The S&P 500 and Nasdaq Composite experienced a slight decline on Thursday as traders scrutinized the latest economic indicators and corporate earnings. Both indices edged down by 0.1%, closing at 5,867.1 and 19,372.8, respectively, while the Dow Jones Industrial Average remained stable at 42,342.2, ending a 10-day losing streak.
Among market sectors, real estate faced the most significant drop, while utilities emerged as the top performers. In the realm of economic news, the US third-quarter real gross domestic product increased at an annual rate of 3.1%, based on a final estimate from the Bureau of Economic Analysis. This figure is an improvement from the previously indicated growth of 2.8%, which was the consensus from a Bloomberg-compiled poll. "A stronger-than-expected showing in third-quarter GDP reinforces the Federal Reserve's characterization of a 'solid' economy and the need for a reduced pace and number of further interest rate cuts," Stifel stated in a note to clients.
"With a strong consumer and positive business investment, there is ample justification for a policy pause sooner than later as we turn the calendar page into 2025." Additionally, US existing home sales exceeded expectations last month, reflecting the most substantial year-over-year increase since June 2021, as reported by the National Association of Realtors. Conversely, manufacturing conditions in both the Mid-Atlantic and Midwest regions of the US unexpectedly worsened this month, according to separate surveys from the Philadelphia Fed and the Kansas City Fed. On Thursday, the US two-year yield declined by 3.6 basis points to 4.32%, while the 10-year yield increased by 7.6 basis points to 4.57%. Earlier this week, the Federal Open Market Committee of the US central bank decreased interest rates by 25 basis points and indicated fewer cuts in the pipeline than previously anticipated.
Fed Chair Jerome Powell commented post-meeting, stating, "The monetary policy stance is now significantly less restrictive. We can therefore be more cautious as we consider further adjustments to our policy rate." In the commodity markets, West Texas Intermediate crude oil fell by 1%, settling at $69.85 a barrel on Thursday. Turning to company-specific news, Lamb Weston ($LW) saw its shares plummet by 20%, marking the worst performance on the S&P 500 following disappointing fiscal second-quarter results and a downgraded full-year forecast, coupled with the announcement of its chief executive's resignation. Micron Technology ($MU) faced the steepest decline on the Nasdaq and the second-largest drop on the S&P 500, plummeting 16% as it warned of weakness in consumer-oriented markets that would likely affect its second-quarter outlook. In contrast, Darden Restaurants ($DRI) shares surged nearly 15% on Thursday, becoming the top gainer on the S&P 500, after raising its full-year revenue forecast and reporting better-than-expected fiscal second-quarter results. Accenture ($ACN) was the second-best performer on the S&P 500, rising by 7.1%, having increased its full-year revenue growth outlook and exceeding fiscal first-quarter expectations. In the precious metals market, gold prices dropped by 1.6% to $2,611.50 per troy ounce, while silver fell 4% to $29.51 per ounce..