Stocks fell Thursday, with the Dow Jones Industrial Average registering its worst day of 2024, as a post-earnings rally in Nvidia failed to lift the broader market.
The 30-stock Dow slid 605.78 points, or 1.53% for its worst session of the year. Boeing was the biggest laggard in the Dow, falling 7.5%. The S&P 500 dropped 0.74%, and the Nasdaq Composite tumbled 0.39% after both indexes reached record highs earlier in the day.
Chipmaker and artificial intelligence darling Nvidia surged 9.3%, sending shares above $1,000, after posting stronger-than-expected fiscal first-quarter results and announcing a 10-for-1 stock split.
Fiscal second-quarter revenue guidance of about $28 billion also beat an LSEG consensus forecast of $26.61 billion — a sign the company doesn’t see its momentum slowing. For the bottom line, analysts expect a profit of $5.95 per share.
Nvidia’s results have been a focal point for Wall Street, as traders hoped for signs that the excitement around AI is not waning. With its market cap of more than $2.5 trillion, Nvidia also has considerable sway over the broad S&P 500.
However, the majority of the stocks in the broad market index turned negative Thursday, indicating a lack of market breadth. More than 400 names in the S&P 500 were lower, and information technology was the only positive sector for the day.
Stronger than expected economic data also evaporated the rally on Thursday as investors cut their odds of a rate cut in September. Services and manufacturing data for May both topped economists’ expectations, according to purchase manager surveys from S&P Global released Thursday. Labor market data also beat estimates, adding to investors’ concerns the Federal Reserve will not lower interest rates soon.
Traders are currently pricing just a 51% chance the Fed will cut rates in its September meeting, down from 58% a day ago and nearly 68% in the prior week, according to the CME FedWatch Tool. When the level falls, below 60% it’s viewed as no longer likely that the Fed will take action.
The market has “some loose footing,” Piper Sandler chief market technician Craig Johnson wrote in a Thursday note. “This market’s strange mix of leadership, combined with breakdowns in transportation stocks and mediocre breadth readings, makes us not so confident that a new leg higher will be sustained from current levels.”
This is a developing story. Please check back for updates.
