What’s News in Markets: Tech Winners and Losers, Fed Fallout, Taco Bell Rebound

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Hey, listeners. It's Saturday, August 1st. I'm Shradha Dinesh for the Wall Street Journal. And this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it.

It was another turbulent week. Markets were whipsawed by concerns over AI, the war with Iran, expectations for the Federal Reserve, and more. But today, I want to focus on three things. Tech, the Fed, and food.

Starting with the Fed, Treasury yields rose after two Fed officials explained why they voted to raise interest rates this week. In response, investors increased their bets on a rate hike in the near term, and yields climbed across maturities, both short and long term.

As for stocks, the Dow, Nasdaq, and S&P 500 all finished week strong, ultimately adding more than 1%.

Next up, Tech. How did tech stocks do this week? Well, it depends where you look. Let's round up some superlatives, both good and bad. How about the biggest one-day gain in market cap for any US business ever? That one is Microsoft, which added $450 billion to its value on Thursday. Its earnings report helped ease investors' concerns that Microsoft's big spending on data centers, chips and more would outpace its ability to generate cash. Meanwhile, investors are punishing Meta's stock over those same concerns. By Thursday, it had notched 11 straight daily declines, its longest losing streak on record. That same dynamic of one winner, one loser played out on Friday between Amazon and Apple.

Shares of Amazon soared about 15 percent after the company reported better sales trends in its cloud computing business. It was Amazon's biggest market cap gain ever. But Apple lost more than $350 billion in market cap. Its biggest one-day market cap decline on record, and the third largest of any US company. When all was said and done, Microsoft and Amazon ended the week up 22 and 17 percent, respectively, and Meta and Apple lost about six and seven percent.

If it feels like a lot of restaurants have been going public, you're not wrong. There have been 18 US IPOs of restaurants since 2017, according to Deal Logic. That includes big names like Sweetgreen, Cava, and Krispy Kreme. The latest on that list, Jersey Mike's. The Sandwich Shop debuted on Thursday with a valuation of nearly eight billion dollars, and shares promptly fell six percent. Now, IPOs are usually expected to pop, but Jersey Mike's is hardly alone and seeing the opposite happen. The hedge fund Pershing Square, the nuclear fuel company Standard Nuclear, and the biotech firm Generate Biomedicines all had even steeper first day drops earlier this year. What's more, Jersey Mike shares bounced back on Friday, rising about six percent. Meanwhile, there's another big restaurant that's been in the news lately and not for good reasons. Taco Bell is working to bring back customers after a parasitic outbreak of sales linked to the lettuce served at its restaurants. Maybe you heard about it? The company is now rolling out one dollar deals and new food options to try and recover from slumping sales. Last week, shares of Taco Bell's parent Yum Brands were coming off their worst seven day stretch since 2020, having fallen about 10 percent. But this week, Yum Brands rose about three percent. For both Yum and Jersey Mike's, it seems like a case of investors coming back for seconds.

Okay, I know I said tech, the Fed and food, but let's throw in some music too. If you listen to Taylor Swift, Lady Gaga or Bad Bunny, that's Universal Music Group behind them. It's the world's largest music company. But on Friday, a disappointing earnings report sent shares of Universal plummeting 25 percent, their steepest decline since the company went public five years ago. After booming during the pandemic, streaming services haven't been growing as fast in recent years, and Universal's been hoping for a rebound in revenue. But that's failed to materialize, and the company's stock is down more than 40 percent over the past 12 months.

Now you know What's News in Markets this week. You can read about more stocks that moved on the week's news in our live markets coverage on wsj.com. Today's show was produced by Alexis Moore with Deputy Editor Chris Zinsley. I'm Shradha Dinesh. Have a great weekend and see you next Saturday.