The U.S. stock market wavered Thursday following a mix of economic data that left investors speculating about future Federal Reserve moves.
The S&P 500 dipped 0.2%, continuing a minor pullback during an otherwise strong year. As of midday trading, the Dow Jones Industrial Average dropped 71 points (0.2%), and the Nasdaq composite slipped 0.3% after hitting record highs earlier in the week.
Economic Data Adds Uncertainty
Two key economic reports influenced trading sentiment. First, unemployment claims rose unexpectedly last week, signaling potential softening in the labor market. Second, wholesale inflation came in hotter than expected, raising concerns about price pressures.
“One week doesn’t negate a trend of strong labor market data,” said Chris Larkin, managing director at E-Trade from Morgan Stanley. However, he added that the Federal Reserve remains vigilant for signs of weakness.
Despite the reports, traders remain confident that the Fed will reduce its main interest rate at its upcoming meeting. A cut would mark the third consecutive reduction aimed at stabilizing the job market and maintaining inflation near the Fed’s 2% target.
Global Central Banks Follow Suit
The Federal Reserve isn’t alone in adjusting monetary policy. On Thursday, the European Central Bank reduced its rate by 0.25%, while the Swiss National Bank opted for a steeper 0.5% cut. The moves reflect growing concerns about economic uncertainty stemming from global trade tensions and shifting political landscapes.
Corporate Highlights
In corporate news, Adobe (NASDAQ:ADBE) fell 12.6% after issuing cautious guidance for the upcoming fiscal year, despite surpassing profit expectations this quarter. Meanwhile, Warner Bros. Discovery (NASDAQ:WBD) jumped 14.6% following a structural reorganization announcement, sparking speculation about potential spinoffs or sales.
Kroger (NYSE:KR) rose 3.3% as the company announced a $7.5 billion stock buyback program, replacing its prior $1 billion authorization. This comes after its planned merger with Albertsons was scrapped.
International Stock Market Movements
European markets were stable following the European Central Bank’s rate cut, while Asian markets showed stronger momentum. Hong Kong’s Hang Seng index rose 1.2%, and the Shanghai Composite gained 0.8%, buoyed by economic planning discussions in Beijing.
South Korea’s Kospi surged 1.6% for a third consecutive session of gains, recovering from recent political tensions.
Bond Market and Treasury Yields
In the bond market, U.S. Treasury yields edged higher. The 10-year yield rose to 4.31%, up from 4.27% the day before. The two-year Treasury yield, closely linked to Federal Reserve rate expectations, ticked up to 4.17%.
As mixed data leaves markets in flux, investors continue to monitor stock market trends and central bank decisions for direction. With global markets responding to economic and political shifts, the stock market’s resilience remains a focal point.
Featured Image: Megapixl @ Walstraasworld
