US benchmark equity indexes closed lower Thursday as traders parsed comments by Federal Reserve Chair Jerome Powell and the latest producer price data.
The S&P 500 fell 0.6% to 5,949.2, the Nasdaq Composite dropped 0.6% 19,107.7 and the Dow Jones Industrial Average lost 0.5% to 43,750.9. Among sectors, industrials posted the biggest drop with only energy and technology recording gains.
Powell said the US economy is "not sending any signals that we need to be in a hurry" to ease monetary policy.
"The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully," he said. "Ultimately, the path of the policy rate will depend on how the incoming data and the economic outlook evolve."
Fed Governor Adriana Kugler said disinflation in the US has slowed, while "stubborn" housing inflation and price pressures in other categories may stall progress toward price stability.
Last week, the central bank's Federal Open Market Committee lowered its benchmark lending rate by 25 basis points, following a 50-basis-point reduction in September.
The US two-year yield rose 6.9 basis points to 4.35% Thursday, while the 10-year rate was little changed at 4.45%.
In economic news, US producer price growth in October accelerated from September, the Bureau of Labor Statistics reported. Data showed Wednesday that US consumer inflation increased in line with market estimates last month.
The probability of the FOMC lowering interest rates by 25 basis points next month dropped to 62% Thursday from 83% Wednesday, according to the CME FedWatch tool. The odds of rates remaining unchanged rose to 38%.
Weekly applications for unemployment insurance fell to the lowest since May, while continuing claims retracted, according to US government data.
West Texas Intermediate crude oil rose 0.2% to $68.58 a barrel. Commercial crude stockpiles in the US increased more than projected last week, government data showed.
The International Energy Agency increased its 2024 global oil demand outlook as consumption in advanced economies rebounded in Q3. On Tuesday, the Organization of the Petroleum Exporting Countries trimmed its 2024 and 2025 global oil demand projections for the fourth straight month.
In company news, Super Micro Computer (SMCI) shares slumped 11%, the steepest decline on the Nasdaq and the second-biggest drop on the S&P. On Wednesday, the artificial intelligence server maker said it cannot file its quarterly report for the period ended Sept. 30 on time.
Electric vehicle maker Tesla's (TSLA) shares dropped 5.8%, the second-largest drop on the Nasdaq.
Walt Disney's (DIS) fiscal Q4 results exceeded market expectations, buoyed by the streaming business. The media and entertainment giant expects adjusted earnings growth in fiscal 2025. The shares rose 6.2%, the biggest gain on the Dow and among the largest on the S&P.
Tapestry (TPR) terminated its proposed acquisition of Michael Kors and Versace parent Capri (CPRI) due to uncertainty regarding regulatory approvals. Tapestry shares jumped 13%, the biggest gain on the S&P 500, while Capri advanced 4.4%.
Gold fell 0.5% to $2,574.60 per troy ounce, and silver lost 0.1% to $30.62 per ounce.
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