new york – The early rally in U.S. stocks on Thursday waned by the end of the day, with the index largely flat.
The Standard & Poor’s 500 Index fell 0.1%, following a 2.9% drop on Wednesday when the Federal Reserve said it may cut interest rates less next year than previously thought. The index had risen as much as 1.1% in the morning.
The Dow Jones Industrial Average rose less than 0.1% after falling 2.6% on Wednesday, while the Nasdaq Composite Index fell 0.1%.
This week’s struggles have taken some of the enthusiasm out of the market, but critics have warned that the market has gotten too high and everything needs to go well to justify the high prices. But the index remains near record levels, with the S&P 500 index still up 23% and on track for one of the best years of the millennium.
Traders now expect the U.S. Federal Reserve to cut interest rates one or two times next year, according to data from CME Group. Some people don’t even bet anything. A month ago, a majority saw at least two rate cuts in 2025 as a safe bet.
Wall Street likes low interest rates because they stimulate the economy and make investments more expensive, but they can also fuel inflation.
On Thursday, Micron Technology was one of the most heavily weighted stocks in the S&P 500 index. The stock fell 16.2% even though its latest quarter’s profit beat expectations.
The computer memory company’s earnings fell short of Wall Street expectations, and Chief Executive Officer Sanjay Mehrotra said he expected consumer demand to remain weak in the near term. Sales forecasts for the current quarter were significantly lower than analysts’ expectations.
Lamb Weston, which makes french fries and other potato products, fell 20.1% after its latest quarter’s profit and sales fell short of analysts’ expectations. The company also lowered its financial targets for the fiscal year, citing continued weakness in demand for frozen potatoes, particularly outside of North America. The company replaced its chief executive officer.
Those losses helped overshadow a 14.7% gain for Darden Restaurants, which owns Olive Garden and other chains. In its most recent quarter, the company’s profit slightly exceeded analysts’ expectations. The operator of LongHorn Steakhouse also provided a revenue forecast for the current fiscal year that beat analysts’ expectations.
Accenture rose 7.1% as the professional services firm similarly beat profit estimates for the latest quarter. CEO Julie Sweet said Accenture is growing around the world and the company has raised its revenue forecast for the current fiscal year.
Amazon’s stock rose 1.3% despite workers striking at seven of the company’s facilities on Thursday, in the midst of the online retail giant’s busiest season of the year. Amazon said it does not expect any impact on its business.
In the bond market, yields were mixed a day after rising on expectations that the Federal Reserve would cut rates in 2025. Reports on the US economy were mixed.
One report showed that the overall economy grew at an annual rate of 3.1% in the summer, faster than previously thought. The economy has remained surprisingly resilient, even though the Fed kept its key interest rate at a 20-year high for some time before starting to cut rates in September.
A separate report showed fewer U.S. workers filed for unemployment benefits last week, indicating the job market also remains strong. But a third report said manufacturing in the Mid-Atlantic region is unexpectedly shrinking again, despite economists’ expectations for growth.
The 10-year Treasury yield rose to 4.57% from 4.52% late Wednesday and from less than 4.20% earlier this month.
But the two-year bond yield, which more accurately reflects expectations for near-term Fed action, fell to 4.31% from 4.35%.
Rising long-term yields keep mortgage rates high and put pressure on the housing market. Homebuilder Lennar fell 5.2% after reporting lower-than-analyst-expected profits and sales for the latest quarter.
“The housing market, which appeared to be improving due to the Federal Reserve’s short-term interest rate cuts, turned out to be much more challenging due to rising mortgage rates,” Chief Executive Officer Stuart Miller said during the quarter.
“Our performance was driven by affordability constraints due to rising interest rates, even though demand remained strong and chronic supply shortages continued to drive the market,” he said.
Thursday’s report may have provided some encouragement to the housing industry. It was shown that sales of previously occupied homes increased.
Overall, the S&P 500 fell 5.08 points to 5,867.08. The Dow Jones Industrial Average rose 15.37 points to 42,342.24, while the Nasdaq Composite fell 19.92 points to close at 19,372.77.
In overseas stock markets, London’s FTSE 100 index fell 1.1% after the Bank of England suspended interest rate cuts and left key interest rates unchanged on Thursday. The move comes as the UK’s inflation rate has risen further above the central bank’s target rate of 2%, while the UK economy remains flat at best.
The Bank of Japan also left its base interest rate unchanged, and the Nikkei Stock Average in Tokyo fell 0.7%. The rest of Asia and much of Europe saw index declines as well.
Cho writes for The Associated Press. Associated Press writers Matt Ott and Elaine Kurtenbach contributed to this report.
