Stocks closed lower on Thursday, giving up early gains, as concerns about future Federal Reserve policy moves offset excitement over recent corporate earnings.
The Dow Jones industry average lost 249.13 points or 0.73% to close at 33,699.88. The S&P500 slipped 0.9% to end at 4,081.50. The Nasdaq Composite experienced the biggest drop of the three, falling 1.02% to end the session at 11,789.58.
The three indices marked session lows in the last hour of trading. From daily highs, the Dow rose more than 300 points, while the S&P 500 and Nasdaq Composite gained 0.9% and 1.4%, respectively.
“Wall Street couldn’t sustain the bullish sentiment,” said Ed Moya, senior market analyst at Oanda. “Some traders have bet the Fed will have to tighten much more than Wall Street is pricing in.”
Google parents alphabet slipped more than 4% as investors grew concerned about increasing competition in the artificial intelligence space. A 3% drop Meta also dragged down the tech-heavy Nasdaq Composite.
Investors have been eyeing the Fed’s comment lately as they look for clues on future monetary policy moves following last week’s 25 basis point rate hike. On Tuesday, Fed Chair Jerome Powell said inflation was cooling but there was still a long way to go.
At the same time, Wall Street is in the middle of earnings season. Investors are looking for insights into how companies have fared amid high inflation and how they expect to perform going forward. Traders initially started the day with higher bids after positive gains from leading consumers Walt Disney And PepsiCo.
Disney shares closed more than 1% lower. Earlier, the stock tumbled after the entertainment giant posted less-than-expected subscriber losses on its streaming service, along with profits and revenue that beat analyst estimates. CEO Bob Iger said Thursday on CNBC’s Squawk on the Street that he expects to stay in the role for just two years. Meanwhile, activist investor Nelson Peltz said he would end a proxy fight after the company unveiled a restructuring plan that included 7,000 layoffs and a reorganization of its operations.
PepsiCo is up nearly 1% on fourth-quarter earnings that beat Wall Street expectations.
But despite the latest beats, Wall Street has viewed this earnings season as lackluster. Nearly 70% of the roughly two-thirds of S&P 500 companies that have reported earnings so far have beaten analysts’ expectations, FactSet data shows. That hit rate is below a three-year average of 79%, according to data from The Earnings Scout.
Read today’s market coverage in Spanish here.
Comments are closed.