US stocks were little changed on Thursday after chipmaker Micron’s (MU) forecast dampened tech rally hopes as investors weighed new economic data ahead of the Federal Reserve’s key inflation reading.
The S&P 500 (^GSPC) embraced the flat line after rising on Wednesday to close near a new all-time high. The Dow Jones Industrial Average (^DJI) rose 0.2%, while the Nasdaq Composite (^IXIC) fell slightly.
Shares are struggling in the wake of Micron’s sales forecast for the current quarter, which met expectations but failed to satisfy investors looking for stellar outperformance from AI-related companies.
The bullish trend around artificial intelligence has helped lift the S&P 500 to a 15% gain this year. But concerns are growing that the rally could be in jeopardy if the group of technology companies driving most of these gains stops beating already high expectations.
Shares of memory card maker Micron fell more than 6% in early trading. Nvidia (NVDA) shares fell by more than 2%, raising fears of a return to the selling wave that shook the markets last week.
Investors were weighing a new batch of economic data ahead of Friday’s PCE inflation reading that will influence the Federal Reserve’s thinking on the timing of interest rate cuts.
The initial weekly unemployment claims reading came in at 233,000, a decrease of 6,000 from the previous week. according to Ministry of Labor data. The printing came in below the consensus forecast of 235,000. But recurring unemployment claims rose to their highest levels since late 2021, suggesting that the unemployed are taking longer to find a job.
Real GDP growth at an annual rate of 1.4% in the first quarter of 2024 Third estimate The Bureau of Economic Development released the reading on Thursday morning. The reading was slightly higher than the previous estimate of 1.3%.
Inflation could also loom large in the first debate between President Joe Biden and former President Donald Trump on Thursday night.
On the corporate front, shares of Levi Strauss ( LEVI ) fell more than 15% in the wake of a drop in second-quarter revenue for the jeans seller. Investors will look to Nike’s (NKE) quarterly results after the bell for further signs of consumer resilience.
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