4:14pm:
Stocks failed to achieve new record highs by Thursday’s close despite the Dow Jones Industrial Average briefly touching 40,000 for the first time.
The Dow closed down 0.1% at 39,869, while the Nasdaq Composite and the S&P 500 dropped around 0.3% and 0.2% respectively, with the latter just below 5,300.
The market was influenced by commentary from three Fed officials, warning of prolonged higher interest rates, which dampened the recent rally.
Earlier, Walmart reported quarterly results exceeding expectations, while Berkshire Hathaway disclosed a $6.7 billion stake in Chubb, ending months of speculation and boosting the insurer's shares by about 5%.
1.59pm: Wall Street gives up gains
Wall Street looked to reverse on earlier gains as previous optimism that interest rates could be cut soon appeared to lose steam.
By Wednesday lunchtime, the Nasdaq and S&P 500 were down 15 and one point respectively, leaving the Dow Jones alone in the green, up just 5 points at 39,913.
Thursday’s data showing a cooling job market in the US on the back of a softer-than-expected inflation reading on Wednesday had lifted hopes of multiple base rate cuts this year.
However, comments from the Richmond Federal Reserve president showed the other side of the story, as he signalled to CNBC that, despite the favourable data, cuts may still be some way off.
“On the inflation side, it certainly came off the numbers of the prior few months, which was good,” Thomas Barkin, who is a voting member on the Federal Open Market Committee, said.
However, he added: “It’s still not where we’re trying to get to target.
“I do believe we’re on the right path here. I do believe inflation is coming down on the big picture.
“My point is only to get to 2% sustainably in the right kind of way. I just think it’s going to take a little bit more time.”
12.16pm: Wall Street notches up new highs
The Dow Jones surpassed the 40,000 mark for the first time on Thursday, fuelled by growing hopes that interest rate cuts could be around the corner.
Come the afternoon, the index was up 98 points at 40,006.
The Nasdaq and S&P 500 also looked to rack up new records, climbing 17 and 8 points respectively to 16,760 and 5,316 after having set new intraday highs earlier on.
News that the US jobs market had cooled added further fuel to renewed speculation that the Federal Reserve could now be eyeing two cuts to base interest this year, after softer-than-expected inflation figures on Wednesday.
“We believe that the prospect of lower interest rates is too tempting for the market to ignore,” XTB’s Kathleen Brooks said.
“If the Fed is serious about cutting rates in the coming months, then it may want to consider a cut in July over September, due to the latter’s proximity to the November Presidential election.”
Among companies, Walmart Inc (NYSE:WMT, ETR:WMT) held onto gains of over 6% into the afternoon after upping full-year guidance in expectation-beating first-quarter results.
Third quarter results had Cisco Systems Inc (NASDAQ:CSCO, ETR:CIS) down 2.3% in the meantime after an update on Wednesday showed revenue beat expectations but still suffered a 13% fall over the period.
9.30am: US stocks flat as job market cools
Wall Street opened flat on Thursday after fresh unemployment data revealed that layoffs have remained at a historically low level.
All three indexes opened flat, experiencing low single-digit point drops.
Jobless claims for the week to May 11 dropped by 10,000 to 222,000, the US labour department revealed.
Last week's unemployment data reached its highest point in around 9 months, but still remains at historically low levels since the pandemic saw a surge of layoffs.
In April, only 175,000 new jobs were created, marking the weakest growth in six months and highlighting that the labour market may be cooling.
Even though initial claims were lower than expected, continuing claims showing an increase would suggest those that are starting to receive unemployment benefits are not finding new work… https://t.co/oVUVQqk1sl
— Short The Vix (@ShortTheVix1) May 16, 2024
8.30am: Wall Street to hold at record highs
US stocks are expected to open flat on Thursday, coming off a strong Wednesday which saw both the Nasdaq and S&P 500 reach record highs as inflation data came in lighter than expected.
Now, futures for both indexes are indicating they will open higher, with the S&P 500 at 5,335 and the Nasdaq at 18,709.
In equities, Walmart pushed 6.5% higher in premarket trading after it posted its largest earnings beat in three years.
Both sales and profits soared at the retailer after a strong turnaround from its advertising operations and a rise in demand from high-income consumers.