Wall Street ended lower on Thursday (Friday AEST), as broad-based weakness across sectors overshadowed impressive quarterly earnings from tech giants Microsoft and Meta Platforms.
The Dow Jones Industrial Average dropped 330.3 points, or 0.7%, to finish at 44,131.0. The S&P 500 shed 23.5 points, or 0.4%, closing at 6,339.4 and marking a third consecutive decline. The Nasdaq Composite slipped just 7.2 points, or 0.03%, to end at 21,122.5.
The S&P 500 and Nasdaq touched intraday record highs earlier in the session before retreating.
The lacklustre session came despite strong earnings reports from two of the “Magnificent Seven” stocks.
Microsoft climbed 4% after the software giant revealed that its Azure cloud service generated more than US$75 billion in annual revenue.
Meta surged 11% after providing an upbeat forecast for third-quarter sales, topping market expectations. Microsoft’s results also pushed its market capitalisation above $4 trillion.
However, the broader market failed to sustain momentum, with nine of the 11 sectors in the S&P 500 ending in the red. Healthcare stocks were among the hardest hit, with UnitedHealth and Merck falling 6% and 4%, respectively, weighing heavily on the Dow.
Investor sentiment was dented by uncertainty surrounding the Federal Reserve’s policy path following this week’s meeting.
While the central bank held rates steady, traders were left questioning the likelihood of a rate cut in September, sparking a reassessment of market expectations.
Geopolitical tensions also contributed to the downbeat tone. Friday marks the deadline for the White House to impose sharply higher tariffs on key trading partners, including India and Brazil.
President Donald Trump confirmed that a pause on 25% tariff on Mexican imports would remain in place for another 90 days.
Offering a modicum of optimism, U.S. Treasury Secretary Scott Bessent said negotiations with China were progressing, stating both countries “have the makings of a deal”.
However, Bessent offered no timeline or specifics. The current truce on aggressive tariffs between the two nations is set to expire on 12 August.
Despite Thursday’s pullback, major benchmarks ended the month of July in positive territory.
The S&P 500 rose 2.2% for the month, its third consecutive positive monthly performance. The Dow added nearly 0.1%, while the Nasdaq led the pack with a 3.7% advance, marking its fourth straight winning month.
Investors are now looking ahead to earnings from Apple and Amazon, both scheduled to report after Thursday’s closing bell.
