Stock market indexes experienced a downward trend on Thursday, although they were off their session lows in afternoon trading. Investors were awaiting the release of the government’s jobless claims data, which showed a firm labor market. The Nasdaq composite fell 0.8%, but remained above the 13,000 level. The S&P 500 fell 0.7% but stayed above its 200-day moving average, while the Dow Jones Industrial Average increased its loss to 0.5%. The small-cap Russell 2000 was down 0.6% after a promising upside reversal the previous day. Volume on the NYSE and Nasdaq fell compared to Wednesday, with decliners outnumbering advancers.
Earlier in the day, first-time claims for unemployment benefits rose by 2,000 to 207,000, slightly lower than economists’ expectations. The increase in long Treasury yields following the news could lead to an earlier peak in short-term interest rates and an earlier pivot to rate cuts in 2024, according to Bill Adams, chief economist for Comerica Bank. The yield on the 10-year Treasury note initially jumped to 4.77%, but later retreated to 4.71% in afternoon trading.
The Energy Select Sector SPDR exchange traded fund fell 1% as the price of crude oil cooled off. U.S. crude fell 1.5% to $82.95 a barrel. Electric-vehicle company Rivian Automotive saw its stock price plummet by 19% after announcing plans to offer $1.5 billion of convertible debt and releasing preliminary revenue figures in line with expectations. Tesla’s stock price also reversed lower by 1%. Hyundai Motor, on the other hand, announced it would adopt the North American Charging Standard, allowing its vehicles in the North American market to access Tesla’s EV charging network.
Constellation Brands beat quarterly estimates and raised its outlook, but its stock lost over 3% in heavy volume due to a 14% drop in wines and spirits sales. Clorox plunged over 7% after warning of the negative impact from a cybersecurity attack over the summer and cutting its forecast for the September-ended quarter. Exxon Mobil fell 2.1% after reaching a sell signal, reporting that rising crude prices were expected to boost third-quarter profit while thinning margins in its chemicals business would offset some of these gains.
Lamb Weston, a maker of frozen potato products, jumped over 9% after beating earnings estimates for its August-ended quarter and raising its profit forecast for the full year. The stock gapped up above its 50-day moving average, making it the best-performing stock in the S&P 500 according to FactSet.
Investors are now eagerly awaiting the release of the employment report for September on Friday. The report, which is expected to show 160,000 new jobs, a dip in the unemployment rate to 3.7%, and steady wage growth at 4.3%, could significantly impact the stock market. The recent surge in the 10-year Treasury yield has already had a negative effect on stocks, with the Nasdaq down nearly 6% and the Russell 2000 losing almost 9% since the yield began to rise.