US stocks were little changed on Thursday after chipmaker Micron’s (MU) forecast dampened tech rally hopes as investors weighed new economic data ahead of the Federal Reserve’s key inflation reading.
The S&P 500 (^GSPC) embraced the flat line after rising on Wednesday to close near a new all-time high. The Dow Jones Industrial Average (^DJI) rose 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) oscillated between positive and negative territory.
Shares are struggling in the wake of Micron’s sales forecast for the current quarter, which met expectations but failed to satisfy investors looking for stellar outperformance from AI-related companies.
Optimism about artificial intelligence has helped lift the benchmark Standard & Poor’s 500 index up 15% this year. But concerns are growing that this rally could be in jeopardy if the handful of technology companies driving most of these gains stop beating already high expectations.
Shares of memory maker Micron fell more than 6% in early trading. Nvidia (NVDA) stock fell more than 2%, reviving fears of a return to the sell-off that rocked markets last week.
Investors were weighing a new batch of economic data ahead of Friday’s PCE inflation reading that will influence the Federal Reserve’s thinking on the timing of interest rate cuts.
The initial weekly jobless claims reading came in at 233,000, down 6,000 from the previous week. according to Labor Department data. The print came in below consensus expectations of 235,000. But repeat jobless claims rose to their highest level since late 2021, suggesting the unemployed are taking longer to find work.
Real GDP growth at an annual rate of 1.4% in the first quarter of 2024 Third estimate It was issued by the Office of Economic Development Thursday morning. The reading was slightly higher than the previous estimate of 1.3%.
Inflation could also loom large in the first debate between President Joe Biden and former President Donald Trump on Thursday night.
On the corporate front, shares of Levi Strauss ( LEVI ) fell more than 15% in the wake of a drop in second-quarter revenue for the jeans seller. Investors will look to Nike’s (NKE) quarterly results after the bell for further signs of consumer resilience.
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