Stocks were mixed on Friday as a disappointing outlook from Intel (NASDAQ: INTC) stalled the broad-based rally following easing geopolitical tensions earlier in the week.
The Dow Jones Industrial Average (NYSE: DIA) dropped nearly 300 points to settle at 49,098.71, underperforming the broader market. The S&P 500 Index (NYSE: SPY) ended the session above the flatline to close at 6,915.61, while the tech-heavy Nasdaq Composite (NASDAQ: QQQ) rose about 0.3% to end the day at 23,501.24.
In the spotlight, Intel shares plunged about 17% on Friday after the semiconductor maker offered soft forward guidance despite its fourth-quarter earnings beat. The company expects first-quarter revenue between $11.7 billion and $12.7 billion, and for adjusted earnings per share to breakeven.
"Our conviction in the essential role of CPUs in the AI era continues to grow," CEO Lip-Bu Tan said in a statement. "Our priorities are clear: sharpen execution, reinvigorate engineering excellence, and fully capitalize on the vast opportunity AI presents across all of our businesses."
In economic news, consumer sentiment rose in January as near-term inflation expectations decreased, the University of Michigan reported Friday. The month's headline index rose 6.6% from December to 56.4; the index is still more than 20% below its reading from January 2025. Consumers' one-year outlook also declined by 0.2 percentage point month-to-month to 4%, while the five-year outlook ticked 0.1 percentage point higher to 3.3%.
"While the overall improvement was small, it was broad based, seen across the income distribution, educational attainment, older and younger consumers, and Republicans and Democrats alike," said Joanne Hsu, director of the Surveys of Consumers, in a statement. "However, national sentiment remains more than 20% below a year ago, as consumers continue to report pressures on their purchasing power stemming from high prices and the prospect of weakening labor markets."
Elsewhere, Goldman Sachs upgraded Spotify (NYSE: SPOT) ahead of the company's earnings report next month to a rating of Buy from Neutral. Analyst Eric Sheridan, however, lowered high price target on the audio streaming giant by $35 to $7000, which still implies more than 40% upside from the stock's Thursday close.
"In our opinion, we see SPOT as well-positioned to capitalize on/benefit from rising generative AI adoption given it is a) leading global position amongst distribution platforms; b) offering across media types; c) relationships with both large music labels and independent artists/content creators; & d) structural data advantage and existing scaled products to facilitate AI/ML-driven discovery/curation," Sheridan said in a Thursday note to clients.
Looking ahead, earnings reports are expected to dominate headlines next week, with notable reports including Microsoft (NASDAQ: MSFT), Meta Platforms (NASDAQ: META), Tesla (NASDAQ: TSLA), Apple (NASDAQ: AAPL), Visa (NYSE: V), Mastercard (NYSE: MA), Exxon Mobil (NYSE: XOM), Chevron (NYSE: CVX), UnitedHealth Group (NYSE: UNH), Boeing (NYSE: BA), General Motors (NYSE: GM) and UPS (NYSE: UPS) set to release throughout the week.
Starbucks (NASDAQ: SBUX) may offer market participants some positive long-term targets at the coffee chain's investor day on Thursday, according to Deutsche Bank analyst Lauren Silberman. The company is also set to deliver quarterly earnings on Wednesday.
"We think next week could be a positive catalyst as SBUX provides much needed visibility to the path back to historical margins and drivers of sustainably, solidly positive SSS [same-store sales], which could support meaningful upside to current estimates (and sentiment)," Silberman said in a note late Thursday.