The S&P 500 traded near the flatline on Thursday as sharp technology losses offset gains across most other sectors. Investors assessed corporate earnings, labor data, and talks over reopening the Strait of Hormuz.
At 11:20 a.m. ET, the S&P 500 slipped 0.08% to 7,723. The Dow added 0.49% to 54,350. Meanwhile, the Nasdaq Composite gained 0.05% to 26,380.
Western Digital shares fell 18.5% during early trading despite reporting fourth-quarter results above Wall Street estimates. Its forecast for the fiscal first quarter failed to meet investors’ expectations.
Sandisk shares dropped 11.3% after the company released its fiscal fourth-quarter results. Both companies forecast quarterly revenue above estimates, supported by demand linked to artificial intelligence infrastructure.
However, investors focused on the companies’ valuations after large gains earlier this year. Western Digital had climbed about 200%, while Sandisk had gained around 400%.
Hank Smith, investment strategy director at Haverford Trust, said expectations had reached demanding levels. He described the latest price action as “some digestion going on in the market.”
The Philadelphia Semiconductor Index declined 1.5% during early trading. Intel and AMD also traded lower, adding pressure to the technology sector.
However, several chip stocks later recovered from early declines. Broadcom gained nearly 2%, while Marvell Technology rose about 3%. NVIDIA also moved higher during the session.
Software stocks also recorded steep declines following several corporate earnings reports. Atlassian, Salesforce, Adobe, and Zscaler traded lower during Thursday’s session.
AppLovin shares fell about 17% after the marketing platform missed Wall Street’s quarterly revenue estimate. The stock had previously benefited from investor demand for companies linked to artificial intelligence.
Datadog dropped roughly 17% after management forecast slower revenue growth during the third quarter. The outlook raised fresh questions about enterprise software demand and current market valuations.
Peloton shares also fell more than 14% after the company forecast lower sales during its coming fiscal year. Peloton linked the forecast to higher prices for its equipment and subscription services. Still, Microsoft and Amazon each gained around 1%. Their advances helped limit broader losses across the major indexes.
Despite technology weakness, nine of the S&P 500’s 11 sectors traded higher during the morning session. Energy, consumer staples, and healthcare led the sector gains. Parker-Hannifin rose 8.5% after forecasting annual profit above analysts’ estimates. The motion and control technology company also reported results that supported its full-year outlook.
Meanwhile, Albemarle gained 6.7% after the lithium producer beat quarterly profit estimates. Diageo rose about 6% after announcing a three-year plan targeting $1.2 billion in savings.
Restaurant Brands International reported adjusted earnings of $1.07 per share. Analysts had expected $1.03 per share. Revenue reached $2.52 billion, matching market estimates. Burger King recorded an 8.5% increase in comparable restaurant sales. However, other brands within the group delivered weaker results during the quarter.
New applications for unemployment benefits increased slightly during the week ending August 1. Initial jobless claims reached 199,000, up 1,000 from the prior week. The figure stayed below the Dow Jones estimate of 204,000. Separate data showed layoffs fell to their lowest level in two years during July.
Second-quarter productivity increased 1.4%, compared with 0.8% during the previous period. Economists had forecast a 0.6% gain. Additionally, unit labor costs rose 1.3%, below the 2.1% estimate. Investors will now examine Friday’s July employment report for clues about the Federal Reserve’s policy path.
Fed Chairman Kevin Warsh has reduced forward guidance, increasing the market’s focus on incoming economic data. Employment and wage figures could shape expectations for upcoming interest-rate decisions.
Brent crude traded near $80 per barrel as investors monitored negotiations involving Iran and Oman. The talks focused on reopening shipping routes through the Strait of Hormuz. An Iranian official said a temporary agreement would allow ships to travel without fees or tolls. However, final conditions had not been settled.
Deutsche Bank strategist Jim Reid said attention had shifted toward the possible agreement’s final terms. He noted “unresolved questions” about whether Iran could later charge vessels using the route.
Gold rose for a fourth consecutive session as geopolitical uncertainty supported demand. Spot gold gained 0.6% to $4,271.33 per ounce. US gold futures also rose 0.6% to $4,330.20. Earlier, spot prices reached their highest level since June 18.
Technology losses keep the S&P 500 near the flatline, despite gains across nine of its 11 sectors. Western Digital, Sandisk, AppLovin, and Datadog record the sharpest declines following earnings updates.
Meanwhile, investors monitor Iran-Oman shipping talks and Friday’s July employment report. Both developments could shape energy prices and Federal Reserve rate expectations.
Also Read: Stock Market Update: Nifty 50 Opened 0.07% Higher, Sensex Climbed 201.43 points
Join our WhatsApp Channel to get the latest news, exclusives and videos on WhatsApp
_____________
Disclaimer: Analytics Insight does not provide financial advice or guidance on cryptocurrencies and stocks. Also note that the cryptocurrencies mentioned/listed on the website could potentially be risky, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. This article is provided for informational purposes and does not constitute investment advice. You are responsible for conducting your own research (DYOR) before making any investments. Read more about the financial risks involved here.