Wall Street experienced a notable pause on Thursday, with both stocks and gold retreating from their recent record highs following a series of impressive gains. The Standard & Poor’s 500 index fell by 0.3%, marking its second decline in the last ten days after peaking at an all-time high. Meanwhile, the Dow Jones Industrial Average dropped by 243 points, or 0.5%, while the Nasdaq Composite saw a minor decrease of 0.1%. Gold prices also dipped, losing 2.4% and dropping below the $4,000 per ounce mark after a stellar rally earlier this year.
This retreat comes as financial markets have surged vigorously, with the S&P 500 climbing approximately 35% from its April low, raising concerns that prices may have escalated to unsustainable levels. The market frenzy has been particularly strong around stocks related to artificial intelligence, raising alarms about potential overvaluation.
One of the day’s biggest casualties was Dell Technologies, which experienced a 5.2% decline, despite previously enjoying an 11% surge earlier in the week due to positive commentary on its AI growth opportunities at an investment conference. Additionally, Tesla’s stock fell by 0.7% following a preliminary evaluation announcement by the National Highway Traffic Safety Administration concerning its “Full Self-Driving” system amidst safety concerns.
On a more positive note, Delta Air Lines reported better-than-expected profits for the summer, boosting its stock by 4.3%. The airline also issued an optimistic forecast for the final quarter of the year, a prediction that surpasses analysts’ expectations. Delta’s president, Glen Hauenstein, highlighted a significant increase in sales trends across various sectors, including domestic business travel.
These earnings reports are gaining importance as the U.S. government’s shutdown continues to postpone key economic data releases that typically inform market activity. This week marks the second consecutive week without the usual update on unemployment claims, a crucial indicator for Wall Street.
In other notable market movements, PepsiCo saw its shares rise by 4.2% after beating profit expectations due to improved momentum in its North American drinks segment. Akero Therapeutics surged by an impressive 16.3% after Novo Nordisk announced its intention to acquire the company, which could reach a total of $5.2 billion contingent on the approval of Akero’s lead product candidate.
MP Materials, a rare earths mining and processing company, saw its stock increase by 2.4% following China’s announcement of export curbs critical for various high-tech manufacturing processes. Costco Wholesale also gained 3.1% after reporting an 8% year-over-year revenue increase for September.
Overall, the S&P 500 closed down 18.61 points at 6,735.11, while the Dow Jones Industrial Average fell 243.36 to close at 46,358.42, and the Nasdaq Composite slipped 18.75 points to end at 23,024.63.
Across global markets, European indexes were mixed following a significant decline in Italy’s Ferrari, which tumbled 15.4% after releasing financial forecasts that fell short of analysts’ expectations. In Asia, stocks in Shanghai advanced 1.3% after trading resumed post-holiday, while Japan’s Nikkei 225 soared by 1.8%, buoyed by a strong performance from technology giant SoftBank Group, which surged 11.4% following a $5.4 billion acquisition deal of the robotics unit from Swiss firm ABB.
In the bond market, the yield on the 10-year Treasury saw a slight increase, edging up to 4.14% from 4.13% late the previous day.
