U.S. stock indexes closed with a mixed finish on Thursday, as the S&P 500 fell slightly, marking its fifth consecutive loss. The Dow Jones Industrial Average edged up, while the Nasdaq composite slipped. Equifax and Las Vegas Sands were among the biggest losers, while Elevance Health and Genuine Parts saw gains.
The recent struggles in the stock market can be attributed to rising yields in the bond market, which have dashed hopes of multiple interest rate cuts by the Federal Reserve this year. Despite this, reports on Thursday showed that the U.S. economy remains stronger than expected, with fewer workers applying for unemployment benefits and growth in manufacturing accelerating.
Top Fed officials have indicated that they may hold interest rates high for a while, as inflation has remained higher than forecasted. Traders are now expecting just one or two rate cuts this year, down from initial expectations of six or more. The bond market also saw an increase in yields, with the 10-year Treasury rising to 4.63%.
The positive outlook for a strong economy keeping interest rates high could drive growth in profits for companies. Alaska Air and Ally Financial reported better-than-expected profits, while Ibotta, a digital company backed by Walmart, soared in its first day of trading.
Stock markets abroad also saw modest gains, with South Korea’s Kospi leading the way with a 2% jump. Overall, the mixed finish in U.S. stock indexes reflects the ongoing uncertainty surrounding interest rates and the economy.
