The S&P 500 Index closed down 0.18% on Thursday, with the Dow Jones Industrial Average and Nasdaq 100 Index declining 0.85% and 0.39%, respectively. This drop followed escalating tensions in the Middle East, which caused crude oil prices to rise over 2%, further heightening inflation concerns. The yield on the 10-year T-note increased by 5 basis points, reaching 4.66% amid worries that the Federal Reserve may need to increase interest rates.
Significant losses were observed in the technology sector, highlighted by Datadog’s 18% plunge after reporting disappointing gross margins. Conversely, some companies reported better-than-expected earnings, including Motorola Solutions, which posted Q2 net sales of $3.13 billion, above estimates of $3.00 billion. Initial unemployment claims in the U.S. rose slightly to 199,000, better than the anticipated 205,000, adding complexity to the Fed’s rate hike outlook, which now shows a 58% chance of a 25 basis point increase at the September FOMC meeting.
In international markets, the Euro Stoxx 50 increased by 0.39%, reaching an all-time high, while the Shanghai Composite rose by 0.57%. In Japan, the Nikkei-225 fell by 0.93%. Economic indicators reflected mixed performance, with Eurozone retail sales declining by 0.3% month-over-month, contrary to expectations of a 0.1% increase.
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