U.S. stocks on Thursday erased their gains and had slipped into negative territory, as some cautious commentary from a slew of Federal Reserve speakers offset a boost provided by signs of cooling in the labor market and a rise in megacap names.
Market participants are also looking ahead to a key nonfarm payrolls report on Friday.
The Nasdaq Composite (COMP:IND) was last down 0.24% to 16,238.68 points in afternoon trade, having erased an advance of as much as 1.15%. The tech-heavy index earlier got a bump from Meta Platforms (META). The Facebook-parent’s stock scaled a record high after Jefferies predicted that the company could see its best year ever in 2024 partly due to generative artificial intelligence.
The benchmark S&P 500 (SP500) had reversed course and was now lower by 0.42% to 5,189.74 points. It had climbed as much as 0.82%. The blue-chip Dow (DJI) was also in the red, falling 0.59% to 38,894.58 points.
Of the 11 S&P sectors, nine were now in the red.
Markets had risen in the morning and through mid-day following the release of two labor market indicators before the opening bell.
Firstly, data from Challenger, Gray & Christmas showed that U.S.-based employers announced 90,309 job cuts in March, a 7% acceleration from February. Then, the number of Americans filing for initial jobless claims in the past week increased to 221K, compared to a consensus of 213K.
The readings pointed to some signs of cooling in what has been a highly stubborn labor market. Recent data has only reinforced that resilience, and coupled with sticky inflation has complicated the Federal Reserve’s plans for interest rate cuts.
However, comments from some Fed speakers have put equities under pressure, with the three major averages moving lower from around 1400 ET onwards. Minneapolis Fed President Neel Kashkari, speaking at a virtual question and answer session, said that more progress on inflation was needed to be seen before cutting interest rates. He further cautioned that it was possible the Fed might not deliver cuts if inflation stalled.
Meanwhile, Cleveland Fed President Loretta Mester at an event also said that more evidence was needed that inflation was coming down. Additionally, Chicago Fed President Austan Goolsbee echoed Mester and Kashkari’s messaging, and said that policymakers want to be more convinced that inflation was moving towards their 2% target.
Fed chair Jerome Powell on Wednesday at an event in Stanford, Calif. said that recent hotter-than-anticipated data on the labor market and inflation did not “materially change” an overall scenario of deceleration inflation and anticipated rate cuts.
Turning to the fixed-income markets, Treasury yields were largely lower on Thursday. The 30-year (US30Y) and 10-year yields (US10Y) were both down 2 basis points each to 4.49% and 4.34%, respectively. The shorter-end more rate-sensitive 2-year yield (US2Y) was up 1 basis point to 4.69%.
See live data on how Treasury yields are doing across the curve at the Seeking Alpha bond page.
Looking at active stocks, Conagra Brands (CAG) was among the top percentage gainers on the S&P 500 (SP500). The company, which owns brands such as Slim Jim, Duncan Hines and Swiss Miss, delivered a quarterly profit beat on the back of a growing trend among U.S. consumers to eat at home.
Conversely, Lamb Weston (LW) tumbled and was the top S&P percentage loser. The frozen potato giant reported a quarterly top and bottom line miss due to a greater-than-expected impact of a transition to a new enterprise resource planning system in North America.
Ford (F) had given up its gains and had turned lower. The carmker announced plans to delay the launch of its three-row electric vehicles to 2027 and instead focusing on its hybrid vehicles.
