Stephen Culp
NEW YORK (Reuters) – U.S. stocks turned negative on Thursday amid enthusiasm for Nvidia Corp (NASDAQ:) Quarterly results faded and robust economic data fueled concerns about longer-term monetary policy.
US Treasury yields rose after the data.
All three major U.S. stock indexes moved lower in the afternoon, with technology stocks posting the only gains among the 11 major U.S. economic sectors.
“The market is at an all-time high, valuations are stretched, and we’re approaching the peak of Nvidia’s report (Wednesday) evening,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.
“You saw it after the Fed reports, you saw it after a couple of really important data releases – and I think the same thing is happening with NVIDIA earnings – you get this initial run-up or sell-off associated with the initial reaction, and then the market digests it. recalibrates as expected,” Mayfield added.
Semiconductor stocks got an adrenaline rush from Nvidia, the mega-cap chip maker at the forefront of artificial intelligence optimism, as the company forecast quarterly revenue above estimates and announced a stock split.
On the economic front, a survey from S&P Global showed that U.S. business activity grew faster than economists had forecast in May.
The data is primarily viewed through the lens of the Fed, the timing of the first interest rate cut and whether the central bank can rein in inflation without triggering a recession.
“Tracking PMI data came in better than expected, adding to the hawks’ hopes,” Mayfield added. “So the thinking has shifted from Nvidia to thinking about tariffs and ‘higher and longer’.”
The S&P 500 fell 609.91 points, or 1.54%, to 39,061.13, the S&P 500 lost 44.34 points, or 0.84%, to 5,262.67, down 96.85 points. or 0.58%, to 16,704.70.
European shares gave up earlier gains and closed only nominally higher as optimism over Nvidia’s strong outlook was tempered by lower rate cut expectations.
The pan-European index rose 0.07%, while the MSCI index of shares across the world fell 0.65%.
Emerging market stocks lost 0.44%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.4% lower after rising 1.26%.
US Treasury yields rose after data showed US business activity picked up and the labor market remained tight, supporting the Fed’s “higher and longer” stance.
Benchmark 10-year bonds were last down 11/32 in price to yield 4.4767% from 4.434% late Wednesday.
The 30-year note was last down 17/32 at 4.5816%, down from 4.55% late Wednesday.
The dollar strengthened against a basket of world currencies after the release of economic data from the United States and the eurozone.
The rate rose by 0.14%, the euro fell by 0.16% to $1.0804.
The Japanese yen weakened 0.06% against the greenback at 156.89 per dollar, while sterling last traded at $1.2689, down 0.20% on the day.
Crude oil prices reversed earlier gains, marking their fourth straight session, as the idea that interest rates will remain restrictive longer than expected raised the prospect of weaker U.S. demand.
the price fell 0.90% to $76.87 per barrel, down from $81.36 per barrel, down 0.66% on the day.
Gold prices fell to a one-week low after the release of the Fed minutes.
fell 1.8% to $2,335.19 an ounce.