On Thursday, the U.S. equity markets faced a downward trend as investors scrutinized recent corporate earnings alongside macroeconomic indicators. The Nasdaq Composite dipped significantly, closing at 17,194.2, marking a decrease of 2.3%. Similarly, the S&P 500 fell by 1.4%, finishing the day at 5,446.7, while the Dow Jones Industrial Average experienced a drop of 1.2%, concluding at 40,348.
As sectors reacted to the earnings reports, technology stocks witnessed the most pronounced declines, with utilities being the primary sector benefitting from the market turmoil. In the latest company-specific news, Moderna, represented by its ticker symbol $MRNA, faced a significant drop in share price, plunging by 21%.
This marked the steepest decline observed on both the S&P 500 and the Nasdaq. Despite reporting better-than-expected results for the second quarter, the pharmaceutical company lowered its full-year product sales guidance for its respiratory division, attributing this to intensifying competition in the U.S.
market coupled with a weak demand in the European Union. Qualcomm ($QCOM) also emerged as one of the laggards, shedding 9.4% in share value. After reporting stronger-than-anticipated fiscal third-quarter results driven by robust automotive sales growth, Qualcomm cautioned investors regarding a revenue impact stemming from the U.S.
government’s revocation of its export license for products to Huawei Technologies in China. On a more positive note, shares of C.H. Robinson Worldwide ($CHRW) soared nearly 15%, making it the top gainer on the S&P 500 after announcing adjusted earnings that exceeded Wall Street's forecasts for the second quarter.
Meta Platforms ($META), the parent company of Facebook, followed suit as the second-best performer on the Nasdaq, with shares rising by 4.8%. The company reported second-quarter earnings and revenue that outperformed market expectations, bolstered by strong advertising revenue. In the broader economic landscape, U.S.
Treasury yields showed considerable movement. The two-year yield dropped 18.6 basis points to 4.15%, while the ten-year yield decreased by 13.3 basis points, settling at 3.97% on the day. Furthermore, economic data indicated a troubling sign for the manufacturing sector, which experienced deepening contraction in July compared to the previous month, as reported by the Institute for Supply Management.
Additionally, data from S&P Global ($SPGI) confirmed that overall manufacturing activity turned negative during the same period. On the labor front, weekly applications for unemployment insurance in the United States saw an unexpected increase, reaching the highest figures observed in nearly a year, signaling potential labor market instability.
Employers in the U.S. cut 25,885 jobs last month according to Challenger, Gray & Christmas, marking a decrease of 47% from June but a rise of 9% from a year earlier. Looking ahead, data from the Bureau of Labor Statistics is anticipated to report an addition of 175,000 nonfarm jobs in July, a decrease from the prior month's gain of 206,000.
Oil prices also shifted, with West Texas Intermediate crude settling at $76.96 a barrel after a decline of 1.2%. On the monetary policy front, the Federal Reserve maintained its benchmark lending rate in a range from 5.25% to 5.50%, marking the eighth consecutive pause. Chair Jerome Powell hinted at a potential September rate cut, though he emphasized that any decisions would remain heavily contingent on forthcoming economic data.
The Federal Open Market Committee’s recent statement failed to provide solid assurance regarding a rate cut in September, falling short of market anticipations for a clear commitment to easing policy within the next 48 days, according to insights from Stifel in a note to clients on Thursday. In commodity markets, gold prices rose by 0.6%, reaching $2,487.50 per troy ounce, while silver declined by 1.1% to $28.63 per ounce.
The fluctuations in precious metals reflect ongoing uncertainties in the market dynamics. Investors are closely monitoring these developments as they strategize for future market conditions..