Stocks struggled for direction Thursday as investors digested some good-news-is-bad-news economic data and the latest batch of earnings reports.
The bulk of the day's price action was to the downside, though, with tech stocks seeing outsized losses as Treasury yields spiked to levels not seen since the Great Financial Crisis.
On the economic front, the Philadelphia Fed manufacturing index swung to a positive reading of 12.0 in August from last month's reading of -13.5. This was the first time since May 2022 that all of the survey's indicators – general activity, new orders and shipments – were positive.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Additionally, the Labor Department said initial jobless claims fell by a more-than-expected 11,000 last week to 239,000. "This morning's unemployment claims data continues to point to a tight labor market while yesterday's release of minutes from the Federal Reserve's July meeting revealed that policymakers still believe considerable inflation risks exist," says José Torres, senior economist at Interactive Brokers. As such, the possibility remains that the Fed will hike rates again at its November meeting, Torres adds.
Futures traders are currently pricing in a 37% probability of a quarter-point rate hike at the November meeting, up from 27.8% one week ago, according to CME Group.
Walmart stock drops despite earnings beat
In single-stock news, Walmart (WMT, -2.2%) was the latest major retailer to report earnings. In the second quarter, the blue chip retailer reported better-than-expected earnings of $1.84 per share on revenue of $161.6 billion. Additionally, U.S. same-store sales were up 6.4%, well above the 4.1% analysts were expecting, while inventory levels fell 8% from the year prior. The company also raised its full-year guidance.
"Walmart performed better than Target (TGT) due to online spending and mostly because it sells more everyday staples," says Anthony Denier, CEO of investing platform Webull. "Still, rising energy prices, student loan payments starting up again, inflation, more rate hikes and tighter lending standards present headwinds for the retail sector."
Elsewhere, CVS Health (CVS) plummeted 8.1% after Blue Shield of California said it will no longer use the drugstore chain and healthcare services company as its preferred pharmacy benefits partner. While CVS will still provide specialty drugs to Blue Shield of California, the nonprofit health insurer will use Mark Cuban's Cost Plus Drug Company and Amazon Pharmacy as its main pharmacy network.
U.S. Steel rises on reports of another potential bidder
Another notable mover today was U.S. Steel (X), which added 0.2% after Reuters reported ArcelorMittal (MT, +0.7%) is considering a potential buyout offer for the Pittsburgh-based steel company.
ArcelorMittal would join Cleveland-Cliffs (CLF, -2.5%) and privately owned Esmark as potential suitors for the company. The two firms have recently put in offers of $7.3 billion and $7.8 billion, respectively, for U.S. Steel. As a result, shares of X have shot up almost 40% in the past week.
As for the major indexes, the Dow Jones Industrial Average closed down 0.8% at 34,474, while the S&P 500 slipped 0.8% to 4,370. Meanwhile, the Nasdaq Composite dropped 1.2% to 13,316 as rate-sensitive tech and communication services stocks like Apple (AAPL, -1.5%) and Netflix (NFLX, -3.0%) fell amid spiking Treasury yields. Most notably, the 10-year Treasury yield jumped 2.6 basis points to 4.284% – its highest level since early 2008. (A basis point = 0.01%)
Related Content
-
Four Essential Michael Jordan Quotes on Life in RetirementThe GOAT of basketball on how he spends his time and what he misses.
-
Three Critical Tax Changes Could Boost Your Paycheck in 2026Tax Tips The IRS predicts these tax breaks may change take-home pay in 2026. Will you get over $1,000 in tax savings?
-
Dow Beats 334-Point Retreat on Tech Bite: Stock Market TodayInvestors, traders and speculators wonder whether this remains a Magnificent 7 market and how long this AI-driven bull run will last.
-
What the Rich Know About Investing That You Don'tPeople like Warren Buffet become people like Warren Buffet by following basic rules and being disciplined. Here's how to accumulate real wealth.
-
Dow Adds 516 Points on Broad Optimism: Stock Market TodayEasing trade war tensions and promise from early earnings reports has investors looking on the bright side to start the week.
-
Dow Dives 878 Points on Trump's China Warning: Stock Market TodayThe main indexes erased early gains after President Trump said China is becoming "hostile" and threatened to cancel a meeting with President Xi.
-
Dow Adds 238 Points as UNH, CAT Pop: Stock Market TodayThe lack of a September jobs report didn't seem to worry market participants, with the data delayed due to the ongoing government shutdown.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have TodayBank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have TodayORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
How to Invest for Rising Data Integrity RiskAmid a broad assault on venerable institutions, President Trump has targeted agencies responsible for data critical to markets. How should investors respond?
