Wall Street saw a pause in its recent rally on Thursday as U.S. stocks and gold retreated from record highs. The S&P 500 slipped by 0.3% from its latest all-time high, marking only its second loss in the past ten days. The Dow Jones Industrial Average dropped by 243 points, or 0.5%, while the Nasdaq composite edged down by 0.1%.
Gold prices also declined, falling 2.4% to below $4,000 per ounce after a strong rally earlier this year. Treasury yields remained relatively steady following significant gains that were largely driven by expectations of interest rate cuts from the Federal Reserve.
There is growing concern among investors that financial markets may have become overvalued after a rapid climb, including a 35% increase for the S&P 500 since April’s low point. These concerns are especially focused on stocks related to artificial intelligence technology.
Dell Technologies experienced the largest drop in the S&P 500, falling by 5.2%. Despite this decline, Dell’s stock remains up nearly 11% for the week after highlighting its AI growth opportunities at an investment conference.
Tesla shares fell by 0.7% after the National Highway Traffic Safety Administration began a preliminary evaluation of Tesla’s “Full Self-Driving” system due to safety concerns.
Delta Air Lines helped offset some losses with a gain of 4.3%, reporting stronger-than-expected summer profits and providing an optimistic profit forecast for the final quarter of the year. Glen Hauenstein, Delta’s president, said: “a broad-based acceleration in sales trends over the last six weeks, including for business travel domestically.”
Company earnings reports are gaining importance as indicators of economic strength because government data releases have been delayed due to a shutdown. For example, unemployment claims data has not been published for two consecutive weeks.
PepsiCo shares rose by 4.2% after posting better-than-expected quarterly profits and noting improved momentum in its North American drinks business.
Akero Therapeutics jumped by 16.3% following news that Novo Nordisk plans to acquire it for up to $5.2 billion if Akero’s lead product receives federal approval.
MP Materials gained 2.4% amid China’s announcement of export restrictions on rare earth materials used in various industries.
Costco Wholesale increased by 3.1%, reporting an eight percent rise in September revenue compared to last year.
At market close, the S&P 500 was down by 18.61 points at 6,735.11; the Dow fell to 46,358.42; and Nasdaq closed at 23,024.63.
Internationally, European indexes were mixed following Ferrari’s sharp decline after releasing financial forecasts that disappointed some analysts. In Asia, Shanghai stocks rose sharply when trading resumed post-holiday and Japan’s Nikkei climbed with SoftBank Group surging after announcing a major deal involving ABB’s robotics unit.
In bonds, yields on U.S Treasuries held steady with minor movement noted on Thursday.
