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Key Takeaways
- The S&P 500 fell 0.3% on Wednesday, May 1, 2024, as the Federal Reserve held interest rates steady and Chair Jerome Powell discounted the likelihood of an imminent rate hike.
- CVS shares plunged after the pharmacy giant missed estimates and cut guidance amid higher health care costs and Medicare reimbursement pressures.
- Bio-Techne shares soared as the biotech firm posted better-than-expected results, lifted by strength in the diagnostics and genomics segment.
Major U.S. equities indexes were mixed as the Federal Open Market Committee (FOMC) wrapped up its latest policy meeting, announcing it would maintain the federal funds rate at the decades-long high where it has remained since last July.
The central bank noted “a lack of further progress” toward its annual goal of 2% inflation, reiterating it will need to see more signs that inflation has sustainably declined before lowering interest rates. However, in his press conference following the rate announcement, Fed Chair Jerome Powell said it is unlikely that the next policy decision will be a rate hike .
Stock indexes rallied in the afternoon as Powell made his comments but succumbed to downward pressure in the final hour to end the day mixed. Both the S&P 500 and the Nasdaq ended with daily losses of 0.3%, while the Dow held on to a gain of 0.2%.
CVS Falls On Higher Health Care Costs
CVS Health ( CVS ) shares posted the S&P 500’s steepest losses on Wednesday, plunging 16.8% after the pharmacy giant’s first-quarter revenue and earnings per share (EPS) missed analysts’ estimates . The company also trimmed its full-year earnings guidance, citing higher health care costs and pressures related to Medicare reimbursement rate cuts.
Starbucks Stock Down on Lower Same-Store Sales
Shares of Starbucks ( SBUX ) plummeted 15.9% after the coffee chain posted lower-than-expected fiscal second-quarter revenue and earnings . Starbucks reported an unanticipated drop in same-store sales for its U.S. and international business, noting customers have tightened their spending amid an uncertain economic outlook.
Semiconductor Manufacturer Fell on Lowered Guidance
Wireless semiconductor manufacturer Skyworks Solutions ( SWKS ) reported quarterly results that were mostly in line with estimates, but revenue guidance for the current quarter came in below expectations, and its shares sank 15.3%. The subdued forecast reflects demand headwinds in the mobile business and ongoing inventory adjustments.
Gene Therapy Pushes Bio-Techne Higher
Bio-Techne ( TECH ) shares notched the S&P 500’s top daily performance, skyrocketing 16.2% after the biotechnology firm topped sales and profit estimates for its fiscal third quarter of 2024. The company benefited from a strong performance in its diagnostics and genomics segment, driven by demand for its cell and gene therapy workflow solutions.
Garmin Stock Soars on SmartWatches and Wearables
Shares of Garmin ( GRMN ) jumped 13.1% after the fitness and navigation device manufacturer posted better-than-expected first-quarter sales and EPS. Fitness was Garmin’s top product category, with high demand for advanced wearable devices and the launch of a new smartwatch series.
Amcor Up on Progress With Structural Shifts
Amcor ( AMCR ), which provides packaging for food and pharmaceutical products, also saw its share price move higher in the wake of its earnings report, adding 9.6% on Wednesday. Although quarterly revenue fell short of consensus estimates, EPS exceeded forecasts as Amcor made progress on structural cost initiatives.