U.S. stocks fell on Thursday as investors reacted to a series of quarterly earnings reports, with major tech companies relinquishing some of the gains from the previous session. The Dow Jones Industrial Average and S&P 500 each closed 0.2% lower, while the Nasdaq Composite slipped 0.9%.
Nasdaq loses 172 points as major earnings paint a mixed picture
The major indexes were coming off their best one-day performance in over two months on Wednesday, spurred by better-than-expected inflation data that raised hopes for continued interest rate cuts by the Federal Reserve, alongside strong earnings reports from several large banks.
Bank earnings remained a focal point on Thursday. Morgan Stanley (MS) saw its shares rise 4% to an all-time high after reporting fourth-quarter earnings that exceeded Wall Street expectations, driven by increased deal-making. Conversely, Bank of America (BAC) shares fell 1% despite exceeding earnings estimates. U.S. Bancorp (USB) and PNC Financial Services Group (PNC) both experienced declines of 5.6% and 2%, respectively, after releasing their earnings reports.
Shares of major technology firms, which had performed well the previous day, dropped across the board. Apple (AAPL) led the declines with a 4% decrease, while Tesla (TSLA) fell 3.4%. Other significant losses included Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), and Meta Platforms (META).
UnitedHealth Group (UNH) shares plunged 6%, making it the leading decliner in both the S&P 500 and Dow, following disappointing quarterly results.
In the semiconductor sector, stocks generally rose after Taiwan Semiconductor Manufacturing Co. (TSM) reported better-than-expected earnings and provided a positive outlook for demand fueled by AI advancements. Chip equipment manufacturers, including KLA Corp (KLAC), Lam Research (LRCX), and Applied Materials (AMAT), each saw gains of more than 4%, while U.S.-traded shares of Taiwan Semi increased nearly 4%.
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Economic data released on Thursday, including weekly jobless claims and monthly retail sales figures, came in largely as anticipated. Investors monitored these indicators closely for insights that could impact the Fed’s interest rate decisions. The yield on the 10-year Treasury dropped to 4.61%, down from 4.65% the previous day, marking its most significant decline since August, driven by the positive inflation data.
Bitcoin traded at $99,600 in late-afternoon trading, having rebounded from an intraday low of $97,300 but down from a high of approximately $100,900. It had surpassed $100,000 for the first time in over a week on Wednesday.
Gold futures rose 1.3% to about $2,750 per ounce, while WTI crude oil futures decreased by 1.6% following a substantial gain the prior day.
On Thursday, the Dow Jones Industrial Average fell 68.42 points, or 0.16%, to 43,153.13; the S&P 500 lost 12.57 points, or 0.21%, to 5,937.34; and the Nasdaq Composite dropped 172.94 points, or 0.89%, to 19,338.29. The yield on the 10-year Treasury note was recently reported at 4.615%, reflecting a decline in expectations for interest rates, partly in response to comments from Fed Governor Christopher Waller about potential quicker rate cuts.
Concerns about potential tariffs from President-elect Donald Trump were also highlighted, with his Treasury Secretary pick, Scott Bessent, indicating tough measures on Russia’s oil sector and the importance of maintaining the dollar as the world’s reserve currency.
UnitedHealth’s performance significantly impacted the Dow, dragging it down by over 201 points after the health insurer’s fourth-quarter revenue fell short of expectations.
Apple’s decline was exacerbated by a report from Canalys indicating that the company had been overtaken as China’s largest smartphone seller in 2024 by competitors Vivo and Huawei.
On the New York Stock Exchange, advancing issues outnumbered decliners by a ratio of 1.81-to-1, while the Nasdaq’s ratio stood at 1.07-to-1. The S&P 500 recorded 21 new 52-week highs and nine new lows, while the Nasdaq Composite noted 58 new highs and 101 new lows. Total trading volume on U.S. exchanges reached 14.31 billion shares, below the recent 20-day average of 15.75 billion shares.
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