Stock Market Today: Wall Street Drifts Lower as Momentum Slows for US Stocks

U.S. stock indexes showed a downward trend on Thursday as they responded to a mixed set of earnings reports from major firms like Morgan Stanley and UnitedHealth Group.

The S&P 500 index decreased by 0.2%, experiencing fluctuations throughout the day with small gains and losses. While more stocks in the S&P 500 rose than fell, significant drops in key stocks, particularly Tesla, led to the overall decline.

The Dow Jones Industrial Average fell by 68 points, or 0.2%, and the Nasdaq composite index saw a larger drop of 0.9%.

The movements in the stock market were relatively modest, particularly following a day where optimism rose due to a positive inflation report. This report raised hopes that the Federal Reserve might consider further interest rate cuts later in the year.

Treasury yields in the bond market also remained stable after the release of mixed economic reports. One report indicated that growth in retail sales in the U.S. was weaker than expected last month. Another report pointed out that more workers filed for unemployment benefits in the previous week, while a separate report revealed that manufacturing in the mid-Atlantic region unexpectedly returned to growth.

These reports together suggest that while the U.S. economy is not close to entering a recession, it may be showing some slowing signs that could help keep inflation in check. Recent fluctuations in the market have been influenced by how traders adjust their expectations regarding future actions by the Federal Reserve regarding interest rates.

When economic reports ease inflation concerns, expectations for interest rate cuts tend to rise, leading to lower Treasury yields and higher stock prices. Conversely, if inflation becomes a larger concern—due to a robust economy or possible government policies—Treasury yields usually increase while stock prices drop.

On Thursday, yields experienced a slight decrease. The yield on the 10-year Treasury fell to 4.61% from 4.66% late Wednesday and from 4.79% a day earlier. The yield for the two-year Treasury, which is more closely tied to the Federal Reserve's anticipated actions, decreased to 4.23% from 4.27% on Wednesday and from 4.37% on Tuesday.

Despite these decreases, Treasury yields remain higher than they were last fall. Higher yields can negatively affect stock prices unless companies report significantly higher profits to offset this.

On Wall Street, Morgan Stanley saw its stock rise by 4% after posting stronger-than-expected quarterly earnings. CEO Ted Pick noted improvements in investment banking, and robust financial markets helped grow total client assets to $7.9 trillion across its wealth management sectors.

This positive report came after a day when several banks, including Citigroup, Goldman Sachs, and Wells Fargo, reported better-than-expected profits.

Bank of America also released a profit report that exceeded expectations, but its stock declined by 1%.

On the other hand, U.S. Bancorp experienced one of the largest declines within the S&P 500 after announcing quarterly results that fell short of analysts’ predictions, resulting in a 5.6% drop in its stock price.

Meanwhile, UnitedHealth Group lost 6% after reporting a profit that surpassed forecasts but revealing revenue figures that missed expectations due to unexpected rises in medical costs.

This was the company’s first financial statement following a highly publicized incident involving one of its executives outside a New York City hotel.

Tesla’s stock also weighed on market performance, dropping by 3.4% on news that the company is offering discounts on its upcoming Cybertruck, indicating potential struggles in attracting buyers as sales of its electric vehicles decline for the first time in over a decade.

In conclusion, the S&P 500 fell by 12.57 points to close at 5,937.34, the Dow decreased by 68.42 points to finish at 43,153.13, and the Nasdaq dropped by 172.94 points, closing at 19,338.29.

Internationally, stock markets showed positive movement, with indexes in Europe and Asia experiencing gains. Notably, France’s CAC 40 rose by 2.1%, South Korea’s Kospi climbed by 1.2%, and Hong Kong’s Hang Seng also gained 1.2%.

In the technology sector, Taiwanese semiconductor producer Taiwan Semiconductor reported a remarkable 57% increase in profits for the last quarter, largely driven by the ongoing boom in artificial intelligence. Its U.S.-traded stock rose by 3.9% following the announcement.

stocks, market, earnings, economy, bonds