The S&P 500 closed lower on Thursday, snapping a three-day winning streak, as a pullback in major tech stocks dragged down the broader market. The index fell 0.21%, settling at 5,937.34. The Nasdaq Composite, heavily weighted in technology, dropped 0.89% to 19,338.29, while the Dow Jones Industrial Average declined by 68.42 points, or 0.16%, to finish at 43,153.13.
Apple led the tech downturn, shedding 4% and marking its worst performance since early August. Tesla saw a sharp decline of over 3%, while Nvidia lost nearly 2%, and Alphabet slipped around 1%.
Earlier in the day, the market had been buoyed by positive corporate earnings reports. Morgan Stanley exceeded earnings expectations, causing its stock to surge by 4%. Bank of America also posted stronger-than-expected results, but its stock slipped by 1%. These earnings reports followed similar positive performances from financial giants like JPMorgan Chase and Goldman Sachs, who had also surpassed fourth-quarter forecasts. According to FactSet, 77% of companies reporting so far this earnings season have beaten estimates, providing a strong start to the reporting period.
Despite the early optimism, the major indices surrendered gains, as analysts noted the market may be showing signs of fatigue. Keith Buchanan, senior portfolio manager at Globalt Investments, commented, “There’s some heaviness and almost even exhaustion to this market, as we all try to give this bull market another leg to go and see what fuels the next upside moment.” Buchanan pointed out that while bank earnings were a positive start, more robust catalysts will be needed for sustained market growth.
Wednesday had marked the strongest session for Wall Street since November, with the Dow soaring over 700 points and the S&P 500 and Nasdaq rallying 1.8% and 2.5%, respectively. This surge was driven by a slight improvement in core inflation from December’s consumer price index and solid earnings reports from big banks, prompting a “risk-on” rally.
The yield on the 10-year U.S. Treasury bond retreated significantly after reaching a 14-month high earlier in the week, settling around 4.615%.
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