Stocks plunged lower on Thursday, with the Dow Jones Industrial Average dropping nearly 500 points, as recession concerns returned to Wall Street. The broader market S&P 500 Index also fell 1.4%, while the tech-heavy Nasdaq Composite lost 2.3%.
Here's how the market settled on Thursday:
S&P 500 Index (NYSE: SPY): -1.37% or -75.62 points to 5,446.68
Dow Jones Industrial Average (NYSE: DIA): -1.21% or -494.82 points to 40,347.97
Nasdaq Composite Index (NASDAQ: QQQ): -2.30% or -405.26 points to 17,194.15
In Focus:
UBS Chief Investment Officer, Americas, Solita Marcelli wrote in a note on Thursday that a market pullback is likely on the horizon and investors should be prepared for short-term volatility.
"Market sentiment and positioning had become extended - making a pullback more likely. But market fundamentals remain positive, and we continue to expect the S&P 500 to recover and end the year higher at 5,900 versus the current 5,522," Marcelli wrote.
In Economic News:
Initial Unemployment Claims rose to their highest level since August 2023, the Labor Department reported Thursday, increasing by 14,000 to total 249,000 for the week ended July 27. Continuing claims, which are tracked a week behind, also increased to its highest level since November 2021 to 1.877 million.
On the Earnings Front:
Meta Platforms (NASDAQ: META) shares rose higher on Thursday following the social media giant's second-quarter revenue and profit beat and it's better-than-expected third quarter outlook. Notably, the company's advertising revenue rose 22% year-over-year, compared to rival Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) reported 11% as sales increase last week.
"We had a strong quarter, and Meta AI is on track to be the most used AI assistant in the world by the end of the year," said CEO Mark Zuckerberg in a statement. "We've released the first frontier-level open source AI model, we continue to see good traction with our Ray-Ban Meta AI glasses, and we're driving good growth across our apps."
For its third-quarter, Meta expects revenue between $38.5 billion to $41 billion. The company's full-year expense outlook remained unchanged at a range of $96 billion to $99 billion, while it narrowed its range for capital expenditures to $37 billion to $40 billion; its low was previously $35 billion.
Arm Holdings (NASDAQ: ARM) shares declined on Thursday after the chip-architecture maker issued disappointing forward guidance for its current quarter and full fiscal year despite its fiscal first-quarter results exceeding expectations.
"We previously considered the number of chips reported as shipped by our customers as a key performance indicator because it represented the acceptance of our products by companies who use chips in their products," CEO Rene Haas said in a letter to shareholders. "As we shift our focus to higher-value, lower-volume markets such as data center servers, AI accelerators and smartphone applications processors, the number of chips reported as shipped is less representative of our performance as the growth in royalty revenue is concentrated in a smaller number of chips."
For its fiscal second quarter, Arm expects adjusted earnings of $0.23 to $0.27 per share on revenue of $780 million to $830 million. The company also maintained its full-year forecast of $1.45 to $1.65 in adjusted earnings per share on $3.8 billion to $4.1 billion in revenue.
Moderna (NASDAQ: MRNA) shares dropped on Thursday after the biotech lowered its full-year sales guidance after its strong second quarter. The company now expects full-year product revenue in a range of $3 billion to $3.5 billion, below its prior outlook of $4 billion. Still, Moderna expects to return to sales growth in 2025 and break even by 2026, CEO Stephane Bancel told CNBC in an interview.
In Single-Stock News:
Morgan Stanley analyst Kristine Liwag raised the firm's price target for Boeing (NYSE: BA) following its announcement of aerospace veteran Kelly Ortberg becoming its next Chief Executive Officer earlier this week. The firm reiterated its rating of Equal Weight and increased its price target to $195 per aher, implying an over 2% upside from Wednesday's close.
"We continue to expect tactical volatility in Boeing's stock," Liwag wrote in a note to clients on Thursday. "Incrementally negative news flow on operations pressure stock performance and in periods where there are no new incremental negative news, investors typically focus on the Bull case."
For Friday:
All eyes will be on July's labor market report Friday morning for more clues on the Federal Reserve's next policy decision. Earnings reports from Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) are also due out after market close, alongside ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX) before market open.