US equity indexes faced a decline, relinquishing previous gains, as government bond yields shifted and the dollar demonstrated a strong performance during midday trading on Thursday. The S&P 500 experienced a fall of 0.6% to 5,849.4, the Nasdaq Composite decreased by 0.7% to 19,175.4, and the Dow Jones Industrial Average saw a drop of 0.5%, closing at 42,319.4.
Initially, all three indexes had gained traction earlier in the session. Consumer discretionary and real estate sectors were at the forefront of the significant decliners, whereas energy and utilities managed to secure gains. In terms of US Treasury yields, there was a noticeable increase, with the 10-year yield rising 2.2 basis points to 4.6%, and the two-year rate advancing by 1.6 basis points to 4.27%.
Interestingly, both maturities had seen drops of over 2 basis points earlier in the day, with most yields exhibiting downward trends at that time. The US Dollar index surged by 0.8% to 109.34 intraday, having reached a 52-week peak of 109.53 earlier in the trading session. Turning to commodities, gold futures saw an increase of 1.1%, settling at $2,668.6 per ounce, while silver futures climbed by 2.3%, priced at $29.91 per ounce. In economic updates, initial jobless claims in the US fell to 211,000 for the week ending December 28, down from a revised figure of 220,000 from the previous week.
This was contrary to expectations predicting an increase to 221,000, indicating positive sentiment in the job market. The four-week moving average decreased by 3,500, landing at 223,250, effectively breaking a streak of four consecutive rises. The S&P Global US manufacturing index for December underwent an upward revision to 49.4, compared to a preliminary reading of 48.3, despite expectations for stability according to a Bloomberg analysis.
However, this figure remains below the November report of 49.7, hinting at slight contraction within the sector. A decrease was also noted in mortgage applications during the two weeks concluded on December 27, attributed to rising rates across all loan categories, according to Thursday reports from the Mortgage Bankers Association.
The market composite index, a measure of loan application volume, plummeted almost 22% on a seasonally adjusted basis compared to levels observed on December 13. Without seasonal adjustments, this index dropped a staggering 55% across the two-week period. In company-specific news, Tesla's Q4 deliveries, totaling approximately 495,600 vehicles, were reported to have fallen short of market expectations and 'whisper' numbers articulated by analysts, as highlighted in a note from Wedbush.
Following this news, shares of the electric vehicle manufacturer declined by 6.7%, marking it as the steepest decliner on both the S&P 500 and the Nasdaq. Conversely, Constellation Energy announced its success in securing a 10-year, $840 million contract to provide power to over 13 federal government agencies, causing shares to ascend by 6.2% intraday, landing it among the day’s top performers on both indexes. Moreover, West Texas Intermediate crude oil futures saw a rise of 2.2%, closing at $73.32 per barrel. In summary, the trading day highlighted a mixture of market responses driven by government bond yields and individual company performances along with macroeconomic indicators..