U.S. Stock Market Update: Economic Signals Amid Policy Changes
NEW YORK — The U.S. stock market ended Thursday on a minor decline as investors grapple with substantial policy shifts under President Donald Trump, while mixed signals about the economy continue to surface.
Market Performance Snapshot
The S&P 500 index fell by 0.2% after fluctuating between small gains and losses throughout the trading session. Similarly, the Dow Jones Industrial Average decreased by 11 points, or less than 0.1%, and the Nasdaq composite also saw a decline, dropping 0.3%.
Economic Indicators and Fed Insights
Recent data provided a glimpse into the state of the U.S. economy, which remains resilient for now. A report revealed that the number of Americans filing for unemployment benefits was slightly lower than anticipated, supporting the notion of a “low fire, low hire” job market. Additionally, stronger-than-expected sales of previously occupied homes and better-than-forecast manufacturing growth in the mid-Atlantic region bolstered confidence.
However, Federal Reserve Chairman Jerome Powell highlighted the heightened uncertainty affecting future economic forecasts during a speech Wednesday. Concerns regarding the ongoing trade tensions initiated by Trump have added to this volatility.
Sector-Specific Responses
Despite reporting quarterly results that exceeded analysts’ expectations, Accenture faced a notable decrease in its stock, which plunged 7.3%. This drop stemmed from worries about potential revenue losses due to anticipated cuts in federal spending led by influential figures like Elon Musk. Accenture reported that the federal government accounted for 17% of its North American revenues in the previous fiscal year.
Market Dynamics and Future Outlook
The recent decline in stock values reflects a necessary correction, following an earlier period of rapid price increases that outpaced corporate profit growth, resulting in elevated valuations. Barry Bannister, chief equity strategist at Stifel, noted that the S&P 500 could rebound in the short term, especially with Fed officials signaling the possibility of two interest rate cuts within the year. Lower interest rates generally stimulate economic activity and can often bolster investment prices.
Conversely, Bannister cautioned that ongoing economic deceleration in the latter part of the year, coupled with persistently high inflation, may lead to a mild stagflation scenario—an economic condition characterized by stagnation and inflation concurrent with rising unemployment—a challenge for the Fed to address effectively.
Notable Stock Movement
In terms of notable performances, Darden Restaurants saw its stock rise by 5.8%, reporting profits that met analysts’ forecasts even amidst challenging market conditions.
Closing Figures
The closing numbers for major indexes included:
- S&P 500: 5,662.89, down 12.40 points
- Dow Jones Industrial Average: 41,953.32, down 11.31 points
- Nasdaq Composite: 17,691.63, down 59.16 points
Global Market Trends
Internationally, London’s FTSE 100 index fell slightly by 0.1% as the Bank of England opted to maintain its current interest rate. Other European markets showed more significant declines, with Germany’s DAX dropping by 1.2%. In Asia, the Hang Seng index in Hong Kong experienced a marked decrease of 2.2% due to considerable pressure on technology stocks.
Bond Market Update
In the bond market, the yield on the 10-year Treasury bond decreased slightly to 4.23% from 4.25% at the end of Wednesday’s trading.
Reported by Choe for the Associated Press.
