In early trading on Thursday, August 6, US stocks presented a mixed picture, with the Dow Jones Industrial Average experiencing a slight decline. Traders are closely monitoring geopolitical developments in the Middle East, as an agreement to reopen the Strait of Hormuz is reportedly progressing. Wall Street is also digesting a substantial number of corporate earnings reports.
Meanwhile, the number of Americans filing new claims for unemployment benefits ticked up to 199,000 last week. The Dow fell by 39.22 points, or 0.07%, to 54,309.90 points. The Nasdaq Composite rose by 51.66 points, or 0.20%, to 26,415.09 points, and the S&P 500 index gained 9.58 points, or 0.12%, to 7,733.13 points.
Shares of SanDisk slid 9% after the memory storage company's fourth-quarter results failed to satisfy investors. Additionally, AppLovin plunged 19% on mixed quarterly performance, while Western Digital fell 14% after its first-quarter forecast disappointed investors, despite the company's fourth-quarter earnings surpassing expectations.
Oil prices edged higher as Iran and Oman near a deal to reopen the Strait of Hormuz. An Iranian government official told media that under a temporary agreement, shipping through the strait would not be subject to fees or tolls. Deutsche Bank strategist Jim Reid noted, "The market has seen many false dawns in this conflict. While details are becoming more concrete, the focus is shifting from whether a deal can be reached to what the final arrangement will look like, including outstanding issues such as whether Iran will ultimately be allowed to impose tolls on vessels using the strait."
At the same time, the first lock-up period for SpaceX stock is approaching its expiration, with over 900 million shares set to be released into the market. The phased unlocking plan provides early investors with their first opportunity to sell, which could exert pressure on the stock's price.
Economic data released on Thursday showed that the scale of corporate layoffs in the US remains moderate, while second-quarter productivity growth exceeded expectations and labor costs remained under control. Data from the US Department of Labor showed that initial jobless claims for the week ending August 1 rose slightly to 199,000, lower than the economist consensus estimate of 205,000. The four-week moving average, which helps smooth out short-term volatility, fell to its lowest level since September 2022. Continuing claims for the previous week rose to 1.8 million, in line with expectations. This metric is used to gauge the number of people currently receiving unemployment benefits.
Economists expect that the July employment report, due out on Friday, will show solid job growth, as consumer spending continues to support economic activity. In other data, productivity for the April-to-June quarter grew at an annualized rate of 1.4%, up from 0.8% in the previous quarter and exceeding the 0.6% forecast. The Bureau of Labor Statistics reported that unit labor costs, which measure hourly compensation adjusted for productivity, rose 1.3%, lower than the 2.1% expected. Productivity grew at a 1.4% annualized rate quarter-over-quarter, compared to the median estimate of 0.6% from a survey of 33 economists, whose forecasts ranged from 0.1% to 1.8%. The prior figure was revised up to 0.8%. Unit labor costs rose 1.3% quarter-over-quarter, versus an expected 2.1% increase, after a previous reading of 1.3%. Output increased 1.7% quarter-over-quarter, up from 1.5% in the preceding quarter.
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