U.S. stocks were mixed Thursday as investors digested weak guidance from technology bellwether Microsoft and renewed worries about Federal Reserve rate hikes.
The Dow Jones Industrial Average shed about 156 points, or 0.5%. The S&P 500 fell 0.2%. The tech-heavy Nasdaq Composite ticked up 0.4%. The three indexes are coming off two consecutive down days.
Fed Vice President Lael Brainard on Thursday said it isunlikely the central bank will take a breakfrom its current rate-hiking cycle anytime soon.
“Right now, it’s very hard to see the cause for a pause,” Brainard told CNBC’s Sara Eisen during a “Squawk on the Street” interview. “We’ve still got a lot of work to do to get inflation down to our 2% target.”
This dashed the hopes of some traders that the Fed could potentially pause its rate hikes in September if the central bank raises rates by half a percentage point in the next two meetings.
Meanwhile, shares of Microsoft slid roughly 2% as the company warned revenue and earnings this quarter would fall short of analysts’ estimates. The stock dragged on the blue-chip Dow.
Other technology names rose and boosted the Nasdaq. Nvidia gained more than 3%, Zoom rose more than 2% and Tesla added about 2%.
Meta Platforms ticked up 1% a day after Sheryl Sandberg announced she isstepping down from her role as chief operating officer.
Traders also parsed through corporate earnings results. Hewlett Packard Enterprise fell around 7% following slight misses on both earnings and revenue. Meanwhile, shares of pet retailer Chewy surged about 16% after the company reported strong quarterly results.
Investors eyed employment data showing theslowest job creation paceof the pandemic-era recovery. Private sector employment rose by just 128,000 in May, ADP reported Thursday, falling well short of the 299,000 Dow Jones estimate. In another report Thursday, initial jobless claims last week fell and came in below expectations, according to the Labor Department.
The closely-watched jobs report for May is slated for release Friday morning. Economists expect 325,000 nonfarm jobs were added in the latest month, compared with 428,000 in April.
The three major stock averages are each down on the holiday-shortened week.
“Our view is cautious as we close out the second quarter,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “Global central bank uncertainty and the pace of tighter monetary policy, still-tight global energy ... markets — which may lead to higher prices still — and headwinds for corporate earnings growth are risks for investors moving forward.”
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