U.S. stocks retreated from their record highs on Thursday, with the Dow Jones Industrial Average briefly crossing the 40,000 mark for the first time before closing at 39,869.38. The S&P 500 and Nasdaq also dipped slightly, following a rally to all-time highs the previous day. Deere reported stronger-than-expected profit but cut its forecast for the upcoming fiscal year, causing a 4.7% drop in its stock. Homebuilders also contributed to the market decline after a report on the housing industry fell short of expectations.
Gamestop and AMC Entertainment saw declines for a second consecutive day after initial excitement from investors, leading to a 30% drop for Gamestop and a 15.3% loss for AMC Entertainment. However, Walmart reported better-than-expected profit, resulting in a 7% jump in its stock. This positive news from Walmart could be a good sign for the broader economy, as concerns rise about inflation and credit card payments for lower-income households. Other retailers like Target, Dollar General, and Dollar Tree also saw gains following Walmart’s report.
Chubb rose 4.7% after Warren Buffett’s Berkshire Hathaway disclosed an ownership stake in the insurer. Under Armour fluctuated between losses and gains after warning of weaker revenue in the upcoming fiscal year and announcing a restructuring plan and stock buyback program. Strong profit reports have been a driving force behind the recent rally in U.S. stock indexes, along with hopes for a potential interest rate cut by the Federal Reserve. Treasury yields increased slightly following mixed economic data, with reports showing weaker manufacturing growth and higher import prices.
Stock markets abroad showed modest declines in Europe and mixed results in Asia, with Hong Kong’s Hang Seng jumping 1.6% and Japan’s Nikkei 225 rising 1.4%. Overall, the U.S. market saw some consolidation after reaching record highs, with investors closely monitoring economic data and corporate earnings reports for signals about the future direction of the market. Analysts suggest that the economy may be cooling slightly, but the combination of strong profit reports and potential Fed rate cuts could continue to support stock prices in the coming months.
