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U.S. Stocks Move Mostly Lower As Early Buying Interest Evaporates

iHub News
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May 23 2024 4:44PM

Stocks moved mostly higher at the start of trading on Thursday but failed to sustain the initial upward move and came under pressure over the course of the session. The major averages pulled back well off their highs of the session and into negative territory.

After reaching record intraday highs, the Nasdaq fell 65.51 points or 0.4 percent to 16,736.03 and the S&P 500 (SPI:SP500) slid 39.17 points or 0.7 percent to 5,267.84. The narrower Dow showed a more significant move to the downside, tumbling 605.78 points or 1.5 percent to 39,065.26.

The initial strength on Wall Street came as tech stocks rallied following upbeat quarterly results from chipmaker Nvidia (NASDAQ:NVDA).

Shares of Nvidia (NASDAQ:NVDA) surged after the AI darling reported better than expected fiscal first quarter results and provided upbeat guidance.

Nvidia also announced a ten-for-one stock split of its common stock and increased its quarterly cash dividend by 150 percent to $0.10 per share.

Buying interest waned shortly after the start of trading, however, as concerns about the outlook for interest rates continue to hang over the broader markets following Wednesday’s slightly hawkish Fed minutes.

With the minutes signaling rates are likely to remain higher for longer than previously expected, the chances rates will be lower by September have fallen to 55.4 percent, according to CME Group’s FedWatch Tool.

Potentially adding to the rate concerns, the Labor Department released a report showing first-time claims for U.S. unemployment benefits fell by more than expected in the week ended May 18th.

The Labor Department said initial jobless claims slid to 215,000, a decrease of 8,000 from the previous week’s revised level of 223,000.

Economists had expected jobless claims to edge down to 220,000 from the 222,000 originally reported for the previous week.

Sector News

Networking stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Networking Index down by 2.4 percent.

Significant weakness was also visible among interest rate-sensitive utilities and commercial real estate stocks, with the Dow Jones Utility Average and the Dow Jones U.S. Real Estate Index both tumbling by 2.2 percent.

Gold stocks also saw considerable weakness amid an extended pullback by the price of the precious metal, resulting in a 2.2 percent slump by the NYSE Arca Gold Bugs Index.

Airline, banking and biotechnology stocks also came under pressure over the course of the session, moving lower along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index jumped by 1.3 percent, while China’s Shanghai Composite Index tumbled by 1.3 percent.

The major European markets also finished the day mixed after seeing early strength. While the U.K.’s FTSE 100 Index fell by 0.4 percent, the German DAX Index and the French CAC 40 Index both inched up by 0.1 percent.

In the bond market, treasuries moved notably lower, extending a recent downward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.1 basis points to 4.475 percent.

Looking Ahead

Trading on Friday may be impacted by reaction to a report on durable goods orders as well as a revised reading on consumer sentiment.