In a surprising turn of events, stocks surged on Friday, despite Federal Reserve Chairman Jerome Powell’s acknowledgment that inflation, although having plummeted in recent months, is yet to reach an acceptable level. This unexpected rise in the market was driven by a myriad of factors, from Affirm’s revenue beating analysts’ estimates to Hibbett’s better-than-expected second-quarter earnings, painting a complex picture of the current economic landscape.

Affirm, the buy-now-pay-later company, saw a 30% rise in its stock after posting a narrower-than-expected loss and a revenue of $446 million in its fiscal fourth quarter, surpassing analysts’ predictions. Meanwhile, Marvell Technology reported second-quarter adjusted earnings that outperformed analysts’ forecasts, yet its outlook for the third quarter, which was in line with estimates, disappointed investors, leading to a 7.5% drop in shares. These contrasting performances illustrate the volatile nature of the market amid economic uncertainties.

Friday’s Stock Market: Winners, Losers, and Surprises

Rising Stocks Despite Inflation Concerns

In his recent speech, Federal Reserve Chairman Jerome Powell expressed that while inflation has been on a decline in the past few months, it is yet to reach an acceptable level. Despite this concern, stocks were on the rise last Friday. Let’s take a closer look at the companies that made significant moves.

Affirm, Hibbett, and Workday in the Lead

Affirm (AFRM) saw a robust 30% growth after its fiscal fourth-quarter revenue of $446 million exceeded analysts’ expectations, posting a narrower than anticipated loss. The buy-now-pay-later company’s Gross Merchandise Volume (GMV) for the period was $5.5 billion, with an anticipated GMV of $5.3 billion to $5.5 billion in the first quarter.

Sporting goods company Hibbett (HIBB) also experienced a rise, with shares increasing by 22% following better-than-expected second-quarter earnings. Similarly, enterprise HR and financial software provider Workday (WDAY) posted higher than expected second-quarter adjusted earnings and a 16% jump in revenue to $1.79 billion, surpassing expectations and leading to a 4.4% stock gain.

Marvell, Domo, and AMC Experience a Dip

However, not all companies enjoyed an upward trend. Marvell Technology (MRVL), reported second-quarter adjusted earnings that beat forecasts but disappointed investors with a third-quarter outlook that was in line with estimates, resulting in a 7.5% drop in shares.

Similarly, shares of cloud company Domo (DOMO) plummeted by 41% to $10.05 after it slashed its fiscal-year guidance, leading to TD Cowen analysts downgrading the stock from Outperform to Market Perform and reducing their price target from $20 to $14.

Movie-theater chain AMC Entertainment (AMC) also experienced a downturn, with stocks down by 10% following a 27% drop in the previous session. The company converted its preferred equity units to common stock last Friday, following a 10-for-1 reverse stock split before trading opening on Thursday.

Mixed Results for Retailers

In the retail sector, upscale department-store chain Nordstrom (JWN) reported second-quarter earnings that beat forecasts, reaffirming its forecasts for the fiscal year despite a drop in revenue to $3.77 billion from $4.09 billion a year earlier. However, this did not prevent shares from falling by 9.5%.

Apparel retailer Gap (GPS) also reported a sales decline in the second quarter of 8% to $3.55 billion, while its adjusted profit in the quarter of 34 cents a share beat forecasts. Despite predicting that third-quarter sales could decrease in the low double-digit range, the stock rose by 5.6%.

Takeaways

The stock market is a complex entity, with individual companies experiencing significant ups and downs even on a seemingly positive day. The key is to keep a close eye on the market trends, company earnings, and economic indicators like inflation. As we have seen with Affirm, Hibbett, and Workday, companies that exceed analysts’ expectations can see substantial gains, while those delivering in-line or disappointing results, like Marvell, Domo, and AMC, may suffer. Retailers like Nordstrom and Gap remind us that even within the same sector, results can vary greatly.