1. Economy contracted for second straight quarter
The U.S. economy contracted by 0.9 percent in the second quarter, after shrinking at an annual rate of 1.6 percent in the first quarter, the Bureau of Economic Analysis said Thursday. Two consecutive quarters of contraction technically meet the unofficial definition of a recession, but it's up to the nonprofit, non-partisan National Bureau of Economic Research to determine whether the economy has fallen into a recession. The eight economists on the NBER committee that makes the call consider many factors, and the White House said the economy remained too strong to fit the label after posting record job growth and foreign business investment. "That doesn't sound like a recession to me," President Biden said.
2. Amazon reports better-than-expected sales
Amazon shares jumped more than 12 percent in after-hours trading Thursday after the online retail giant reported better-than-expected quarterly sales and strong, continuing growth from Amazon Web Services. Amazon posted a $2 billion quarterly loss on sales of $121.2 billion, capping the company's first back-to-back quarterly losses since 2014. "Despite continued inflationary pressures in fuel, energy, and transportation costs, we're making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfillment network," Chief Executive Andy Jassy said. "We're also seeing revenue accelerate."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
3. House passes $280 billion bill to boost domestic chip production
The House on Thursday passed legislation intended to bolster domestic semiconductor manufacturing and "invest billions in science and technology innovation," with the goal of boosting the United States' competitiveness with China, The Washington Post reported. The $280 billion bill, known as the Chips and Science Act, passed in a bipartisan, 243-187 vote, after clearing the Senate 64-33 a day earlier. It now heads to President Biden's desk for his signature. The Chips Act is "exactly what we need to be doing to grow our economy right now," Biden said in a statement after the vote, according to CNBC. "I look forward to signing this bill into law."
4. Apple reports lower profit but growing iPhone sales
Apple on Thursday reported an 11 percent drop in quarterly profit but said iPhone sales were continuing to grow. The results were better than expected, given supply constraints caused by factory shutdowns in China to fight the country's coronavirus surge. Apple was the latest tech giant reporting lower profits but encouraging investors with strong quarterly reports despite economic uncertainty. "We are seeing some pockets of softness here and there," Apple CEO Tim Cook told The Wall Street Journal on Thursday. "But in the aggregate, we expect revenue to accelerate in the September quarter as compared to the June year over year performance." Apple shares gained 3 percent in after-hours trading.
5. Stock futures rise, on track for weekly gains
U.S. stock futures rose early Friday as Wall Street remained on track for a positive week with a boost from strong earnings reports from tech giants. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.3 percent and 0.7 percent, respectively, at 6:30 a.m. ET. Futures for the tech-heavy Nasdaq were up 1.1 percent. All three of the main U.S. indexes gained just over 1 percent on Thursday. Better-than-expected quarterly reports from Amazon and Apple gave the market a boost overnight. The Dow is up nearly 2 percent so far this week. The S&P 500 and the Nasdaq are up 2.8 percent. The S&P 500 is on track for its best month since 2020.
Create an account with the same email registered to your subscription to unlock access.