Market Recap: S&P 500 Closes Lower on Thursday
The S&P 500 closed lower on Thursday as investors shifted away from large-cap technology stocks, causing the broad market index to pull back by 0.88% to close at 5,584.54. The Nasdaq Composite slipped by 1.95% to finish at 18,283.41, while the Dow Jones Industrial Average ticked down by 0.08% to 39,753.75.
Investors observed broader participation in the S&P 500 on Thursday following the latest inflation data, which hinted at a potential rate cut by the Federal Reserve. However, the lack of participation from this year’s megacap market leaders weighed on the broader index, according to Ross Mayfield, an investment strategy analyst at Baird.
Wolfe Research noted extreme levels of complacency in the put-to-call ratio, signaling potential market risks. The S&P 500 and Nasdaq-100 both experienced significant drops on Thursday, with the S&P 500 falling by as much as 1.02% and the Nasdaq-100 dropping by 2.47%.
Biotech stocks rallied on hopes for lower rates, with large-cap biotech companies like Moderna, Iqvia, and Gilead Sciences seeing positive gains. The IBB has risen about 6% year-to-date, with momentum increasing over the past month.
The Federal Trade Commission is reportedly delaying its decision on Chevron’s acquisition of Hess Corporation until after an arbitration case with Exxon Mobil is resolved. This delay could prolong the completion of the deal, impacting the shares of Chevron and Hess.
QuantumScape surged by 33% after reaching an agreement with Volkswagen Group-owned battery company PowerCo to mass produce battery cells based on QuantumScape’s solid-state lithium-metal battery technology. This deal replaces an earlier joint venture between QuantumScape and Volkswagen.
The Russell 2000 defied the market drawdown, jumping by 3.2% in Thursday’s session while the S&P 500 slipped by 0.8%. This marked a rare showing of idiosyncratic strength for small-cap stocks.
Overall, the market experienced fluctuations on Thursday, with various sectors responding to economic data and corporate developments. The potential for a rate cut by the Federal Reserve and shifting investor sentiment towards different sectors contributed to the day’s market movements.