The Nasdaq Composite experienced a rebound on Thursday, following three consecutive days of losses, as investors resumed their interest in technology stocks. The tech-heavy index showed a modest increase of 0.4%. In contrast, the Dow Jones Industrial Average declined by 73 points, equivalent to a 0.22% decrease, while the S&P 500 remained relatively unchanged.
Investors demonstrated renewed interest in certain prominent tech stocks that had experienced setbacks earlier in the week. Despite a previous decline, Tesla shares saw an upward trend after being downgraded by a second major Wall Street bank in as many days. The renowned Tesla supporter and Morgan Stanley analyst, Adam Jonas, revised his rating on Thursday from overweight to equal weight, stating that the stock now presents a “more balanced risk reward” following its substantial rally. Additionally, Amazon shares increased by over 3%, while Microsoft and Apple both saw a rise of around 1%.
However, in other market developments, Spirit AeroSystems, a supplier to Boeing, faced a significant decline of 11% after announcing a halt in production at its Kansas facility due to an impending worker strike scheduled to begin on Saturday. Furthermore, Boeing shares also dropped by more than 2%.
The S&P 500 experienced a decline of 0.5% on Wednesday, representing its poorest performance for the month of June. Consequently, the equity benchmark is now down by 1% for the week, potentially interrupting its five-week winning streak. This comes after the broader market index reached its highest level in over a year during the previous week.
The decline on Wednesday occurred following remarks from Federal Reserve Chair Jerome Powell, indicating that additional interest rate hikes are likely in order to combat inflation. This disappointed investors who had hoped that the central bank was nearing the end of its tightening cycle. While the Federal Reserve maintained interest rates at the previous week’s policy meeting after ten consecutive hikes, officials suggested the possibility of two additional quarter-percentage point increases later this year.
Megan Horneman, Chief Investment Officer at Verdence Capital Advisors, remarked that the weaker market conditions reflect the realization that not only the Federal Reserve but also global central banks remain fully committed to fighting inflation, even at the expense of economic growth.
Moreover, investors processed Thursday morning’s release of higher-than-anticipated weekly jobless claims data. The Labor Department reported a total of 264,000 initial filings for unemployment benefits for the week ending June 17, exceeding economists’ expectations of 256,000, as per a Dow Jones survey.
