US equities dropped on Thursday as traders sifted through the winners and losers among big-spending technology names, offsetting optimism that Republicans and Democrats may strike a deal to avoid a US government shutdown.
The S&P 500 Index fell 0.3% at 9:44 a.m in New York. Energy stocks climbed alongside oil prices as President Donald Trump renewed threats against Iran. The tech-heavy Nasdaq 100 Index fell 0.7%, while the Dow Jones Industrial Average gained 0.4%.
“Big tech earnings weren’t perfect, but on balance were positive,” wrote Tom Essaye, founder of the Sevens Report, of megacap tech results over night.
Facebook owner Meta Platforms Inc. was one of the best performers in the index, with analysts saying its stronger-than-expected revenue outlook supports its massive capital spending for the next year. Its performance stands in sharp contrast to Microsoft Corp., which was among the biggest laggards in the market following disappointing guidance in its cloud computing business, while capital expenditures were higher than expected.
US Stock Market
Photo Credit: Bloomberg
“The AI theme, and who benefits from the AI capex going forward, remains the largest driver of factor and market cap calls,” said Dennis DeBusschere, president and chief market strategist at 22V Research.
Investors will get another chance to assess the megacap technology space after markets close Thursday, when Apple Inc. is due to report results.
In Washington, Trump and Democrat Senate Minority Leader Chuck Schumer are reportedly nearing a deal to avert a government shutdown. Derek Holt, head of capital markets economics at Scotiabank, said that with funding expiring this weekend, “the US is creeping too close for comfort” to a stoppage.
Initial jobless claims for the last week came in ahead of expectations, while continuing claims fell. Dow Inc. shares fell after the company said Thursday it would cut roughly 4,500 jobs.
Additional data due Thursday include factory and durable goods orders as well as wholesale inventories, scheduled for 10 a.m. in New York. Producer price data is due on Friday.
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