The S&P 500 ended nearly flat on Thursday as a decline in Microsoft offset gains in Meta Platforms, while uncertainty over the Middle East pushed oil prices and Treasury yields higher, Reuters reported.
The S&P 500 and Nasdaq recovered from their session lows after Reuters reported that US and Iranian negotiators were exploring a phased path to ending the war. The proposed plan would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran.
US and Iranian leaders traded barbs this week at the UN General Assembly. Brent crude climbed about 4% to $107 a barrel after a Houthi missile attack on Saudi Arabia revived concerns about supply disruptions.
“This just reinforces the view that we’re dealing with one major market catalyst right now,” Bill Northey, senior investment director at US Bank Wealth Management, told Reuters. “It’s really all about oil and inflation and the effect on interest rates, and then the interest rate cascading across the capital markets.”
Major AI stocks were mixed. Microsoft and Broadcom fell about 1%, while Advanced Micro Devices gained 1%.
Meta Platforms rose 3.4%, a day after the social media company unveiled a small handheld device designed for use with its recently launched AI assistant.
Oracle dropped 4.1% after a report said the company had issued a “force majeure” notice concerning a New Mexico data center. Blue Owl, the project’s developer, fell 5%.
Treasury yields climbed, with the 30-year bond yield reaching its highest level since 2004.
Meanwhile, the S&P 500 lost 2.20 points, or 0.03%, to end at 7,703.83 points, while the Nasdaq Composite gained 1.76 points, or 0.01%, to 26,937.79. The Dow Jones Industrial Average fell 162.41 points, or 0.32%, to 51,349.18.
The S&P 500 has traded just below 19 times expected earnings this week, its lowest valuation since 2023, according to LSEG data. AI-related heavyweights have accounted for much of the recent increase in earnings expectations.
US President Donald Trump welcomed Chinese President Xi Jinping to the White House for a summit expected to be rich in symbolism but offer limited substance on issues including AI, trade, Taiwan and the Middle East war.
Data released on Wednesday pointing to strong business activity strengthened expectations that the Federal Reserve could raise interest rates again after last week’s 25-basis-point increase. Traders are pricing in a nearly 70% chance of another hike next month, according to the CME FedWatch Tool.
New York Fed President John Williams, a voting member of the Federal Open Market Committee, said on Thursday that it was reasonable to expect the central bank might need to raise rates again before the end of the year.
MGM Resorts tumbled 11% after media mogul Barry Diller’s People Inc. withdrew its proposal to acquire the casino operator.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
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