The three major indices mostly closed lower as investors continued to sell off technology stocks while buying blue-chip and small-cap stocks. The US economy remained strong in the second quarter, inflation eased, and expectations for interest rate cuts in September were unaffected.
As of the close, the Dow Jones Industrial Average rose by 81.20 points, an increase of 0.20%, closing at 39,935.07 points; the Nasdaq Composite declined by 160.69 points, down 0.93%, ending at 17,181.72 points; and the S&P 500 index fell by 27.91 points, a decrease of 0.51%, closing at 5,399.22 points. The Nasdaq and S&P 500 experienced their third consecutive day of declines. Nvidia (NVDA.US) rose by 1.180 (+1.051%) but fell 1.7%, Google (GOOG.US) decreased by 0.750 (-0.443%) and dropped over 3%, while Tesla (TSLA.US) increased by 0.660 (+0.300%), rising 1.9%.
In European markets, the German DAX 30 index fell 80.74 points, a decline of 0.44%, to close at 18,299.95 points; the UK FTSE 100 index rose by 30.31 points, an increase of 0.37%, closing at 8,184.00 points; the French CAC 40 index decreased by 86.71 points, down 1.15%, ending at 7,427.02 points; the European STOXX 50 index declined by 50.92 points, down 1.05%, to 4,810.95 points; the Spanish IBEX 35 index dropped 68.10 points, a 0.61% decrease, closing at 11,142.00 points; and the Italian FTSE MIB index fell by 704.65 points, a drop of 2.04%, ending at 33,767.00 points.
In the Asia-Pacific stock markets, the Nikkei 225 index fell over 3%, the Jakarta Composite index in Indonesia decreased by 0.66%, and the VN30 index in Vietnam dropped by 0.65%.
In the commodities market, COMEX August gold futures fell by 2.21%, settling at $2,362.40 per ounce; COMEX September silver futures declined by 4.51%, closing at $27.995 per ounce.
In the cryptocurrency market, Bitcoin rose by 0.83%, trading at $65,905.90 per coin; Ethereum fell by 4.6%, priced at $3,181.54 per coin.
In energy, WTI September crude futures closed up $0.69, an increase of nearly 0.89%, at $78.28 per barrel; Brent September crude futures rose by $0.66, about 0.81%, closing at $82.37 per barrel.
In the metals market, most London metals declined, with copper rising by $18 to $9,122 per ton, ending an eight-day losing streak. Aluminum fell by $30, down over 1.30%, to $2,270 per ton; zinc decreased by $4 to $2,681 per ton; lead dropped $16, settling at $2,028 per ton; nickel fell by $58 to $15,769 per ton; and tin decreased by $374, down over 1.25%, to $29,416 per ton.
MACROECONOMIC NEWS
The U.S. economy continues to show strength, with a growth rate of 2.8% in the second quarter. The U.S. Department of Commerce reported on Thursday that, after adjusting for seasonal and inflationary factors, the annualized GDP growth for the second quarter was 2.8%, easily surpassing the 2.1% expectation from economists surveyed by foreign media. Despite the economy performing well in many respects even amid high interest rates and a slowdown in inflation, many Americans are dissatisfied with the significantly higher prices of groceries, cars, and housing compared to a few years ago. While recession forecasts have diminished, signs of economic weakness remain, with the job market beginning to slow down and employers adding jobs at a slower pace in the second quarter compared to the first. Consumers also face increasing resistance from persistently high borrowing costs.
U.S. durable goods orders end four-month streak of increases. Durable goods orders in the U.S. unexpectedly declined in June, breaking a four-month growth trend. Data released by the U.S. Department of Commerce on Thursday showed that durable goods orders fell by 6.6% month-over-month in June, marking the largest decline since January 2024. The largest decreases were seen in transportation and capital goods orders, particularly in non-defense aircraft and parts.
Yellen praises Biden for achieving "excellent" economic performance, stating that the U.S. is on a soft landing path. U.S. Treasury Secretary Janet Yellen commended President Biden on Thursday for achieving a "significant economic recovery" and indicated that the second quarter GDP and inflation data confirm that the U.S. is on a path of "stable growth and decreasing inflation." Yellen stated that Biden has restored the U.S.'s standing in the world. This marks Yellen's first public remarks on this topic since Biden ended his campaign and endorsed Vice President Harris as his successor. Yellen expressed pride in serving with Biden and Vice President Harris for the American people and looks forward to continuing to advance U.S. leadership globally, benefiting American families and businesses. She noted that since Biden and Harris took office, the strong growth of the U.S. economy has created 15.7 million jobs, which is not coincidental but a result of the economic plans of the Biden and Harris administration that have helped maintain global economic resilience.
Market analysis: U.S. large-cap growth stocks will test more support before normalizing. Following a sharp sell-off on Wednesday, U.S. stocks are struggling to stabilize and rebound. The S&P 500 index saw a slight decline, while the Nasdaq fell by more than 1%. However, these movements are relatively calm compared to Wednesday's plunge. Sameer Samana, a senior global market strategist at Wells Fargo Investment Institute, wrote, "For some time, the extreme enthusiasm for mega-cap growth stocks seems unsustainable, but the timing and potential catalysts for a reversal remain unclear." He added, "Before large-cap growth stocks normalize, additional support tests and sideways trading may be needed; as fast money leaves the sector, we may see more weakness."
Former Fed hawk: The Fed may signal readiness to cut rates in September. Former hawkish Fed member James Bullard commented that the U.S. growth rate in the first half of the year was close to 2%, and the Fed may start hinting at a readiness to cut rates in September. The latest economic data does not point to a recession, and productivity has not truly improved. The economy is slowing down but is approaching trend growth rates, indicating a soft landing.
【Stock News】
Ford Motor Company (F.US) +0.044 (+0.394%) experiences the largest single-day drop in 15 years as warranty costs erode profits. Ford's stock closed down significantly, marking its largest single-day decline in over 15 years, after the company attributed its severely disappointing earnings to soaring warranty costs for older vehicles. Persistent quality issues have inflated Ford's warranty expenses over the years, but the $800 million spike in costs during the second quarter caught investors off guard. CFO John Lawler noted that this surge was a one-time increase related to quality issues in vehicles produced in 2021 and earlier. In the second quarter, Ford reported adjusted earnings per share of 47 cents, far below analysts' average estimate of 67 cents. The stock plummeted 18% on Thursday, the biggest single-day drop since November 2008, erasing all gains for the year.
OpenAI is set to launch an online search tool, "SearchGPT," to challenge Google (GOOG.US, GOOGL.US). OpenAI is allowing a small group of users to test a new set of search features that will provide answers with more timely information and highlighted source links, marking the company's most direct challenge to Google yet. The new search tool, named SearchGPT, will be released as a prototype web browser, offering users an independent search experience before being potentially integrated into ChatGPT. OpenAI has not provided a timeline for the rollout of SearchGPT but indicated that it would initially be accessible to users on a registration waitlist. The company is collaborating with creators and publisher partners to gather feedback on the new tool, intending to integrate the most successful search features into ChatGPT.
The EU's antitrust regulators are poised to impose a fine of up to $13.4 billion on Meta (META.US) for the first time. According to informed sources, Meta Platforms will face the initial antitrust fine from the EU within weeks due to the company's bundling of its classifieds service, Marketplace, with its Facebook social network. Over a year and a half ago, the European Commission accused the U.S. tech giant of gaining an unfair advantage by bundling its Facebook Marketplace classified ad service. The EU competition authority also claimed that Meta abused its dominant position, unilaterally imposing unfair trading conditions on online classified ad services advertising on Facebook or Instagram. Meta could face a fine as high as $13.4 billion, representing 10% of its global revenue for 2023, although EU penalties typically fall well below this cap.
Musk: Tesla (TSLA.US) +0.660 (+0.300%) board to discuss a potential $5 billion investment in xAI. Elon Musk stated that Tesla's board would discuss whether to invest $5 billion in his artificial intelligence startup, xAI. On Tuesday, Musk launched a poll asking X users if they supported the investment. After more than two-thirds of respondents voted in favor, Musk remarked that it seemed "the public is supportive." In the preliminary poll released on Tuesday, Musk noted that board approval and shareholder voting would be necessary before making the investment. Not long before the poll's release, Tesla reported disappointing profits for the fourth consecutive quarter. Musk was asked during the earnings call if the company would invest in xAI or integrate its chatbot, named Grok, into Tesla's software. Musk indicated that "Tesla has learned a lot from xAI," adding that it has advanced their full self-driving capabilities. He expressed his support for Tesla investing in xAI, contingent on shareholder approval.
Buffett sells Bank of America (BAC.US) +0.045 (+0.108%) stock for six consecutive days, reducing total holdings by $2.3 billion. Berkshire Hathaway, led by Warren Buffett, sold more shares of Bank of America this week, marking six consecutive trading days of reductions in its stake. A new regulatory filing revealed that Berkshire sold an additional 18.9 million shares at an average price of $42.46 on Monday, Tuesday, and Wednesday, realizing $802.5 million. Over the past six trading days, Berkshire has reduced its Bank of America holdings by 52.8 million shares, worth $2.3 billion, decreasing its ownership stake to 12.5%. Berkshire still holds 980.1 million shares of Bank of America, valued at $41.3 billion, significantly trailing its $172
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