Chuck Mikolajczak
(Reuters) – U.S. stocks fell on Thursday even as a strong earnings outlook for Nvidia (NASDAQ:) sent its shares higher, but that was overshadowed by economic data showing inflation remains a concern.
Nvidia shares jumped more than 10% to top $1,000 a share and helped lift the Nasdaq and set intraday records in early trading after the artificial intelligence chip company forecast quarterly revenue above estimates and announced stock splitting.
But stocks lost ground after economic data showed U.S. price pressures increased in May, even as stronger business activity and a decline in weekly jobless claims suggested the labor market remained on solid footing.
“What this probably suggests is that people are now braced for disappointing data on economic growth, slowing inflation, lower rates, and this morning … it caught people off guard,” said Brian Nick, senior investment strategist at the Macro Institute in New York. York.
“Anything that looks like good news is still perceived as bad news, which shows that we are still in the period of a Fed bailout rally where the market as a whole is happy that interest rates have stopped rising, but the worst would be for interest rates. rates will continue to rise at this stage.”
The S&P 500 fell 556.66 points, or 1.40%, to 39,114.38, the S&P 500 lost 31.87 points, or 0.60%, to 5,275.14 and the index lost 38.11 points. , or 0.23%, to 16,763.44.
That gain helped the S&P 500 technology index become the only gainer among the 11 major S&P sectors on Thursday. But despite gains in Nvidia shares, semiconductors overall were lower, with the PHLX Semiconductor Index down 0.21%.
Stocks’ rally to record highs this month was fueled in part by optimism in artificial intelligence, a strong earnings season and renewed hopes that the Fed will cut rates this year. Nvidia shares are up about 11% this year after rising about 240% in 2023.
Markets now rate the likelihood of a rate cut of at least 25 basis points (bps) in September at 52.2%, up from nearly 67% a week ago, according to CME’s FedWatch Tool.
The Dow fell partly as Boeing (NYSE:) shares fell more than 7% after the U.S. aircraft maker forecast negative free cash flow in 2024 due to sluggish deliveries.
DuPont (NYSE:) announced plans to split into three publicly traded companies. Shares of the US conglomerate rose 0.34%, sharply off previous highs.
Shares of Ticketmaster owner Live Nation fell 8.21% after the U.S. Justice Department, a group of 30 states and the District of Columbia sued Thursday to break up the concert promoter.
Declining issues outnumbered advancing ones by a ratio of 5.05 to 1 on the NYSE and 3.59 to 1 on the Nasdaq.
The S&P recorded 33 new 52-week highs and seven new lows, while the Nasdaq recorded 132 new highs and 141 new lows.