NEW YORK – On Thursday, U.S. stock indices experienced slight declines amid lingering concerns over substantial policy changes under President Donald Trump and a mixed economic outlook. The S&P 500 slipped 0.2%, fluctuating between small gains and reductions throughout the day. Similarly, the Dow Jones Industrial Average dipped by 11 points, or under 0.1%, while the Nasdaq composite saw a decrease of 0.3%.
For several weeks, the stock market has been experiencing volatility, driven largely by uncertainty surrounding the potential impacts of Trump’s trade policies on the economy. Stocks received a temporary boost on Wednesday following the Federal Reserve’s comments that the economy could sustain current interest rate levels due to its solid standing. Further data released on Thursday reinforced this viewpoint. One report indicated that fewer U.S. workers filed for unemployment benefits last week than anticipated by economists, pointing to a potentially stable, though cautious, job market.
Another report highlighted stronger-than-expected sales of pre-owned homes last month, while a third showed improved manufacturing growth in the mid-Atlantic region. Despite these positive signals, Federal Reserve Chair Jerome Powell cautioned that the high level of uncertainty makes future economic predictions challenging.
However, it’s not solely trade policy concerns swaying Wall Street. Accenture faced a significant loss on Thursday, despite posting slightly better-than-expected quarterly profit and revenue figures. Concerns have mounted regarding potential revenue impacts from the U.S. government, as cost-saving measures led by Elon Musk could affect the federal budget. Accenture, which derived 17% of its North American revenue from the federal government in the previous fiscal year, saw its stock plummet 7.3%.
According to Barry Bannister, chief equity strategist at Stifel, the recent drop in the broad U.S. stock market was anticipated due to its rapid climb to a level deemed excessive when contrasted with corporate earnings. Bannister suggests that the S&P 500 may experience a short-term rebound, particularly with Federal Reserve officials indicating potential room for two more interest rate cuts this year, which could stimulate both the economy and investment prices. Historically, markets have seen rallies following significant downturns after prolonged upward movements.
Nevertheless, Bannister predicts continued pressure on stock prices due to a sharper slowdown in economic growth during the second half of the year and persistently high inflation, which may create a mild “stagflation” environment that the Fed struggles to manage effectively. The Fed could lower interest rates to aid the economy, yet such actions would further elevate inflation levels.
In individual stock movements, Darden Restaurants rose by 5.8% after posting quarterly profits that met market expectations despite acknowledging a “challenging environment.” Darden is the parent company of popular chains like Olive Garden and Ruth’s Chris Steak House.
Overall, the S&P 500 decreased by 12.40 points to close at 5,662.89. The Dow Jones Industrial Average declined by 11.31 points to 41,953.32, and the Nasdaq composite dropped 59.16 points to 17,691.63.
Internationally, London’s FTSE 100 slipped by 0.1% following the Bank of England’s decision to maintain its primary interest rate. Elsewhere, European indices saw sharper falls, with Germany’s DAX declining by 1.2%. In Asia, Hong Kong’s Hang Seng index suffered a steep 2.2% decline under pressure on tech stocks.
In the bond market, the 10-year Treasury yield fell slightly to 4.23% from 4.25% the previous day.