The Week's Top Stories is a guided tour through the biggest market stories of the week, from winning stocks to brutal dips to the facts and forecasts generating buzz on Wall Street.
RATE HIKE WORRIES
The Federal Reserve Open Market Committee is meeting next week, and that means many investors are wondering whether the central bank will hit markets with another rate hike. The Fed took a break from tightening at its last meeting on the heels of multiple reports showing a slowdown in inflation, but Fed Chair Jerome Powell noted that at least one more rate hike was on the horizon. Whether that happens next Wednesday or later this year is the question haunting markets going into the weekend.
TESLA CRASH
Shares of Tesla crashed more than 9 percent for the week after CEO Elon Musk disclosed that production is set to slow down this quarter due to "global factory upgrades." He said the target for the year is still 1.8 million vehicle deliveries, but could see a lull in the third quarter. The company also announced that it's recalling 16,000 of its Model S and Model X vehicles from 2021-2023. The recall is related to an issue with the first-row seat belt.
GAMING MERGER
The Federal Trade Commission is backing down from an appeal to a recent ruling giving Microsoft the go-ahead to complete its acquisition of Activision Blizzard. The two companies recently announced an extension of the deadline for finishing the merger to October 18, giving them more leeway to secure government approval. They can continue to negotiate with other countries' regulatory authorities, including the United Kingdom's Competition and Markets Authority.
BANKING PROFITS
Bank of America earlier this week reported a 19 percent jump in net income from a year ago, while revenue shot up 11 percent. CEO Brian Moynihan said the strong earnings were the result of a "healthy U.S. economy" and a "resilient job market." The results also indicate that the bank's size and diversity has helped it avoid the headwinds facing smaller regional banks, and that its still able to make money on loans even as it pays out more for deposits due to higher interest rates.
Updated Tesla stock drop after close of markets Friday.
Chipmaker Nvidia is poised to release a quarterly report that could provide a better sense of whether the stock market has been riding an overhyped artificial intelligence bubble or is being propelled by a technological boom that’s still gathering momentum.
Cracker Barrel said late Tuesday it’s returning to its old logo after critics — including President Donald Trump — protested the company’s plan to modernize.
Low-value imports are losing their duty-free status in the U.S. this week as part of President Donald Trump's agenda for making the nation less dependent on foreign goods. A widely used customs exemption for international shipments worth $800 or less is set to end starting on Friday. Trump already ended the “de minimis” rule for inexpensive items sent from China and Hong Kong, but having to pay import taxes on small parcels from everywhere else likely will be a big change for some small businesses and online shoppers. Purchases that previously entered the U.S. without needing to clear customs will be subject to the origin country’s tariff rate, which can range from 10% to 50%.
Southwest Airlines will soon require plus-size travelers to pay for an extra seat in advance if they can't fit within the armrests of one seat. This change is part of several updates the airline is making. The new rule starts on Jan. 27, the same day Southwest begins assigning seats. Currently, plus-size passengers can pay for an extra seat in advance and later get a refund, or request a free extra seat at the airport. Under the new policy, refunds are still possible but not guaranteed. Southwest said in a statement it is updating policies to prepare for assigned seating next year.
Cracker Barrel is sticking with its new logo. For now. But the chain is also apologizing to fans who were angered when the change was announced last week.
Elon Musk on Monday targeted Apple and OpenAI in an antitrust lawsuit alleging that the iPhone maker and the ChatGPT maker are teaming up to thwart competition in artificial intelligence.
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