On Thursday, equities experienced a decline as challenges in the overall market eclipsed the impressive earnings reported by major technology firms Microsoft and Meta Platforms. The S&P 500 experienced a decline of 0.37%, concluding at 6,339.39, marking its third consecutive day of losses. Meanwhile, the Nasdaq Composite saw a slight decrease of 0.03%, finishing at 21,122.45. Both indexes reached intraday highs before pulling back from those positions. The Dow Jones Industrial Average experienced a decline of 330.30 points, equivalent to 0.74%, concluding at 44,130.98.
Microsoft and Meta, two prominent players in the “Magnificent Seven,” experienced increases of approximately 4% and 11%, respectively, following quarterly earnings that surpassed expectations. Microsoft, the software giant, announced that its cloud computing service Azure generated annual revenue surpassing $75 billion. Meta provided a positive forecast for third-quarter sales, exceeding analysts’ expectations. Microsoft’s robust earnings report elevated the company to a $4 trillion market capitalization.
The persistent ascent of technology stocks did not translate into gains for the overall market on Thursday, as evidenced by nine of the 11 S&P 500 sectors closing in negative territory. UnitedHealth and Merck experienced notable declines within the Dow, with losses of 6% and 4%, respectively. “These market reactions—despite strong earnings, capex, and buyback activity—are becoming increasingly difficult to justify,” stated Joseph Cusick, senior vice president and portfolio manager at Calamos Investments. “Concurrently, the downside fluctuations have remained comparatively limited.”
Equities experienced a downturn following a reassessment of Federal Reserve policy, as this week’s central bank meeting prompted numerous investors to reconsider the likelihood of interest rate reductions in September. Additionally, sentiment was dampened by the White House’s deadline on Friday to implement significantly increased tariffs on major trading partners, including India and Brazil.
President Donald Trump has declared the extension of a 25% duty on Mexican imports for an additional 90 days. U.S. Treasury Secretary Scott Bessent indicated on Thursday that negotiations with China have reached a stage where both parties “have the makings of a deal.” Bessent refrained from providing specifics regarding a potential deal, nor did he suggest a timeline for when such an agreement might be reached. The United States and China face a deadline of August 12 for the expiration of the truce concerning aggressive tariffs.
Thursday signified the conclusion of what has predominantly been a robust month for the equity markets. The S&P 500 experienced an increase of 2.2% in July, whereas the 30-stock Dow recorded a modest gain of approximately 0.1%. Both indexes experienced their third consecutive month of positive performance. The Nasdaq experienced a 3.7% increase during the period, marking its fourth consecutive month of gains. Mag Seven names Apple and Amazon are scheduled to announce their earnings following the market close on Thursday.