U.S. stocks were lower during Thursday's midday trading, with technology shares leading the decline. The Nasdaq index fell by 380 points. Investors were assessing the earnings results from NVIDIA and Salesforce.com. The number of initial jobless claims in the U.S. for the previous week came in lower than expected.
The Dow Jones Industrial Average dropped 139.75 points, or 0.28%, to 49,342.40. The Nasdaq Composite declined 381.19 points, or 1.65%, to 22,770.89. The S&P 500 index fell 64.60 points, or 0.93%, to 6,881.53.
Shares of chip giant NVIDIA fell 4.7% after the company reported fourth-quarter revenue and profit that exceeded expectations. NVIDIA CEO Jensen Huang stated that the market's view of AI as a threat to software is "wrong."
Software company Salesforce.com provided disappointing revenue guidance for fiscal year 2027. Despite this, the stock still rose more than 2%. Salesforce.com has been one of the biggest casualties recently amid fears of AI disruption.
Advanced Micro Devices (AMD) declined 4%. The company announced a multi-year partnership with Nutanix aimed at building a more open and enterprise-friendly AI platform to support the next wave of agent AI applications.
U.S. stocks had shown a positive performance on Wednesday. The S&P 500 rose 0.8%, closing higher for a second consecutive session. The tech-heavy Nasdaq Composite gained approximately 1.3%. The Dow Jones Industrial Average, which tracks 30 stocks, advanced about 307 points, or roughly 0.6%.
During Wednesday's regular trading session, software and technology stocks rebounded. Oracle gained 1.2%, and each of the so-called "Magnificent Seven" tech stocks closed higher. Microsoft, which has significantly underperformed this year, rose about 3% on the day.
Nevertheless, market sentiment towards software and cybersecurity stocks remains fragile this year due to concerns that rapidly advancing AI capabilities could disrupt the businesses of existing software providers.
"Looking at the software industry right now, the earnings revision outlook for the next one to two years is positive. So the question isn't what will happen to software earnings over the next year or two," said Abigail Yoder, U.S. Equity Strategist at J.P. Morgan Global Wealth Management.
"The question is how the market assesses its terminal value and assigns a valuation accordingly. I think that's what the market is currently grappling with," she added.
On the economic data front Thursday, U.S. initial jobless claims for the previous week came in at 212,000, below expectations.
The U.S. Labor Department reported Thursday that first-time claims for unemployment benefits edged higher last week but remained within their historical range, suggesting that despite softer hiring, employers are continuing to hold off on widespread layoffs.
Seasonally adjusted initial jobless claims totaled 212,000 for the week ending February 21, an increase of 4,000 from the prior week's upwardly revised figure, but below the Dow Jones consensus estimate of 215,000. The four-week moving average, which smooths out weekly volatility, increased by just 750 to 220,250.
Continuing jobless claims, which are reported with a one-week lag, fell by 31,000 to 1.833 million.
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