US Stocks Tumble On Economic, Geopolitical Concerns; Small Caps, Chipmakers Sink; Meta Rallies: What's Driving Markets Thursday?

Author: Piero Cingari | August 01, 2024 01:11pm

Markets experienced a sharp downturn, driven by heightened geopolitical tensions and economic uncertainties that negatively impacted investor risk sentiment, just a day after the Federal Open Market Committee (FOMC) meeting signaled a potential interest rate cut in September.

U.S. economic data released Thursday revealed a larger-than-expected rise in weekly jobless claims and a more pronounced contraction in manufacturing activity for July.

Initial unemployment claims increased to 249,000, up from 235,000 the previous week, marking the highest level in nearly a year. The ISM manufacturing PMI dropped to 46.8% in July, extending its contraction for the fourth consecutive month and reaching its lowest point since December 2023.

In geopolitical developments, Israel announced the elimination of Hamas’ military leader Mohammed Deif in a Gaza strike last month. This event followed the assassination of another top Hamas official in Tehran and the killing of Hezbollah’s commander in Beirut. Iranian officials are considering retaliatory measures against Israel, which has vowed to respond to any threats with force.

Amid rising risk aversion, Wall Street abruptly reversed prior session gains. The S&P 500 Index declined by about 1% in midday trading in New York, while the Nasdaq 100 fell by 1.5% due to another wave of semiconductor selloffs driven by disappointing corporate earnings reports.

The economically-sensitive Russell 2000 index plummeted over 3%, heading for its worst session since April.

Safe-haven assets gained traction, with both the U.S. dollar and Treasuries seeing increased demand. The U.S. dollar index (DXY), tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP), rose 0.3%, while long-term Treasuries, as represented by the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT), surged 0.7%.

Oil prices declined by 1.5% after a 4.4% surge the previous day, as investors focused on demand concerns amid weakening economic indicators. Bitcoin (CRYPTO: BTC) fell by 2.6%, trading at $62,900.

Thursday’s Performance In Major U.S. Indices, ETFs

Major Indices	Price	1-day chg. %
S&P 500	5,470.62	-0.9%
Dow Jones	40,335.79	-1.2%
Nasdaq 100	19,079.71	-1.5%
Russell 2000	2,190.02	-3.1%

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust (NYSE:SPY) was 0.9% lower to $546.13.
• The SPDR Dow Jones Industrial Average (NYSE:DIA) fell 1% to $404.23.
• The tech-heavy Invesco QQQ Trust Series (NASDAQ:QQQ) fell 1.5% to $464.25.
• The iShares Russell 2000 ETF (NYSE:IWM) fell 3% to $217.10.
• Sector-wise, the Real Estate Select Sector SPDR Fund (NYSE:XLRE) outperformed, rallying 1.3%, while the Technology Select Sector SPDR Fund (NYSE:XLK) lagged, down 2.2%.

Thursday’s Stock Movers

Stocks reacting to earnings were:

• American International Group Inc. (NYSE:AIG), down 7%,
• Arm Holdings plc (NASDAQ:ARM), down over 15%,
• Anheuser-Busch InBev SA/NV (NYSE:BUD), up 2.7%,
• Bausch Health Companies Inc. (NYSE:BHC), up 0.5%,
• Biogen Inc. (NASDAQ:BIIB), down 2.8%,
• Carvana Co. (NYSE:CVNA), up 8.3%,
• Cigna Group (NYSE:CI), down 4.8%,
• C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), up 14.3%,
• ConocoPhillips (NYSE:COP), down 1.8%
• Dominion Energy, Inc. (NYSE:D), up 2.8%,
• eBay Inc. (NASDAQ:EBAY) up 3%,
• EVgo, Inc. (NASDAQ:EVGO), down 2.3%,
• Everest Group Ltd. (NYSE:EG), down 6.8%,
• Hershey Company (NYSE:HSY), down 0.4%,
• Hertz Global Holdings, Inc. (NASDAQ:HTZ), down 2.5%,
• Lam Research Corp. (NASDAQ:LRCX), down 9%,
• Meta Platforms Inc. (NASDAQ:META), up 6%,
• Mobileye Global Inc. (NASDAQ:MBLY), down over 20%,
• Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), up 1.2%,
• Qualcomm Inc. (NASDAQ:QCOM), down over 8%,
• Sirius XM Holdings Inc. (NASDAQ:SIRI), down over 6%,
• Teladoc Health, Inc. (NYSE:TDOC), down over 5%,
• Wayfair Inc. (NYSE:W) down over 7%

Those reporting after the close include:

Amazon.com Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Beazer Homes USA, Inc. (NYSE:BZH), BigBear.ai Holdings, Inc. (NYSE:BBAI), Block, Inc. (NYSE:SQ), Booking Holdings Inc. (NASDAQ:BKNG), Cloudflare, Inc. (NYSE:NET), Clorox Company (NYSE:CLX), Coinbase Global, Inc. (NASDAQ:COIN), DraftKings Inc. (NASDAQ:DKNG), Intel Corporation (NASDAQ:INTC), Microchip Technology Inc (NASDAQ:MCHP), MicroStrategy Inc (NASDAQ:MSTR), Opendoor Technologies Inc. (NASDAQ:OPEN), RingCentral, Inc. (NYSE:RNG), Roku, Inc. (NASDAQ:ROKU), Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), Twilio Inc. (NYSE:TWLO) and United States Steel Corporation (NYSE:X).

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