Stock market mixed as tech rebounds, Airbnb soars, DraftKings plummets

The Nasdaq Composite increased by 1.1%, reaching 24,579, marking a 3.3% weekly decrease. The S&P 500 rose 0.3% but ended the week down 2.6%, while the Dow Jones Industrial Average declined 0.5% for the day and 0.9% for the week.

Thursday’s market decline was fueled by concerns regarding potential obstacles to data center development stemming from legislative actions in Washington, D.C., and states like Texas and Ohio.

Several technology stocks that experienced substantial losses on Thursday rebounded Friday. Micron Technology (MU) gained 5.1%, and Nvidia (NVDA), a key player in the artificial intelligence sector, rose 2.8%.

However, reports indicating Microsoft’s (MSFT) plans to reduce its reliance on neocloud infrastructure, which supports AI workloads, tempered the optimism within the tech sector. CoreWeave (CRWV), a prominent neocloud provider, is scheduled to release its earnings next week, with analysts anticipating a larger per-share loss than the previous year, despite expected strong revenue growth.

Outside the technology sector, Airbnb (ABNB) experienced a significant surge of 11.7% after reporting third-quarter earnings of $3.16 per share, exceeding both analyst expectations and the prior year’s results by 43%. Revenue also surpassed estimates, increasing 19% to $4.9 billion, the largest top-line growth in three years.

UBS Global Research analyst Stephen Ju highlighted Airbnb’s performance as a “standout” among online travel agents, noting the company’s rapid pace of innovation. Ju maintained a Neutral rating but raised the price target to $191 from $181.

Conversely, DraftKings (DKNG) plummeted 21.3%, its steepest decline since November 2022, following a third-quarter earnings miss and a lowered full-year forecast. The company attributed the revised outlook to investments in prediction markets impacting profitability. BofA Securities analyst Julie Hoover stated that investors were disappointed by the magnitude of these investments, especially considering regulatory risks. Hoover reiterated a Buy rating, citing prediction markets as a potential source of future gains.

In economic news, the Bureau of Labor Statistics reported that the U.S. added 165,000 jobs in October, significantly exceeding the anticipated 59,000. The unemployment rate decreased to 4.1% from 4.2%. Bill Adams, chief U.S. economist at Fifth Third Commercial Bank, attributed the strong job growth to factors including the impact of artificial intelligence on certain white-collar roles.

Traders are currently pricing in a 77% probability of a Federal Reserve interest rate hike in December, up from 71% a week ago, according to CME Group FedWatch. This expectation is contingent on the release of the October Consumer Price Index (CPI) report next Tuesday.