Thursday's big stock stories: What’s likely to move the market in the next trading session

The Communication Services sector led market gains, rising 3.75% Wednesday to extend its 21% year-to-date outperformance, while the Energy sector declined over 2% amidst OPEC+ supply considerations and geopolitical tensions. Salesforce shares dropped more than 5% after hours on weak guidance despite a $20 billion buyback, and Constellation Brands also fell 3% after cutting its outlook and hitting a 52-week low. Investors are now focused on Broadcom's upcoming earnings report on Thursday.

Analysis

A significant divergence is evident across S&P sectors, with Communication Services surging while Energy falters. The Communication Services sector climbed 3.75% to a new high, solidifying its position as the top performer year-to-date with a 21% gain, propelled by strong returns from names like Paramount (+44%), Netflix (+38%), and TKO (+31%). Conversely, the Energy sector fell over 2% as markets anticipate a potential supply increase from the upcoming OPEC+ meeting and react to geopolitical tensions involving OPEC member Venezuela; the sector is now 9% below its November high. Company-specific news is also driving volatility. Salesforce (CRM) shares declined over 5% in after-hours trading due to weak forward guidance, which overshadowed the announcement of a substantial $20 billion share buyback and pushed its year-to-date loss to 27%. Similarly, Constellation Brands (STZ) cut its guidance, causing shares to fall 3% to a 52-week low and extending its year-to-date decline to nearly 34%. Investor focus now shifts to upcoming catalysts, including Broadcom's (AVGO) earnings report, which follows a 30% year-to-date rally that has outpaced the VanEck Semiconductor ETF (SMH).

Key Decisions for Investors

• Investors should treat Salesforce's weak guidance as a primary signal, as the negative after-hours reaction indicates the $20 billion buyback may not be sufficient to offset concerns over its growth trajectory.
• Monitor the clear sector rotation, as capital flows into Communication Services leaders while the Energy sector faces significant headwinds from falling crude prices and the pending OPEC+ supply decision.
• Be cautious with consumer-facing companies like Constellation Brands, where guidance cuts and new 52-week lows may signal deteriorating fundamentals or broader consumer weakness.
• Pay close attention to Broadcom's post-earnings price action, as its 30% year-to-date outperformance sets a high bar for results and could lead to volatility.