Wall Street’s main indexes were mixed on Thursday, with the S&P 500 and the Nasdaq rising, as investors assessed a slew of mixed corporate results and monitored developments in U.S.-China trade war.
The White House on Wednesday indicated that it was open to reducing sweeping tariffs on China, and President Donald Trump stepped back from his attacks on Federal Reserve Chairman Jerome Powell, sending stock indexes higher.
But the optimism faded when Treasury Secretary Scott Bessent said a move to reduce levies would not come unilaterally, while China said in response that the U.S. should lift all unilateral tariff measures against China if it “truly” wanted to solve the trade issue.
A deluge of changing headlines and the lack of clarity in the market are making it difficult for investors to assess the impact of Trump’s changing stance on trade policy, creating a volatile environment.
“The tariffs are still having a powerful effect on sentiment and the Trump administration is vacillating between backing away from the full implementation and going forward,” said Matt Gertken, chief strategist at BCA Research.
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“The administration backtracking tells markets that the strategy is to implement tariffs, but not to cause a recession, as long as that’s the case, then the trade war will be a sort of a two steps forward, one step back process.”
At 09:37 a.m. ET, the Dow Jones Industrial Average fell 160.28 points, or 0.40%, to 39,446.29, the S&P 500 gained 5.59 points, or 0.10%, to 5,381.45 and the Nasdaq Composite gained 68.60 points, or 0.41%, to 16,776.65.
Heavy-weight megacap and growth stocks buoyed the tech-heavy Nasdaq and countered losses on the benchmark S&P 500, with the sector leading gains.
International Business Machines slumped 8.2% after the company said 15 of its government contracts were shelved under a cost-cutting drive by the Trump administration, while Proctor & Gamble was down 3.7% after cutting annual profit forecasts.
These declines weighed heavily on the blue-chip Dow.
Economic data, however, helped recover some sentiment. Reports showed a moderate rise in weekly jobless claims and a much larger-than-expected jump in March orders for durable goods.
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Escalating trade tensions and a worries of an economic slowdown in the U.S., alongside concerns over the threats to the independence of the central bank have caused investors to exit U.S. equities.
All three major indexes are in the red year-to-date and the S&P 500 is down over 12% from its February record high. Deutsche Bank on Thursday slashed its year-end target for the benchmark index to 6,150 from 7,000 previously.
Alaska Airlines fell 10.6% after withdrawing financial forecasts. Southwest Airlines reversed premarket losses to gain 2.4%.
Software firm ServiceNow, on the other hand, leapt 13.2% after beating first-quarter profit estimates.
Alphabet is set to report after the closing bell.
Minneapolis Fed President Neel Kashkari is also scheduled to speak later in the day.
Advancing issues outnumbered decliners by a 1.66-to-1 ratio on the NYSE and by a 1.38-to-1 ratio on the Nasdaq.
The S&P 500 posted one new 52-week high and one new low, while the Nasdaq Composite recorded 11 new highs and 19 new lows.
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