US Stocks Mixed Ahead of Presidential Debate; Chipmakers Decline After Micron’s Earnings
Investing.com – U.S. stocks showed mixed performance on Thursday as investors processed a combination of economic data and disappointing guidance from chipmaker Micron, ahead of the first presidential debate.
At 09:40 ET (13:40 GMT), the Dow Jones Industrial Average dropped 20 points, or 0.1%, while the S&P 500 gained 8 points, or 0.2%, and the NASDAQ Composite increased by 55 points, or 0.3%.
Micron Falls on Weak Guidance, Other Chipmakers Follow
Investor sentiment took a hit after Micron Technology (NASDAQ), often seen as an industry bellwether due to its wide range of chip types and customer base, released its earnings report. Micron’s quarterly earnings surpassed market expectations thanks to strong AI demand, but its in-line revenue guidance disappointed investors hoping for more, especially since Micron’s stock had more than doubled in the past year. The stock fell over 5%.
Other chipmakers also saw declines, with notable drops in Nvidia (NASDAQ), Arm Holdings (NASDAQ), and Broadcom (NASDAQ).
Economic Data and Presidential Debate in Focus
Despite these losses, the overall market decline was modest as investors adopted a cautious stance ahead of key U.S. inflation data and the upcoming presidential debate. New orders for key U.S.-manufactured capital goods unexpectedly fell in May, indicating weakened business spending on equipment in the second quarter due to high borrowing costs.
Conversely, initial claims for U.S. unemployment benefits decreased last week, potentially easing concerns about significant labor market deterioration. However, the main focus remains on Friday’s release of the PCE price index, widely considered the Federal Reserve’s preferred measure of inflation.
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Markets Tense Before Presidential Debate
Markets were also on edge ahead of the first presidential debate of the year, set for Thursday evening between Democratic incumbent Joe Biden and Republican candidate Donald Trump.
Levi Strauss, Walgreens Boots Slump
In other corporate news, Nike (NYSE) is set to release its latest earnings after market close. Walgreens Boots Alliance (NASDAQ) saw its stock fall 22% after the pharmacy chain reduced its fiscal 2024 guidance due to a worse-than-expected retail environment and announced plans to close more stores as part of a strategic review.
Levi Strauss (NYSE) stock slumped 14% after the jeans manufacturer reported lower-than-expected fiscal second-quarter revenue, impacted by sluggish demand for its Dockers brand. McCormick (NYSE) stock rose 4.4% after the spice maker exceeded market expectations for second-quarter profit and sales, driven by strong demand for its spices and seasonings in Europe, the Middle East, and Africa.
International Paper (NYSE) stock fell 8.9% after Bloomberg reported that Suzano is no longer pursuing a takeover of the paper and packaging group, with the Brazilian pulp giant reportedly reaching its maximum price.
Crude Rebounds After US Inventories Build
Crude prices bounced back on Thursday, recovering from early losses following a surprising increase in U.S. stockpiles. By 09:40 ET, U.S. crude futures (WTI) were 0.8% higher at $81.55 per barrel, while the Brent contract climbed 0.8% to $85.11 per barrel.
The U.S. Energy Information Administration reported a 3.6 million barrel increase in the country’s crude oil stocks last week, disappointing a market that had expected a draw of 2.6 million barrels. More worrying was a 2.7 million barrel build in gasoline inventories, indicating that fuel consumption remained weak even at the start of the travel-heavy summer season.
