Markets Retreat After Three-Day Winning Streak
The S&P 500 ended a three-day rally on Thursday, slipping 0.21% to close at 5,937.34, as losses in big tech stocks weighed on the broader market. The Nasdaq Composite fell 0.89% to 19,338.29, while the Dow Jones Industrial Average declined 68.42 points (0.16%) to 43,153.13.
The pullback followed strong early gains, which were driven by solid corporate earnings from major banks. However, pressure from tech sector losses ultimately dragged markets lower.
Tech Stocks Lead the Decline
The downturn was driven by notable declines in major technology stocks:
- Apple fell 4%, marking its worst day since August 5.
- Tesla tumbled more than 3%.
- Nvidia slid nearly 2%.
- Alphabet (Google’s parent company) dropped around 1%.
Strong Earnings from Banks Fail to Lift Markets
Despite the overall market downturn, financial stocks saw some positive movement. Morgan Stanley exceeded earnings expectations, rising 4%, while Bank of America also beat estimates but slipped about 1%.
This follows strong fourth-quarter results from JPMorgan Chase and Goldman Sachs, which helped fuel a rally earlier in the week. So far, 77% of S&P 500 companies that have reported have beaten earnings expectations, according to FactSet.
Market Outlook: What’s Next?
Analysts suggest that while strong earnings from banks have supported the market, investors are looking for new catalysts to sustain momentum.
“There’s some heaviness and almost even exhaustion to this market, as we all try to give this bull market another leg to go and see what fuels the next upside moment,” said Keith Buchanan, senior portfolio manager at Globalt Investments.
Wall Street Coming Off Strongest Session Since November
Thursday’s declines followed a blockbuster session on Wednesday, when:
- The Dow climbed more than 700 points.
- The S&P 500 rose 1.8%.
- The Nasdaq surged 2.5%.
The rally was fueled by moderating inflation data and strong bank earnings, which boosted investor confidence.
Bond Market: Treasury Yields Pull Back
The 10-year U.S. Treasury yield, which had recently hit a 14-month high, pulled back, settling around 4.615%. Lower bond yields typically support growth stocks, but the tech sector still struggled amid profit-taking.
Investors Watching for New Market Drivers
With the earnings season off to a strong start, investors are now assessing whether corporate results and economic data will provide enough fuel for the market’s next leg higher.
While financial stocks have outperformed, tech sector weakness has raised questions about whether the broader market can sustain its bullish momentum in the coming weeks.
