U.S. stock markets failed to hold early gains on Thursday and ended the session in the red. The S&P 500 fell 0.37%, the Dow Jones lost 0.74%, and the Nasdaq 100 slipped 0.55%. September E-mini futures for the S&P and Nasdaq also declined by 0.43% and 0.60%, respectively.
From Morning Euphoria to Afternoon Sell-Off
Wall Street opened with optimism as Microsoft and Meta Platforms reported strong earnings and promised increased investment in artificial intelligence. Both the S&P 500 and Nasdaq 100 briefly hit new record highs.
By the close, sentiment had shifted. ARM Holdings plunged over 13% after issuing a weaker-than-expected Q2 earnings forecast, triggering a broad sell-off in semiconductors. GlobalFoundries, KLA, Micron, Texas Instruments, and ASML dropped 3–5%.
Pharmaceutical stocks added to the pressure after President Donald Trump sent letters to 17 drugmakers demanding price cuts. Bristol-Myers Squibb and Merck tumbled over 4–5%, while Pfizer, Amgen, and Gilead fell more than 2%.
Mixed Economic Data and Tariff Headlines
Key economic releases were mixed:
- Weekly jobless claims rose slightly to 218K (better than 224K expected), signaling labor market resilience.
- U.S. personal spending in June increased 0.3% MoM (below the 0.4% forecast), while personal income rose 0.3% (slightly above 0.2%).
- Core PCE inflation, the Fed’s preferred gauge, accelerated to 2.8% YoY, above expectations of 2.7%.
On the trade front, Trump announced a 15% tariff on South Korean imports and extended Mexican tariffs for 90 days, while signaling progress on deals with Taiwan, Thailand, and Cambodia.
Stock Movers of the Day
- Biggest Losers:
- ARM Holdings −13%
- Align Technology −36% (weak revenue forecast)
- Baxter International −22%
- Qualcomm −7%
- UnitedHealth Group −6%
- Biggest Winners:
- Meta Platforms +11% (Q2 revenue $47.53B vs. $44.83B est.)
- eBay +18%
- CH Robinson Worldwide +18%
- Carvana +17%
- Western Digital +10%
Microsoft boosted the Dow Jones with a 3% gain after posting Q4 revenue of $76.44B, beating the $73.89B forecast.
Global Markets and Bonds
Overseas markets were mixed:
- Euro Stoxx 50 −1.36%
- Shanghai Composite −1.18%
- Nikkei 225 +1.02%
The 10-year U.S. Treasury yield fell to 4.365%, supported by lower inflation expectations and end-of-month portfolio rebalancing. German and U.K. yields also retreated to multi-week lows.
Looking Ahead
Investors now turn their focus to Friday’s nonfarm payrolls report. Economists expect a gain of 109K jobs and a slight uptick in unemployment to 4.2%. These figures could shape the market’s expectations for the September Fed meeting, with current futures pricing a 42% chance of a rate cut.