Technology stocks failed to mount a comeback Thursday after the Nasdaq’s worst day since 2022, even as chipmaker TSMC (TSM) reported better-than-expected results.
The tech-heavy Nasdaq Composite Index (IXIC) erased earlier gains to fall more than 1%, while the S&P 500 (GSPC) also fell 0.7%. The Dow Jones Industrial Average (DJI) slipped 0.4% after hitting an all-time closing high for the flagship index in the previous session.
Wall Street’s recovery has seen increasing turbulence this week as political, geopolitical and trade risks roil a market that is finally confident in the Fed’s ability to cut interest rates this year.
A sign of a slowing labor market further boosted rate cut hopes Thursday. The number of pending jobless claims again hit its highest level since November 2021.
Learn more: How does the labor market affect inflation?
Thursday’s Nasdaq losses followed a 2.7% drop in the previous session, partly due to a possible escalation of U.S. export restrictions to China. Shares of Nvidia (NVDA), TSMC and ASML (ASML) were all hammered amid a rotation of tech leaders into smaller segments of the market. All three fell again Thursday.
TSMC’s strong quarterly results helped temporarily lift the mood during the session. The Taiwanese chip giant broke a record profit with a 36% jump and raised its 2024 sales forecast to show confidence in the AI boom.
Netflix (NFLX) will be the highlight of Thursday’s earnings release after markets close. Expectations are high for the streaming service, though some on Wall Street note the stock is already flirting with record highs.
Elsewhere, investors are keeping a close eye on the US presidential race, given Donald Trump’s potential to move markets. President Joe Biden contracted COVID-19 at a key moment in his campaign, and top Democratic leaders have revived talk of an exit.
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Health care stocks drag major averages lower as investors take profits
Health care and technology stocks led all three major averages lower on Thursday.
The S&P 500 (^GSPC) fell 0.7% while the tech-heavy Nasdaq Composite (^IXIC) slid another 1%, adding to heavy losses from the previous session.
Investors took profits as the S&P 500 Healthcare Sector ETF (XLV) hit all-time highs earlier this week. The sector fell 1.4% on Thursday.
Investors also continued their rotation out of technology stocks, with the S&P 500 Technology Sector ETF (XLK) down nearly 1%.
Meanwhile, the energy sector (XLE) rose 1.3%.
Health care stocks sold off Thursday after recently hitting all-time highs.
S&P 500, Nasdaq near session lows as tech rout continues
The tech-heavy Nasdaq Composite (^IXIC) and S&P 500 (^GSPC) fell Thursday as investors continued to shy away from technology stocks.
The Nasdaq hit its lowest level of the session, down nearly 1%, while the S&P 500 also fell 0.6%.
The Dow Jones Industrial Average (^DJI) hit intraday highs before giving up those gains to fall 0.3%.
Healthcare and technology stocks were lower.
Nasdaq and S&P 500 slide into the red
Technology stocks moved into red territory on Thursday after attempting to rally from heavy losses in the previous session.
The tech-heavy Nasdaq Composite Index (IXIC) erased earlier gains to decline 0.5%, while the S&P 500 (GSPC) also fell below the flat line. The Dow Jones Industrial Average (DJI) hit new highs, after closing at a new record in the previous session.
The tech sector attempted to rebound after chipmaker TSMC (TSM) reported better-than-expected quarterly results. Shares of the Taiwan-based company rose as much as 3% before falling back into negative territory.
Dow Jones swings into green
The Dow Jones Industrial Average (^DJI) moved into green territory shortly after market open Thursday, rising 0.3%, hitting a new all-time intraday high.
The leading stock index closed above the 41,000-point mark for the first time in its history in the previous session.
Markets have broadened recently as investors have shifted away from big tech names to smaller caps and sectors like industrials, financials and energy.
Nasdaq, S&P 500 rebound as TSMC eases chip turbulence fears
The technology sector regained the lead on Thursday after heavy losses in the previous session, as chipmaker TSMC (TSM) reported better-than-expected quarterly results.
The tech-heavy Nasdaq Composite Index (IXIC) rose 0.8%, while the S&P 500 (GSPC) gained 0.3%. The Dow Jones Industrial Average (DJI) edged lower after hitting a record high at the close for the flagship index.
TSMC shares rose 3% after falling more than 7% in the previous session on emerging geopolitical headwinds. Chip stocks Nvidia (NVDA) and ASML (ASML) also rebounded slightly Thursday after being hammered Wednesday.
Concerns about even tighter restrictions on semiconductor technology exports to China sent shares in the sector tumbling Wednesday, along with comments by Republican presidential candidate Donald Trump about Taiwan, a major manufacturing hub for high-end chips.
Jobless claims higher than expected
The number of pending unemployment claims has again reached its highest level since November 2021, confirming signs of a slowdown in the labor market as unemployed people struggle to find new work.
New data from the Labor Department showed that nearly 1.87 million claims were filed in the week ending July 6, up from 1.85 million the week before. Meanwhile, 243,000 initial jobless claims were filed in the week ending July 13, up from 222,000 the week before and more than the 229,000 economists had expected.
