NEW YORK: US stocks ended lower on Thursday amid concerns over a possible policy tweak by the Bank of Japan (BoJ), as stocks erased early gains scored after a new report showed the US economy grew at a faster-than-expected pace in the second quarter, reported Xinhua.
The Dow Jones Industrial Average fell 237.40 points, or 0.67 per cent, to 35,282.72. The S&P 500 lost 29.34 points, or 0.64 per cent, to 4,537.41. The Nasdaq declined 77.18 points, or 0.55 per cent, to 14,050.11.
Ten of the 11 primary S&P 500 sectors ended in red, with real estate and utilities leading the laggards by going down 2.12 per cent and 1.73 per cent, respectively. Communication services bucked the trend by rising 0.85 per cent.
US stocks turned lower in afternoon trade on Thursday, with the Dow snapping a historic winning streak. The three major stock indexes trimmed early gains after a news report said the Bank of Japan will discuss tolerating higher domestic bond yields at a policy meeting on Friday.
The Bank of Japan is reportedly going to keep ultra-low interest rates on Friday but may make minor tweaks to extend the lifespan of its yield control policy programme, which sent US 10-year Treasury yields above 4 per cent, the biggest one-day climb since September.
It doesn’t take very much to cause a sell-off or a correction in “an already overbought” US stock market, said Quincy Krosby, chief global strategist for LPL Financial, in an interview with MarketWatch. “At some point something hits the headlines that grabs the market’s attention, and investors say let’s be more cautious, let’s pulled back -- that’s probably what’s going on right now.”
Before the momentum finally ran out in afternoon trade, the stock market initially benefitted from the latest batch of economic data on Thursday morning.
Second-quarter US gross domestic product (GDP) rose at a 2.4 per cent annual rate, according to the Commerce Department. That was up from a 2 per cent growth rate in the first quarter and stronger than market expectation of 1.8 per cent, suggesting the economic recovery gaining momentum in the spring.
“After yesterday’s resumption of interest rate hikes, it’s encouraging to see the aggressive hike cycle working as inflation continues to decline,“ said Steve Rick, chief economist at TruStage, in an interview with CNBC.
The GDP report has been accompanied by strong corporate earnings from big name companies.
Meta Platforms shares rose 4.40 per cent after reporting its highest quarterly sales growth since 2021. McDonald’s rose 1.18 per cent on stronger-than-expected profit, while Royal Caribbean Group gained 8.72 per cent, with the cruise operator reporting second-quarter results that beat analysts’ estimates.-Bernama