Stocks Tick Higher After Key Inflation Data; Netflix To Buy Warner Bros. in $83B Deal

Stocks Have Rebounded Ahead of the Fed Meeting—But the Market’s Leaders Are Changing

12 minutes ago

The stock market may not be roaring into the most wonderful time of the year, but it is chugging along. Its next big test, however, is right around the corner.

Investors’ attention has for days largely been fixed on Wednesday’s rate decision from the Federal Reserve. Rising optimism that the Fed will cut at its last meeting of 2025—based on futures market data, it’s viewed as a near-certainty—has helped the major indexes recover most of the ground they lost during the volatile first three weeks of November; the major U.S. indexes are within a few percentage points of fresh records as this week draws to a close.

A lot changed below the surface last month. The Magnificent Seven group of tech heavyweights— Nvidia (NVDA), Apple (AAPL), Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META) and Tesla (TSLA)—nearly entered a technical correction as investors debated whether big tech was spending too much on artificial intelligence. On Nov. 20, a blowout earnings report from Nvidia failed to put AI bubble fears to rest, and the Roundhill Magnificent Seven ETF (MAGS) closed the day 9% below its record high. 

This year’s least-loved sectors, meanwhile, including healthcare and energy, became leaders. More than 60% of stocks in the S&P 500 outperformed the index last month, compared with just 33% since the start of the year, suggesting “a change of leadership heading into 2026,” according to Bank of America analysts. Eight of the S&P 500’s 11 sectors outperformed the broader index, they wrote, while tech lagged.

The Dow Jones Transportation Average, an index that tracks the stocks of companies that move goods and people around the country, rose for a ninth consecutive day on Thursday. According to Dow Theory, that’s a bullish sign for stocks if observed alongside a rising Dow Jones Industrial Average. (The Dow slipped on Thursday, but is up more than 4% over the past nine sessions.)

Fed officials are divided on how to proceed. Some policymakers fear that cutting rates too aggressively will stoke inflation, which has run above the Fed’s 2% target for more than four years and reaccelerated in recent months. Others fear that leaving rates unchanged will harm the weakening job market, potentially tipping the U.S. economy into recession.

Wall Street generally expects the Fed will prioritize employment over inflation next week, moving to bring rates lower. Investors see an 87% chance the Fed cuts interest rates, according to federal funds futures trading data. Just two weeks ago, that figure was 30%.

Investors Bid SoFi Stock Up All Year. Why Are They Backing Off Now?

1 hr 10 min ago

SoFi’s been on a winning streak. Today’s it’s taking a breather.

Shares of SoFi Technologies (SOFI), a fintech-turned-bank, are taking a hit after a $1.5 billion share sale announcement on Thursday caught investors and analysts off guard. The most recent capital raise was its second in six months. Still, its stock remains aloft, nearly doubling so far this year.

The company has been riding high on its achievements over the last two years, with seven of its last eight quarterly reports beating analyst earnings expectations, according to Visible Alpha. And the company plans to invest in its existing businesses, relaunch crypto trading, and expand its product offerings—good reasons to have cash on hand.

SoFi’s second capital raise in two quarters wasn’t widely expected. Keefe, Bruyette & Woods analyst Tim Switzer said in a recent note that he was “a little surprised” since the latest share sale followed another of the same amount in July. That said, the firm’s capital levels are low compared to bank peers, according to Switzer.

“We believe the raise is largely opportunistic given the stock is near all-time highs,” Switzer wrote yesterday.

The company sold shares at $27.50 apiece, just a touch below their November all-time high of around $32. Visible Alpha’s Street consensus target is just under $26, perhaps an indication that the company managed a good price—though the Street’s outlook on the shares, based on ratings, is broadly neutral. The stock was recently down about 7%, trading right near the recent sale price.

SoFi started out as a fintech company primarily offering student loan refinancing, but has since transformed into a full-service bank offering bank accounts, personal loans and investment products. It also relaunched a crypto trading platform last month after pausing that service in 2023 as it was securing its national bank charter. SoFi plans to launch its own branded stablecoin next year, according to the company.

“There’s more happening at SoFi today than at any other time in my eight years with the company,” SoFi’s chief Anthony Soto said in its third-quarter earnings call late October.

–Crystal Kim

Ulta Beauty Stock Soars to Record on Boosted Outlook

2 hr 4 min ago

Ulta Beauty (ULTA) shares surged to a record high on Friday after the cosmetics and fragrance retailer posted earnings that topped analysts’ estimates and raised its outlook.

The stock was up over 14% in recent trading, on track to finish the week at an all-time high and leading gains in the S&P 500.

Ulta Beauty reported third-quarter earnings per share of $5.14 on revenue that jumped 12.9% year-over-year to $2.86 billion. Both figures exceeded analysts’ expectations as the beauty retailer said its growth strategy and purchase of British luxury cosmetics seller Space NK were paying off.

Comparable store sales climbed 6.3%, boosted by a 3.8% rise in average ticket and a 2.4% increase in transactions. The company said its revenue gain was primarily driven by those higher comparable sales, the acquisition of Space NK, and the addition of new stores.

“Exciting assortment newness, improved in-store and digital experiences, and bold marketing efforts are resonating with our guests,” said Ulta CEO Kecia Steelman.

Ulta and Victoria’s Secret (VSCO), which also reported better-than-expected earnings Friday, may be benefiting from the so-called “lipstick effect,” which describes the consumer’s tendency to maintain spending on smaller indulgences like cosmetics and lingerie even when broader economic conditions are uncertain.

Ulta Beauty now sees full-year EPS of $25.20 to $25.50, and sales of about $12.3 billion. Previously, it anticipated EPS in the range of $23.85 to $24.30, and sales of $12 billion to $12.1 billion.

With Friday’s gains, shares of Ulta Beauty have added nearly 40% of their value in 2025.

–Bill McColl

What To Expect at Next Week’s Fed Meeting

2 hr 57 min ago

The Federal Reserve is widely expected to cut its key interest rate next week to give a boost to the faltering job market, despite concerns that lower borrowing costs could stoke inflation.

As of Friday, financial markets were pricing in an 87% chance the central bank would cut its key interest rate by a quarter-point to a range of 3.5% to 3.75%, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data. It would be the third rate cut in as many meetings.

The 12 members of the central bank’s policy committee have been sharply divided over whether to cut rates to encourage spending and stabilize the faltering job market, or to keep them higher for longer to fight inflation that is still well above the Fed’s target of a 2% annual rate.

Recent data on the labor market has shown a hiring slowdown, giving the upper hand to those advocating for rate cuts. The Fed has a dual mandate from Congress to maintain price stability while preventing unemployment from rising excessively.

Economic policies implemented by the administration of President Donald Trump have put pressure on both sides of the dual mandate, creating a dilemma for the Fed about which to prioritize. Tariffs have pushed up consumer prices, fueling concerns about inflation, while also stoking uncertainty among business leaders, discouraging expansion and hiring. His immigration crackdown has also contributed to a reduction in hiring.

In public speeches last month, Fed officials generally fell into two camps: one that thought inflation was the greater risk, and another that was more confident tariffs represented a one-time price hike rather than a source of inflation, which, by definition, is a sustained increase in prices.

Fed officials have kept silent on monetary policy since last week due to the Fed’s customary pre-meeting communication blackout. However, before that, the balance seemed to tilt in favor of cutting rates.

A belated inflation report Friday showed some consumer prices rose less than expected in September, further improving the odds of a rate cut.

–Diccon Hyatt

Victoria’s Secret Stock Pops on Better-than-Expected Results

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Victoria’s Secret (VSCO) shares jumped on Friday after the lingerie retailer posted better-than-expected results and boosted its guidance as it cut back on promotions and raised prices.

The company reported a third-quarter loss of $0.46 per share, $0.13 lower than forecasts from Visible Alpha. Revenue increased 9.2% to $1.47 billion, also better than expected. Comparable store sales were up 5%. When including direct-to-consumer sales, they gained 8%.

Sales in North America increased 5.4% to $778 million, and direct-to-consumer sales rose 4.3% to $428.5 million. International sales jumped 33.5% to $264.8 million. 

CFO Scott Sekella said adjusted gross margin grew 170 basis points, “driven by a reduced promotional approach and higher regular-priced selling, while leveraging the strength of our business model.” Victoria’s Secret remains “focused on managing costs while prioritizing investments in product innovation, brand strength, and customer experience,” he said.

The company raised its outlook for full-year adjusted EPS to between $2.40 and $2.65, and revenue to $6.45 billion to $6.48 billion. Previously, it anticipated adjusted EPS of $1.80 to $2.20, and revenue of $6.33 billion to $6.41 billion.

Shares of Victoria’s Secret were up nearly 13% in recent trading, putting the stock’s year-to-date return at 13%.

–Bill McColl

What Trading After the Netflix-Warner Bros. Deal Tells Us

4 hr 55 min ago

One of the most closely watched bidding wars of the year is over—maybe.

Netflix (NFLX) on Friday agreed to buy the movie studio and streaming service of competitor Warner Bros. Discovery (WBD) in a deal valued at nearly $83 billion. The deal is expected to close after Warner Bros. Discovery spins off its cable division as a separate company in the third quarter of next year. When complete, Warner Bros. shareholders will receive $27.75 per share.

Netflix shares opened sharply lower on Friday morning before paring their losses to trade down less than 1%. The shares of an acquiring company often fall on news of a deal, because the acquirer usually pays a premium.

Shares of Warner Bros. Discovery climbed nearly 3%, but remained about $2 below the acquiring price, indicating investors see some risk the deal won’t go through. The White House and federal regulators have reportedly expressed opposition to the deal on the grounds it could make Netflix too dominant in streaming. 

Shares of Paramount Skydance (PSKY), Netflix’s top competition in the bidding war, were down 5% Friday morning. The company, formed earlier this year by the merger of Skydance Media and Paramount Global, on Thursday accused Warner Bros. Discovery of conducting an unfair bidding process. Paramount Skydance’s close ties to the White House—the company is run by the son of Larry Ellison, the tech mogul and prominent ally of President Donald Trump—could give it a shot at blocking the Netflix deal.

NBC parent company Comcast (CMCSA) also bid on Warner Bros., but was not seen as a serious contender in recent days. Its shares were up nearly 3% in recent trading.

Beyond the main parties, shares of AMC Entertainment (AMC) were down about 2% Friday. As part of the deal, Netflix promised to continue giving Warner Bros. films theatrical releases. Though investors in America’s largest movie theater chain may be concerned Netflix’s streaming-first DNA will inevitably change Warner Bros.’s theatrical strategy. Shares of Cinemark Holdings (CNK) were down 5% Friday. 

Netflix Wins Bidding War for Warner Bros. Discovery $83 Billion Deal

5 hr 58 min ago

The bidding war for Warner Bros. Discovery (WBD) is officially over, as the entertainment giant and Netflix (NFLX) announced an $83 billion deal Friday.

Warner Bros. Discovery plans to continue with its previously planned break-up, which will involve spinning off its cable TV channels, including CNN and TBS, into a standalone business, leaving the remaining studios that make TV and movies and the company’s streaming services to be acquired by Netflix for $27.75 per share. The companies expect the deal to close in the third quarter of next year.

Netflix co-CEO Ted Sarandos said Friday that combining with Warner Bros. Discovery will help both companies “define the next century of storytelling.”

Warner Bros. Discovery shares were little changed in premarket trading Friday, while Netflix shares fell 3.5% following the announcement.

Late Thursday night, reports emerged that Netflix and Warner Bros. Discovery had entered exclusive deal talks, with competing bidders Paramount Skydance (PSKY) and Comcast (CMCSA) looking to be out of the running.

The bidding war started earlier this year, when Paramount started to make offers to acquire all of Warner Bros. Discovery after the company completed its own merger with Skydance, owned by the Ellison family. Netflix and Comcast entered the running later.

Now, the deal could face regulatory scrutiny over whether it would make Netflix too dominant a player in streaming. Paramount has reportedly argued that the industry would become too consolidated by Netflix’s win.

–Aaron McDade

Stock Futures Tick Up Ahead of Inflation Data

7 hr 3 min ago

Futures contracts connected to the Dow Jones Industrial Average were up 0.1% in early trading.

S&P 500 futures were 0.2% higher.

Nasdaq 100 futures gained 0.3%.