In today's trading session, the US benchmark equity indexes faced downward pressure as investors evaluated the latest corporate earnings alongside critical macroeconomic data. Market participants are especially attentive to the upcoming earnings announcements from tech giants Apple and Amazon, which may set the tone for future trading activity. During midday trading on Thursday, the Nasdaq Composite experienced a 2.4% decline, sitting at 17,174.4.
Similarly, both the S&P 500 and the Dow Jones Industrial Average saw declines of 1.6%, with current standing at 5,433.3 and 40,202.8 respectively. Within the various sectors, technology emerged as the weakest performer, while utilities showed resilience, leading the gainers. In individual stock news, shares of Moderna faced a dramatic fall of 21%, marking the largest drop on both the S&P 500 and Nasdaq indices.
This decline occurred despite the biotechnology firm's announcement of better-than-expected second-quarter financial results. However, a reduced full-year product sales guidance for its respiratory products, attributed to intensified competition within the US market and sluggish demand from the European Union, caused concern among investors. Qualcomm shares also faced headwinds, down 10% following the company’s release of positive fiscal third-quarter results, driven by robust growth in its automotive sales.
Nonetheless, the firm cautioned that it anticipates a revenue impact stemming from the US government’s recent decision to rescind its export license to Huawei Technologies, a leading Chinese telecommunications firm. On a brighter note, C.H. Robinson Worldwide saw its shares soar by 13%, positioning it as the top gainer on the S&P 500 after announcing second-quarter adjusted earnings that surpassed analysts' projections. Meanwhile, Meta Platforms, the parent company of Facebook, reported strong results which saw its stock jump 4.1%.
The company’s financial performance exceeded consensus expectations, bolstered by unexpectedly high advertising revenues. Market participants are keenly awaiting Thursday’s after-hours earnings results from Apple and Amazon, crucial players that are likely to influence market sentiment moving forward. Additionally, bond markets reacted to economic data.
The US 10-year Treasury yield fell by 12.5 basis points to 3.98%, while the two-year yield dropped 15.9 basis points, landing at 4.18% intraday. Economic reports released by the Institute for Supply Management indicated that activity within the US manufacturing sector contracted during July, further corroborated by S&P Global's report showing a decline in the manufacturing purchasing managers' index, which fell from 51.6 in June to 49.6 in July.
This dip signifies the first time in seven months that the index has dipped below the neutral benchmark of 50. Job market dynamics exhibited a concerning trend, with weekly applications for unemployment insurance surpassing expectations and reaching the highest point in nearly a year, according to government data.
Additionally, recent reporting from Challenger, Gray & Christmas revealed a job cut total of 25,885 for the previous month, a significant reduction from June's figures but still reflecting a 9% year-over-year increase. The Bureau of Labor Statistics is set to release employment data on Friday, which is anticipated to show an addition of 175,000 nonfarm jobs in July, a decrease compared to June’s addition of 206,000 jobs. On the commodities front, West Texas Intermediate crude oil saw a decrease of 1.5%, trading at $76.76 a barrel. In monetary policy news, the Federal Reserve’s monetary policy committee opted to maintain the benchmark lending rate between 5.25% and 5.50%, marking the eighth consecutive meeting without a rate increase.
Fed Chair Jerome Powell suggested that a rate cut in September is a possibility, although any decision will hinge on forthcoming economic data. Stifel analysts noted that the July FOMC statement did not guarantee a rate cut in September, falling short of the market's anticipations for a proactive approach to policy easing. Precious metals saw varied performance; gold prices rose by 0.4% to $2,482.10 per troy ounce, while silver prices slipped by 1.8%, trading at $28.41 per ounce. Overall, the markets continue to navigate a complex landscape influenced by earnings reports and evolving economic indicators..