Wall Street's main indexes closed lower on Thursday after Federal Reserve Chair Jerome Powell dampened investors' hopes for another interest rate cut this year by saying the U.S. central bank need not rush to ease monetary policy.
Market Snapshot
The Dow Jones Industrial Average fell 207.33 points, or 0.47%, to 43,750.86, the S&P 500 lost 36.21 points, or 0.60%, to 5,949.17 and the Nasdaq Composite lost 123.07 points, or 0.64%, to 19,107.65.
Market Movers
EV stocks dropped on Thursday as investors worried that President-elect Trump would end electric vehicle purchase tax credits. Nikola fell 22.8%; Rivian fell 14%; Tesla fell 5.8%.
Domino’s Pizza Inc. shares jumped 7% in late New York trading. Berkshire Hathaway Inc. bought stock in Domino’s Pizza Inc. and Pool Corp. during the third quarter as Chairman Warren Buffett cut back on some long-held investments.
Walt Disney gained 6.2% after the entertainment giant reported fiscal fourth-quarter earnings of $1.14 a share that topped analysts' estimates. Disney's direct-to-consumer streaming business posted an operating profit of $321 million in the period compared with a year-earlier loss of $387 million.
Cisco Systems reported fiscal first-quarter earnings that fell from a year earlier. On an adjusted basis, profit of 91 cents a share topped analysts' estimates of 87 cents, while revenue of $13.84 billion, down 6% from the prior year, topped expectations of $13.78 billion. The networking company said product orders, excluding the Splunk acquisition, rose 9% in the period. Cisco issued a revenue forecast for its current second quarter that at the midpoint was higher than consensus forecasts. "Our customers are investing in critical infrastructure to prepare for AI, and with the breadth of our portfolio, we are uniquely positioned to capitalize on this opportunity," said Chief Executive Chuck Robbins. The stock was down 2.1%.
Shares of ASML rose 2.9% after the Dutch semiconductor-manufacturing equipment company reaffirmed its 2030 revenue outlook of between EUR44 billion ($46.3 billion) and EUR60 billion. The forecast, from ASML's investor day, also included expectations that global chip sales will reach more than $1 trillion by 2030 on growing demand for artificial intelligence.
U.S.-listed shares of JD.com fell 6.6% after the Chinese e-commerce giant reported third-quarter profit jumped 48% from a year earlier and revenue increased 5.1% but missed analysts' expectations.
Super Micro Computer was down 11.4% to $18.01, extending losses from Wednesday after the server maker said it needs additional time to file its quarterly 10-Q report. Coming into Thursday, the stock had plummeted 83% from its all-time high of $118.81 in March.
Tapestry rose 13% and Capri Holdings rose 4.5% after the companies called off their $8.5 billion merger agreement, saying the move was "in the best interest of both companies, as the outcome of the legal process is uncertain and unlikely to be resolved by the Feb. 10, 2025 outside date."
Intuitive Machines fell 13% after rising earlier in the session. Third-quarter revenue at the space-exploration company rose to $58.5 million, up from $12.7 million a year earlier, and exceeded analysts' estimates of $50.9 million. The company also reported record backlog of $316.2 million, driven primarily by its fourth award under NASA's next Commercial Lunar Payload Services program.
Hims & Hers Health declined 24% after Amazon.com announced it will charge $16 a month for generic hair loss pill finasteride. Hims & Hers advertises a $22-a-month price for the same medicine. Amazon also said it would charge $19 a month for erectile dysfunction pills and $10 per month for an antiaging skin cream in its latest foray into the healthcare industry.
Market News
Powell Says No Need for Fed to Rush Rate Cuts Given Strong Economy
Ongoing economic growth, a solid job market, and inflation that remains above the 2% target means the U.S. central bank does not need to rush to lower interest rates and can deliberate carefully, Federal Reserve Chair Jerome Powell said on Thursday.
In remarks that align with a developing expectation in financial markets for fewer rate cuts next year than previously forecast by Fed officials, Powell affirmed that he and his fellow policymakers still consider inflation to be "on a sustainable path to 2%" that will allow the U.S. central bank to move monetary policy "over time to a more neutral setting."
Michael Burry Boosts China Stakes But With Cautious Hedges
Michael Burry, the hedge fund manager famous for his 2008 bet against the US housing market, further increased his exposures in China stocks including Alibaba Group Holdings Ltd. in the third quarter as Beijing rolled out a stimulus blitz, but also added new bearish options that would provide downside protection.
Scion Asset Management, Burry’s investment firm, boosted its holdings of Alibaba by almost 30% to 200,000 shares during the quarter. At the same time, Scion bought put options with the notional value equivalent to 84% of its Alibaba holdings, according to a 13F regulatory filing on Thursday. The put options allow Scion to sell the stocks to lock in a profit or limit losses, should Alibaba tumble.
