Economic Headwinds Weigh on Stocks While Late-Day Corporate Earnings Deliver Mixed Signals

Thursday Recap: Markets Struggle Amid Data Disappointment

Stock indexes opened weak this Thursday after November’s Producer Price Index (PPI) came in hotter than expected and Weekly Jobless Claims surged ahead of the market open. Despite hovering near record highs, the major indices took a meaningful step back—a natural pullback given the less-than-impressive economic readings. All eyes now shift to next week’s Federal Open Market Committee (FOMC) decision, where the widely anticipated 25 basis-point rate cut (bringing rates to 4.25-4.50%) is essentially locked in. The real market mover will be the Fed Chair Powell’s commentary and the tone of the accompanying statement—these clues will be crucial for mapping out the next leg of the market’s trajectory.

Index Performance Across the Board

The Dow Jones shed 234 points, ending the day -0.53%, and is now nursing losses of nearly -5% over the past five trading sessions. The S&P 500 mirrored weakness with a -0.54% daily decline, while the tech-heavy Nasdaq gave back 0.66% after hitting a fresh closing peak on Wednesday. Small caps weren’t spared—the Russell 2000 tumbled -1.38%, putting it down -2% for the week.

Earnings Season Delivers: Discount Retailers and Semiconductors in Focus

Costco’s Commanding Performance

Costco Wholesale Corporation COST posted robust first-quarter results that comfortably cleared the bar on both earnings and revenue. The warehouse giant delivered earnings per share of $4.04 against a consensus estimate of $3.79, while revenue reached $62.15 billion—besting the $62.05 billion expectation. A meaningful driver was the membership fee stream, which jumped $1.17 billion following the company’s first price increase in seven years. Stock futures moved higher on the news, capping a stellar year where shares have already appreciated +50% year to date. The consistency is noteworthy: Costco hasn’t missed earnings in two full years, consistently outperforming by a modest +2% clip.

Broadcom Rides the Semiconductor and AI Wave

Broadcom Inc. AVGO turned in fiscal Q4 results that beat bottom-line expectations, posting earnings of $1.42 per share versus the anticipated $1.39. Revenue of $14.05 billion came virtually in line with guidance despite a technical miss versus the $14.06 billion consensus. The headline, however, was semiconductor revenues hitting an all-time high of $30.1 billion, fueled by explosive AI-related business growth of +220% year over year. Late trading showed shares climbing +4%, reflecting investor enthusiasm for the company’s AI momentum.

RH Report Shows Strength in Forward Guidance

The RH RH quarterly report brought mixed near-term results but bullish future signaling. The home furnishings retailer posted Q3 earnings per share of $2.48, falling short of the $2.67 consensus, though revenues of $812 million exceeded the $810.9 million estimate. The real catalyst: management’s guidance for the current quarter telegraph +18-20% revenue expansion—a substantial acceleration that sent shares rocketing +17% in after-hours trading. Year to date, RH has already delivered +33% in gains, signaling investor confidence in the company’s turnaround narrative.

What’s Next for Markets

The confluence of economic uncertainty, upcoming Fed decisions, and solid corporate earnings sets the stage for volatile trading into year-end. Investors will be parsing both the data flow and earnings quality closely as the calendar turns toward 2025.