Update at 4:29 PM EDT by Rob Lenihan
Stocks finished lower Thursday as investors braced for a key series of economic and inflation data amid the worst week for global stocks in more than a month.
The Dow Jones Industrial Average tumbled 330.06 points, or 0.86%, to 38,111.48, while the S&P 500 slipped 0.6% to close at 5,235.48 and the tech-heavy Nasdaq lost 1.08% to 16,737.08.
Salesforce shares nosedived after the cloud-based software company issued a muted sales outlook following a mixed first-quarter earnings report.
In economic news, real gross domestic product accelerated at a 1.3% annualized rate in the first quarter, down from the initial 1.6%, the U.S. Commerce Department reported.
"Momentum is slowing as consumers struggle with lingering inflation pressures," said Jeffrey Roach, chief economist for LPL Financial. "A bright spot in the macro landscape is business investment as firms continue to invest in new technologies."
Roach added that "we should expect inventory investment to have a small rebound in the current quarter and investors should expect slower momentum in consumer spending to continue throughout the balance of 2024."
Updated at 1:06 PM EDT
HP AI boost
HP Inc (HPQ) are yet another big-name stock with a massive post-earnings move Thursday, with shares rising more than 20% following a better-than-expected second quarter update from the computer and peripherals maker.
HP said it sees fiscal 2024 earnings in the region of $3.30 to $3.60 per share, a five cent bump from its prior forecast, after it reported a 3% climb in notebook and desktop computer sales for the three months ending in April. AI-powered models, HP said, will add even more heft to second-half revenues.
HP shares were last marked 19.4% higher in mid-day trading and changing hands at a two-year high of $39.12 each.
Updated at 12:13 PM EDT
Inflation hope
New York Fed president John Williams added his voice to the chorus of officials waiting for further confirmation on inflation before committing to rate cuts, but offered a glimmer of optimism to investors heading into tomorrow's PCE report.
"With the economy coming into better balance over time and the disinflation taking place in other economies reducing global inflationary pressures, I expect inflation to resume moderating in the second half of this year," Williams said in prepared remarks at and event held by the Economic Club of New York.
Treasury yields eased further following William's speech, with 10-year notes pegged at 4.55% and 2-year notes trading at 4.931%.
Related: The bond market is freaking out about inflation. It could be very wrong.
Updated at 10:53 AM EDT
Best buy, now
Best Buy (BBY) shares powered sharply higher in early trading after the electronics retailer, and key Apple (AAPL) re-seller, posted stronger-than-expected first quarter earnings and issued robust near-term sales forecast.
CEO Corrie Barry, meanwhile, noted the new AI-powered laptops from Microsoft (MSFT) , as well as higher-priced TVs, will help the group return to growth into the second half of the year.
Best Buy shares were marked 11% higher at $79.78 each, a move that nudges the stock into positive territory for the year.
Minnesota's 3rd finest business, $BBY decent eps. Light revs, -6% comps. BBY was the first chain to really flag Shrink, years ago. Bn theft and COVID the stores are ghost-towns. Basically on-line order fulfillment spots.
— Jeff Macke (@JeffMacke) May 30, 2024
Holy crap do these guys need a new wave of affordable "AI… pic.twitter.com/QeG0gl980O
Updated at 9:43 AM EDT
Lower open
The S&P 500 was marked 13 points, or 0.25% lower in the opening minutes of trading, while the Dow slumped 322 points, with around all of the decline tied to the 17.8% slump in Salesforce shares.
Benchmark 10-year note yields were last pegged at 4.572% while 2-year notes eased to 4.939% following the soft GDP and inflation data.
S&P 500 Opening Bell Heatmap (May 30, 2024)$SPY -0.29% 🟥$QQQ -0.25% 🟥$DJI -0.78% 🟥$IWM +0.82% 🟩 pic.twitter.com/Kguf3bpoWD
— Wall St Engine (@wallstengine) May 30, 2024
Updated at 8:37 AM EDT
Slowdown warning
The Commerce Department revised its second estimate for first quarter GDP growth lower, to 1.3% from 1.6%, the lowest since the second quarter of 2022, while noting that core inflation pressures eased modestly over the three months ending in March.
At the same time, the Labor Department said new applications for jobless claims rose by 3,000 last week, to 219,000, a level edges the four-week average by 2,500 to 222,500.
Stocks pared some of their earlier declines on the data releases, with the S&P 500 now called 11 points lower and the Dow priced for a 300 point decline.
Benchmark 10-year Treasury note yields eased to 4.576% while 2-year notes slipped to 4.951% on the muted inflation pressures.
❖ U.S GDP PRICE INDEX (QOQ) (Q1) ACTUAL: 3.1% VS 1.7% PREVIOUS; EST 3.1%
— *Walter Bloomberg (@DeItaone) May 30, 2024
❖ U.S CORE PCE PRICES (Q1) ACTUAL: 3.60% VS 2.00% PREVIOUS; EST 3.70%
Stock Market Today
A sharp move higher in Treasury yields, tied to renewed inflation risks and a wave of fresh supply, pulled stocks lower Wednesday, with the S&P 500 finishing 0.74% in the red and the Dow extending its one-week slump to just over 1,400 points.
The Treasury's third coupon auction of the week, a $44 billion sale of 7-year notes, drew weak foreign and domestic demand as yields on the paper surged, taking 10-year notes to 4.594%, the highest in more than a month.
Related: Bond markets sound inflation alarm, testing stocks rally
Bond markets will also face a massive wave of new supply next month, with around $340 billion in new debt issued by the U.S., Europe and the U.K., according to BNP Paribas data.
That's added to pressure on stocks, which have been trading without the benefit of top-tier corporate earnings headlines as investors look to today's release of revised first quarter GDP data and tomorrow's reading of the Federal Reserve's preferred inflation gauge, the PCE Price Index.
On Wall Street, futures contracts tied to the S&P 500, which is still up 4.6% for the month, are priced for an 17 point opening-bell decline ahead of both the revised GDP data release and weekly jobless claims figures at 8:30 a.m. U.S. Eastern time.
Futures linked to the Dow suggest a 330 point slump, although a large portion of that is tied to the 16% plunge in Salesforce (CRM) , which issued a muted sales outlook following a mixed first quarter earnings report. The Nasdaq, meanwhile, is called 40 points lower.
Other stocks on the move include PayPal (PYPL) , which jumped 2.4% following an upgrade for the online payments group from Mizuho; and AI software group UiPath (PATH) , which plunged 30% following a disappointing first-quarter earnings update.
Foot Locker (FL) shares surged 13.7% after the athletic footwear retailer posted stronger-than-expected first quarter earnings and a big year-on-year decline in overall inventories.
Kohl's (KSS) shares, on the other hand, tumbled more than 21% to 21.42 each after the department store chain posted a surprise first quarter loss amid what CEO Tom Kingsbury called "ongoing uncertainty in the consumer environment".
Costco (COST) shares were marked 0.3% higher in premarket trading ahead of the bulk discount retailer's fiscal-third-quarter report after the close of trading.
Related: Fed rate cuts face big reset on renewed inflation risks
In overseas markets, Europe's Stoxx 600 edged 0.3% higher in Frankfurt while Britain's FTSE 100 rose 0.23% in London on interest-rate-cut hopes from their respective central banks.
More Wall Street Analysts:
- Analyst unveils new Nike price target ahead of big summer for sports
- Analysts weigh in on Google-parent Alphabet’s stock after cloud event
- Analysts revamp Disney stock price target after proxy fight
Overnight in Asia, the selloff on Wall Street pulled the Nikkei 225 into a 1.3% decline, its third straight day of losses and the lowest closing level since April 26.
The regionwide MSCI ex-Japan benchmark, meanwhile, was marked 1.25% lower into the close of trading.
Related: Veteran fund manager picks favorite stocks for 2024
