U.S. stocks declined on Thursday as investors reacted to mixed news regarding Big Tech earnings and developments in U.S.-China relations.
The S&P 500 dropped by 1%, moving further away from its record high reached earlier in the week. The Dow Jones Industrial Average fell by 109 points, or 0.2%, while the Nasdaq composite lost 1.6% after hitting a record the previous day.
Global markets showed mixed results following a meeting between U.S. President Donald Trump and Chinese leader Xi Jinping. Trump described his discussion with Xi as “a 12” on a scale of zero to 10 and announced plans to reduce tariffs on China. Despite these comments, significant tensions remain between the two countries, and market expectations for more substantial progress were not fully met.
Brian Jacobsen, chief economist at Annex Wealth Management, commented, “The result was fine, but fine isn’t good enough given the expectations going in. The results were more like small gestures instead of a grand bargain.”
Major technology companies also faced scrutiny after releasing their latest financial results. Meta Platforms saw its shares fall by 11.3%, reducing its gains for the year amid concerns about increased spending planned for 2026 to expand artificial intelligence capabilities.
Microsoft’s stock declined by 2.9%. Although it reported higher-than-expected profit and revenue for the most recent quarter, analysts noted that Microsoft also projected higher investment costs for next year and that growth in its Azure cloud business may have missed some investor expectations.
Alphabet performed better among major tech firms; shares rose by 2.5% after reporting quarterly profit and revenue that exceeded analyst forecasts.
These large technology companies are influential in the broader market: Alphabet, Meta, and Microsoft together make up about 14.5% of the total value of all companies in the S&P 500 index, meaning their movements can significantly impact overall market performance.
Other notable moves included Chipotle Mexican Grill’s stock falling by 18.2%. The company cited economic pressures affecting younger customers and those with lower incomes as reasons for reduced dining out frequency. CEO Scott Boatwright explained that households earning less than $100,000 are cutting back due to economic uncertainty and inflation: “He pointed specifically to 25- to 35-year-old customers, who are feeling the weight of unemployment, increased student loan repayments and slower growth in wages with respect to inflation, and he said he thinks restaurants across the industry are seeing something similar.” Chipotle has lowered its forecast for sales growth this year.
Eli Lilly’s shares increased by 3.8% after posting stronger-than-expected profits and revenues driven by strong sales of its diabetes and obesity drugs Mounjaro and Zepbound; it also raised full-year guidance.
At closing, the S&P 500 stood at 6,822.34 (down by 68.25 points), the Dow Jones Industrial Average at 47,522.12 (down by 109.88), and the Nasdaq composite at 23,581.14 (down by 377.33).
In bond markets, Treasury yields remained steady as traders adjusted their expectations regarding potential interest rate cuts from the Federal Reserve later this year. Fed Chair Jerome Powell stated Wednesday that a December rate cut “is not a foregone conclusion — far from it.” The yield on the benchmark ten-year Treasury note held at approximately 4.08%.
Internationally, France’s main stock index fell by about half a percent while Germany’s dipped slightly after decisions from European central banks to keep interest rates unchanged; Japan’s Nikkei edged up marginally under similar circumstances.
