Copyright cnbc
U.S. stocks fell on Thursday as investors digested a batch of Big Tech earnings, while a meeting between President Donald Trump and Chinese President Xi Jinping concluded. The S&P 500 dipped 0.99% to finish the day at 6,822.34, while the Nasdaq Composite dropped 1.57% to close at 23,581.14. The Dow Jones Industrial Average traded down 109.88 points, or 0.23%, to 47,522.12. Megacap tech giants Alphabet, Meta and Microsoft each reported quarterly results after market close Wednesday. While Alphabet shares popped 2.5% on the back of strong results, shares of Meta and Microsoft tumbled more than 11% and roughly 3%, respectively. Investors grew worried about the increased spending outlooks for both Meta and Microsoft. The drop in Meta and Microsoft, as well as artificial intelligence chip giant Nvidia, marked a rotation out of technology stocks in the session. While those were lower, bank stocks such as JPMorgan and Bank of America saw gains, as did health-care stocks on the heels of Eli Lilly’s stronger-than-expected quarterly results and guidance raise. Shares of Eli Lilly were up almost 4%. “It’s a value day,” Jed Ellerbroek, portfolio manager at Argent Capital Management, said in an interview with CNBC. Because tech has been leading the market recently, the move from investors is “probably a natural, healthy thing,” though “all signs remain that AI infrastructure spending is extremely strong,” he noted. Trade was also in focus after Trump agreed to cut fentanyl tariffs on China to 10%. That brings the overall levy on Chinese imports to 47% from 57%. As part of the deal, Beijing will work to stop fentanyl coming into the U.S. and buy American-grown soybeans along with other agricultural goods. China also delayed the latest curb on rare earth exports by a year. “Rare earth issue has been settled,” Trump said. To be sure, other areas such as the export of Nvidia chips and the TikTok divestiture remain unresolved. While China’s Ministry of Commerce said that the country is willing to work with the U.S. to “resolve issues related to TikTok,” the ministry didn’t provide any further details on the matter. “This is not at all over,” Ellerbroek said, adding, “The Trump-related trade volatility is going to remain a feature of our capital markets as long as he’s president. That’s my assumption, and yesterday’s result affirms that.” Along with Nvidia, other chip stocks like Broadcom and AMD were under pressure Thursday. Ellerbroek said that semiconductors are the “ball that’s being batted around” between the U.S. and China. “That’s just a feature of semiconductor investing. If you want that growth, if you want that data center capex cycle exposure, you have to subject yourself to the political volatility, and that’s just not going to go away,” he told CNBC. Wall Street was coming off a mixed day. The Dow, S&P 500 and Nasdaq notched fresh intraday highs earlier in Wednesday’s session, with the latter also scoring a new closing high. However, both the Dow and S&P closed in the red after Federal Reserve Chair Jerome Powell suggested the central bank may not cut interest rates again at its December meeting, which investors had been betting on.
