US equity indexes experienced mixed performance on Thursday as markets prepared for the implementation of proposed tariffs on Mexico and Canada scheduled to take effect next week. The Nasdaq Composite Index decreased by 0.5%, settling at 18,985.4, while the S&P 500 inched up by 0.1% to 5,961.3. The Dow Jones Industrial Average saw a rise of 0.7%, reaching 43,743.4.
Sector performance highlighted a strong showing from energy and financial services, while utilities and technology sectors faced declines. President Donald Trump announced on Thursday that his administration would implement 25% tariffs on imports from Mexico and Canada starting March 4. Additionally, China is set to incur an extra 10% tariff on the same date, as noted in a post on Truth Social. Nigel Green, Chief Executive of deVere Group, a firm specializing in financial advisory and asset management, noted, "A stagnating economy coupled with rising prices is an economic quagmire that policymakers dread.
It limits options, fuels uncertainty, and shakes investor confidence." In economic developments, the weekly applications for unemployment insurance in the United States showed an increase beyond market expectations, reaching a joint-highest level since December. This insight was provided through data released by the government on Thursday. Thomas Simons, Chief US Economist at Jefferies, commented, "We had expected a higher number this week due to the layoffs from the Department of Government Efficiency; however, it is challenging to confirm if this was the driving factor in the increase." On another front, pending home sales in the US experienced a decline of 4.6% in January, registering a 70.6 index reading, marking an all-time low, as reported by the National Association of Realtors.
This forward-looking indicator, which reflects contract signings for home sales, fell significantly more than the anticipated 0.9% drop projected by a Bloomberg poll. NAR Chief Economist Lawrence Yun stated, "It's evident that elevated home prices and higher mortgage rates have strained affordability within the housing market." According to a second estimate released on Thursday by the Bureau of Economic Analysis, the US economic growth rate for the fourth quarter held steady with the initial forecast, while inflation accelerated. In bond markets, US Treasury yields observed an increase during the day, with the two-year rate up by 2.4 basis points to 4.1% and the 10-year rate rising by 4.9 basis points to 4.3%. Turning to company-specific news, shares of Nvidia, represented by the ticker NVDA, fell by 3.2% in afternoon trading, making it the poorest performer on the Dow, despite having reported stronger-than-expected fourth-quarter results on Wednesday. Analysts from Deutsche Bank commented that while the results were a modest beat, there was nothing particularly impressive in terms of guidance, which left investors underwhelmed.
"It was the smallest revenue beat in two years, underwhelming investors accustomed to much larger surprises," the brokerage noted. Salesforce, under the ticker CRM, was the second-worst performer on the Dow, witnessing a 1.3% drop in its shares following its fourth-quarter results, which indicated revenue growth falling short of market expectations, even though earnings per share exceeded forecasts. Retailer Bath & Body Works, trading under the ticker BBWI, reported a year-on-year decline in fiscal fourth-quarter sales, forecasting a potential earnings drop this year, resulting in an 11% plummet in its shares during afternoon trading. Meanwhile, stocks of Warner Bros.
Discovery, noted by the ticker WBD, surged nearly 11%, propelling it among the top gainers in the S&P 500, despite an unexpected widening of its fourth-quarter losses accompanied by greater-than-expected sales declines. The media and entertainment titan did report a growth in subscribers relative to both annual and sequential metrics, projecting ongoing growth in this area. Crude oil futures for West Texas Intermediate climbed by 2.6% to $70.41 per barrel, while gold futures fell by 1.1% to $2,897.1 per troy ounce, and silver was down by 1.4% to $32.10 per troy ounce..