significant pullback, with the stock dropping below a long-term uptrend line during a 17% decline last Thursday. This move was accompanied by the highest weekly trading volume since January 2023, indicating strong selling pressure.

Support and Resistance Levels

Investors should pay attention to critical support levels on EA’s weekly chart, specifically around $110, $100, and $87, while also keeping an eye on a significant overhead resistance area near $144.

The stock was trading at $115.50, down 2.6%, during midday trading on Friday.

Novo Nordisk Surges on Positive Weight-Loss Drug Trial Outcomes

Novo Nordisk’s (NVO) stock saw a significant increase on Friday following the release of promising data on its amycretin weight-loss medication.

During the Phase 1b/2a clinical trial, participants experienced weight loss across various maintenance dosages compared to those on a placebo, starting from an average baseline weight of 92.7 kg (202.8 pounds). Notably, individuals taking the highest dose of 20mg lost 22% of their body weight after 36 weeks, while the placebo group gained 2%.

Moreover, individuals on a 1.25mg dose for 20 weeks saw a weight reduction of 9.7%, while those on placebo gained 1.9%. Similarly, participants on a 5mg dose for 28 weeks experienced a 16.2% reduction in body weight, whereas the placebo group had a 2.3% increase.

Expressing optimism, Novo Nordisk’s executive vice president for development, Martin Lange, stated that the company is pleased with the findings and intends to proceed with further clinical trials involving amycretin for adults with overweight or obesity.

Novo Nordisk Shares Fall After Disappointing Weight Loss Drug Trial Results

U.S.-listed shares of Novo Nordisk, a major player in the weight-loss drug market, have been on a downward trend since September, along with competitors Eli Lilly. The stock took a significant hit of 18% in a single day last month following disappointing trial results for its weight-loss drug, CagriSema.

Recent Developments

In recent trading, Novo Nordisk’s U.S. shares saw an 8% increase, helping to narrow the overall loss to 17% over the past 12 months.

Boeing’s Preliminary Q4 Earnings Impacted by Strike

Boeing released early Friday its preliminary fourth-quarter results, revealing a larger loss than anticipated by analysts.

According to The Finance Avenue, Boeing is projecting a fourth-quarter loss of $5.46 per share, significantly exceeding the Visible Alpha consensus of $1.40 per share. The company also anticipates revenue of $15.2 billion, falling short of analysts’ $16.3 billion prediction.

Boeing attributed its disappointing results to the two-month machinists’ strike that disrupted production, along with expenses associated with its defense division and layoffs.

“Although we face near-term challenges, we took important steps to stabilize our business during the quarter including reaching an agreement with our IAM-represented teammates and conducting a successful capital raise to improve our balance sheet,” said Boeing Chief Executive Officer (CEO) Kelly Ortberg, who took the reins at the embattled company in August.

Shares of Boeing, which reported having $26.3 billion in “cash and investments in marketable securities” at the end of the fourth quarter, saw a 1% increase in recent trading after initially dropping more than 2% in the opening minutes of the session. The stock has experienced a decline of approximately 16% over the past 12 months.