Wall Street experienced a rollercoaster day on Thursday as morning gains were eventually erased, leaving the market mixed. The uncertainty surrounding the future of monetary policy continued to weigh on investors’ minds.
The latest data on the labor market and manufacturing activity painted a picture of a strong economy, leading many to believe that the Federal Reserve would not rush to cut interest rates. This sentiment was reflected in the market as all three major averages opened higher but eventually gave up their gains.
The tech-heavy Nasdaq Composite was down 0.03%, the S&P 500 had advanced 0.07%, and the Dow climbed 0.14%. Of the 11 S&P sectors, seven were in the green.
The S&P had been on a four-day losing streak, matching its longest of the year, and extending its losses for the month of April to over 4%. The decline was attributed to a decrease in expectations for rate cuts and the index nearing oversold levels.
Data released before the opening bell showed that initial jobless claims remained unchanged at 212K, indicating a resilient labor market. Manufacturing activity in the Philadelphia region also expanded at its highest level since April 2022.
Despite a slight drop in existing home sales and the leading economic index, economists remain optimistic about the economy’s underlying strength. Wells Fargo’s Tim Quinlan noted that the economy’s pace of expansion may moderate in the coming months, but a recession is not imminent.
New York Fed President John Williams added to the optimism by stating that there was no urgent need to lower interest rates given the strong state of the U.S. economy.
Treasury yields resumed their climb following the economic data and Williams’ comments, with the 30-year yield up 4 basis points to 4.74% and the 10-year yield up 6 basis points to 4.65%.
The earnings season also took center stage on Thursday, with semiconductor stocks taking a hit after Taiwan Semiconductor Manufacturing lowered its growth forecast for the overall semiconductor market. Blackstone slipped despite delivering a rise in distributable earnings, while Genuine Parts surged after raising its annual profit guidance.
Overall, Wall Street’s mixed performance reflected the ongoing uncertainty in the market, with investors closely watching economic data and earnings reports for clues about the future direction of monetary policy.
