Stocks fell Thursday as a hotter-than-expected U.S. inflation report weighed on the market. Tech shares failed to maintain the momentum seen earlier in the week. The Nasdaq slid 0.66% to end at 19,902.84, dropping back below the 20,000 threshold.
The S&P 500 shed 0.54% to close at 6,051.25. The Dow Jones Industrial Average lost 234.44 points, or 0.53%, to settle at 43,914.12, marking its sixth straight losing day. Notable tech decliners included software giant Adobe, which lost more than 13% following a weaker-than-expected 2025 outlook.
The producer price index, which tracks wholesale prices, came in higher than anticipated with a 0.2% monthly increase. The 10-year Treasury yield jumped to a two-week high after the data. This follows November’s consumer price index report, which met estimates and has led investors to expect another Fed rate cut next week.
“I think the trajectory of disinflation is promising and concerning at the same time,” said Keith Buchanan, senior portfolio manager at Globalt Investments. “We continue to grind below 3%, but progress seems to be slowing as we try to get things towards the Fed’s target of 2%.” Buchanan still believes the Fed will lower rates next week. Fed funds futures trading data reflects a nearly 95% likelihood of a quarter-point cut.
Wall Street is coming off a mixed session, with the Nasdaq topping 20,000 for the first time on Wednesday, reaching new all-time and closing highs. The S&P 500 also gained, while the Dow pulled back. Stocks finished lower on Thursday.
The Nasdaq fell about 0.7% to close at 19,902.84, and the S&P 500 dropped 0.5% to close at 6,051.25. The Dow Jones Industrial Average also slid 234 points, or 0.5%, to finish at 43,914.12. The “Magnificent Seven” may be due for more big moves heading into 2025, according to Strategas Research Partners’ head of technical analysis Chris Verrone.
“The Mag 7 is not going quietly to end the year,” he wrote, noting that Apple, Amazon, Microsoft, Alphabet, Meta Platforms, Tesla, and Nvidia all hit fresh highs in the previous session.
Inflation pressures weigh on stocks
Those stocks have seen year-to-date gains ranging from nearly 29% to over 78%.
Nvidia hit a new 52-week high during Thursday’s trading. Eyes are on Broadcom’s earnings due after the close as investors watch for further AI-related growth updates. Shares were down about 2.3% around midday.
“We’re looking for continued guidance on AI and its trajectory, which will be crucial for investors,” said Nancy Tengler, CEO of Laffer Tengler Investments. “Broadcom was previously considered a value stock, but it could now be seen as a growth stock. However, it appeals to both, thanks to its continued dividend payments and growth.”
Tengler noted Broadcom’s wireless segment guidance was revised downward but said that adjustment has been factored into the stock price.
Shares are up just 4% this quarter but have surged nearly 60.8% this year, fueled by enthusiasm around its role in AI infrastructure. Sentiment remains strong, with 10 analysts giving a strong buy rating and 26 rating it a buy. Analysts forecast fourth-quarter earnings of $1.39 per share on $14.07 billion in revenue, exceeding the company’s $14 billion guidance.
The S&P 500 has risen around 27% this year, hovering near all-time highs. This puts the index on pace for its seventh strongest year on record, according to Canaccord Genuity Capital Markets. Last year, the benchmark gained 24%.
“Back-to-back gains of 20% or more, although rare, have historically led to further upside,” said analyst Michael Welch. “The mid-90s was the only other period when the S&P had back-to-back >20% gains.”
Ciena shares popped 16%, heading for their best day since December 2022, after the networking equipment company issued strong guidance. Ciena expects fiscal 2025 revenue to grow 8% to 11%, topping estimates.
It sees first-quarter revenue between $1.01 billion and $1.09 billion, ahead of the $1 billion estimate. The rally came even as the company fell short of Wall Street’s earnings expectations. Some companies making headlines in midday trading include Adobe, which tumbled more than 12% after announcing lighter-than-expected revenue estimates, Warner Bros.
Discovery, which surged 15% on plans to reorganize into linear and streaming segments, and Chevron, which advanced 3% following a Bank of America upgrade.
