Financial Stocks Rise on Wednesday; Coffee Prices Hit All-Time High
The financial sector is poised to rally to new highs, according to Wolfe Research, despite being overbought. Analyst Rob Ginsberg noted that while a breather is likely, the setup remains strong for the sector to break out to new highs. He also highlighted Prudential Financial as an attractive stock to buy, with its next earnings report due on Tuesday.
The SPDR S&P Financial Sector Fund (XLF) rose on Wednesday, with the financial sector leading the gains. The sector’s leaders included T-Mobile, up 8%, and Fox, up 1.4%, which reached a new all-time high.
Coffee Prices Hit All-Time High
Coffee futures touched a record $3.649 per pound on Tuesday, with traders focused on the extent to which Brazil’s crop will be able to recover from last year’s dry weather. India, the world’s seventh-largest coffee grower, is likely to see a drop in coffee exports of over 10% in 2025 due to lower production and reduced carry-forward stocks from last season’s crop.
Communications Services ETF on Pace for 8th Straight Positive Session
The SPDR S&P Communications Services Fund (XLC) was up 0.5% on Wednesday morning and pacing for its eighth straight day of gains. The ETF is leading the others this year, gaining 6.4% year to date. XLC hit its highest level since December 12, 2024, and is now trading less than 1% from its all-time high.
Stocks Open Little Changed Ahead of January FOMC Meeting
Some stocks are making big moves in premarket trading, including F5, which surged nearly 14% after beating revenue expectations and offering stronger-than-expected earnings guidance. Nextracker also rose over 24% after beating revenue expectations and offering stronger-than-expected earnings guidance. ASML, a Dutch semiconductor giant, rose 5% after its fourth-quarter net bookings jumped 169% from the prior quarter.
Piper Sandler Expects SMID-Cap Stocks to Offer Most Compelling Opportunities
Piper Sandler expects another positive year for the stock market, with its chief market technician Craig Johnson reiterating his S&P 500 year-end price objective of 6,600. He believes the bull market still has more room to run in 2025, with SMID-cap stocks offering the most compelling opportunities.
Steve Cohen Says Stock Market May Top Out Over the Next Few Months
Point72’s Steve Cohen believes the bull market could see a tougher ride in the second half of 2025 as President Donald Trump’s aggressive trade and immigration policies may slow down economic growth. He expects the markets to top out over the next couple of months and the second half to be a little tougher.
Stifel Downgrades Datadog, Projecting Slower Growth from OpenAI Contract
Stifel downgraded Datadog to hold from buy, projecting slower growth from its relationship with OpenAI. Analyst Brad Reback wrote that the company could see slowing revenue growth and shrinking operating margins in 2025, partly due to its relationship with ChatGPT parent OpenAI.
Alibaba Shares Rise on New AI Model
Alibaba shares rose 3% in the premarket after the release of a new version of its artificial intelligence model Qwen, which the company said surpasses DeepSeek.
Nvidia Shares Dip After Big Gains in Previous Session
Nvidia shares dipped 0.7% after rallying to recover some of the steep losses suffered on Monday. The chipmaker’s week-to-date performance is down more than 9% after the DeepSeek-sparked sell-off.
Japan and Aussie Stocks Rise as Wall Street Stages a Sharp Recovery
Japan and Australian stocks rose on Wednesday as Wall Street rebounded overnight, while several Asia-Pacific markets were closed for the Lunar New Year holiday.