Stock Market Today: S&P500 slumps as weaker economic data rattles stocks
Investing.com-- The S&P 500 started August under heavy pressure on Thursday as softer economic data placed recession fears back in the spotlight.
At 16:00 ET (20:00 GMT), the Dow Jones Industrial Average fell 669 points, or 1.6%, the S&P 500 declined 2.8%, and the NASDAQ Composite dropped 2.8%.
Weaker U.S. data spark economic jitters ahead of nonfarm payrolls
Initial jobless claims increased to 249,000 for the week ended in Jul. 27, higher than expected, while the ISM manufacturing index for July came in at 46.8, below the 48.2 forecast.
"The 16-month streak of sub-50 readings that extended from November 2022 through March 2024 was the longest streak of contraction since August 2000-January 2002 (18 months), notably exceeding the decline surrounding the Great Financial Crisis," Jefferies said in a note.
The duo of reports added to concerns about an economic downturn even as the Federal Reserve is expected to lower interest rates next month. The 10-year Treasury yield fell below 4% for the first since February as jitters about a hard landing resurface.
The Fed on Wednesday kept {{ecl-168||interest rates unchanged}, but chairman Jerome Powell signaled that a September rate cut was on the table should upcoming economic data incluiding the monthly nonfarm payrolls due Friday continue to show progress on inflation and cooling in the labor market.
Tech falters on chip weakness; Meta jumps; Apple results eyed
Technology stocks followed the broader market, lower, even as Meta Platforms (NASDAQ:META) jumped nearly 5% following stronger-than-expected second-quarter earnings and upbeat guidance.
The results showed that its investments into AI to improve the efficacy of its target ads are starting to bear fruit.
"AI will be leveraged to accelerate progress across many objectives with significant compute requirements, and therefore CapEx is expected to grow 'significantly' in FY25," Deutsche Bank said in a note.
Qualcomm (NASDAQ:QCOM), meanwhile, slid 9% after flagging a revenue hit after the U.S. revoked one of its export licenses for sanctioned Chinese telecom firm Huawei. The chipmaker also reported quarterly results that topped Wall Street estimates.
Arm Holdings ADR (NASDAQ:ARM), meanwhile, fell about 16% after chip desinger's softer guidance offset better-than-expected quarterly results.
NVIDIA Corporation (NASDAQ:NVDA) fell nearly 7% paring gains from a day earlier as investors awaited further insight into the chip sector, with Intel (NASDAQ:INTC) set to report after the closing bell.
Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) are also set to report on Thursday.
Moderna slumps on guidance cut, Eli Lilly gains on weight loss drug results
Moderna (NASDAQ:MRNA) stock fell 21% after the slumped 11% after the drugmaker cut its full-year revenue guidance, citing low EU sales and a competitive vaccine environment in the U.S..
Eli Lilly (NYSE:LLY) was up 3% after trial results showed weight loss drug Zepbound reduces the risk of hospitalization, death and other outcomes for obese adults with a common type of heart failure.
(Peter Nurse, Ambar Warrick contributed to this item.)
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