Today’s Market Wrap Up and a Glimpse Into Friday

Stocks rallied on the heels of improving labor market data that suggests the economy is making progress on the road to recovery. The S&P 500 and Dow Jones Industrial Average both closed at fresh record highs, while the tech-heavy Nasdaq also posted gains.

Corporate America has been fueling optimism in the stock market amid a trend of better-than-expected quarterly results. The looming delta variant threatens to derail that momentum, but for the time being, investors are able to see the glass half full.

The other threat is inflation further rearing its head in the economy, but these worries are beginning to fade based on the pace at which prices are rising.  The latest CPI data suggests that the worst may be over for now.

Stocks to Watch

• Airbnb shares are tumbling nearly 5% in after-hours trading on the heels of the company’s latest quarterly report. Airbnb was able to narrow its loss YoY, and revenue skyrocketed almost 300% to USD 1.3 billion, surpassing Wall Street estimates. Nonetheless, the threat of the delta variant is clouding the forecast due to the possibility of governments once again shutting down travel.
• DoorDash shares were also under pressure in extended-hours trading. The food-delivery company experienced an 83% jump in revenue to USD 1.2 billion. DoorDash, however, is facing rising costs after expanding its footprint and improving its service to keep pace with demand. Those investments are expected to persist for the rest of the year.
• Disney is a winner in the after-hours session. Shares are rallying more than 5% after the company demonstrated that it is doing something right. Disney is benefiting from robust demand for its streaming content, where it is winning more subscribers as it goes head-to-head with the likes of Netflix. Even Disney’s theme parks are on the road to recovery as consumers flocked back to the parks as the economy has reopened.

Look Ahead

The University of Michigan Consumer Sentiment’s preliminary data for the month of August will be released on Friday. Wells Fargo economists say the results will reveal how investors are coping with signs of inflation and another wave of COVID cases. Wells Fargo economists have lowered their GDP estimates for the rest of this year as well as for 2022 out of caution due to the threat of the delta variant.