Wall Street showed signs of stability on Thursday following a significant decline in major technology stocks, marking the worst day for the sector since 2022. In early trading, the S&P 500 rose 0.2%, and the Nasdaq composite increased by 0.6%, while the Dow Jones Industrial Average slipped by 58 points, or 0.1%. Nvidia saw a recovery, gaining 2.5% after a sharp 6.6% decline the previous day. Conversely, Domino’s Pizza plummeted 11.4% after suspending its forecast for global store openings, and Chuy’s surged 48% following news that Darden Restaurants would acquire the Tex-Mex chain. Treasury yields fluctuated in response to mixed economic data but remained slightly higher.
Premarket Trading and Key Movements
Mixed Premarket Performance:
Premarket trading showed varied results. Futures for the Dow Jones Industrial Average dipped 0.2%, while S&P 500 futures increased by 0.2%. The tech-heavy Nasdaq, rebounding from its worst day since 2022, climbed 0.4%.
Domino’s Pizza Decline:
Domino’s Pizza fell over 10% as the company adjusted its expectations for store openings this year, affected by challenges faced by its major franchisee, Domino’s Pizza Enterprises.
Chuy’s Acquisition:
Shares of Chuy’s soared 47% after Darden Restaurants announced its $605 million acquisition of the Tex-Mex chain. Darden, which owns brands like Olive Garden and LongHorn Steakhouse, saw its shares fall slightly by less than 1% before the market opened.
United Airlines Performance:
United Airlines experienced a 1.5% rise after surpassing second-quarter profit expectations, although the airline lowered its third-quarter guidance but maintained its full-year forecast.
European Market Activity
In Europe, the focus was on the European Central Bank’s meeting. Analysts anticipated that the central bank would keep its key interest rate steady at 3.75% to ensure inflation is controlled before considering a rate cut. By midday, France’s CAC 40 was up 0.5%, Germany’s DAX edged up 0.2%, and Britain’s FTSE 100 gained 0.6%.
Asian Market Reactions
Japan’s Market Impact:
Japan’s Nikkei 225 index fell by 2.4% to 40,126.35, influenced by reports of potential severe trade restrictions from the U.S. on advanced semiconductor technology exports to China. This news led to significant drops in tech-related shares, with Tokyo Electron plummeting 8.8%, Advantest falling 4.9%, and Lasertec dropping 6.3%.
Currency Fluctuations:
The yen strengthened, raising concerns for Japanese exporters like Toyota. The U.S. dollar increased to 156.46 yen from 156.19 yen, while the euro slightly declined to $1.0929 from $1.0941.
Other Asian Markets:
Hong Kong’s Hang Seng gained 0.2% to 17,778.41, and the Shanghai Composite index rose 0.5% to 2,977.13. Investors awaited policy updates from a high-level meeting of the ruling Communist Party in Beijing. Australia’s S&P/ASX 200 fell 0.3% to 8,036.50, South Korea’s Kospi declined 0.7% to 2,824.35, and Taiwan’s Taiex dropped 1.6%, with TSMC sinking 2.4% after an 8% loss in U.S. trading.
Energy Market Update
In energy trading, benchmark U.S. crude fell 14 cents to $82.71 a barrel, and Brent crude, the international standard, decreased by 19 cents to $84.89 a barrel.
Wednesday’s Wall Street’s Recap
On Wednesday, the S&P 500 fell by 1.4% to 5,588.27, and the Nasdaq composite dropped 2.8% to 17,996.92, impacted by losses in major tech stocks like Nvidia and Apple. The Dow Jones Industrial Average, however, increased by 0.6%, closing at a record high of 41,198.08.
Featured Image: Freepik @ wirestock
