US stocks wobbled on Thursday after chipmaker Micron’s (MU) outlook put a dent in tech-rally hopes, as investors assessed fresh economic data ahead of an inflation reading key to Federal Reserve policy.
The S&P 500 (^GSPC) was little changed after rising Wednesday to close not far short of a new all-time high. The Dow Jones Industrial Average (^DJI) slipped 0.1%, while the tech-heavy Nasdaq Composite (^IXIC) was also flat.
Stocks are struggling in the wake of Micron’s sales forecast for the current quarter, which met expectations but failed to satisfy investors looking for stellar outperformance from AI-linked companies.
Bullishness around AI has helped lift the benchmark S&P 500 to a 15% gain this year. But concerns are growing that the rally could be at risk if the handful of tech companies driving most of those gains stop topping already lofty expectations.
Memory maker Micron’s shares slid more than 4% in early trading. Nvidia (NVDA) was down about 1%, reviving worries of a return to the sell-off that rattled markets last week.
Investors were weighing a new batch of economic data ahead of the PCE inflation print on Friday that will influence the Fed’s thinking on timing of interest-rate cuts.
A reading on initial weekly jobless claims came in at 233,000, a decrease of 6,000 from the previous week, according to Department of Labor data. The print came in below a consensus expectation of 235,000. But recurring jobless claims rose to their highest since late 2021, suggesting it’s taking longer for unemployed people to find a job.
Real gross domestic product (GDP) increased at an annual rate of 1.4% in the first quarter of 2024, according to the third estimate by the Bureau of Economic Development released on Thursday morning. The print was slightly higher than the prior estimate of 1.3%.
Inflation could also loom large in the first debate between President Joe Biden and former President Donald Trump on Thursday night.
On the corporate front, Levi Strauss (LEVI) shares sank over 15% in the wake of a second-quarter revenue miss for the jeans seller. Investors will look to Nike’s (NKE) quarterly results after the bell for more clues to consumer resilience.
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