The U.S. stock market experienced a decline on Thursday, retreating from previous record highs amid mixed signals stemming from ongoing U.S.-China trade negotiations and earnings reports from major tech companies. The S&P 500 fell 1%, moving further away from its all-time peak established on Tuesday. The Dow Jones Industrial Average decreased by 109 points, or 0.2%, while the Nasdaq composite experienced a more pronounced drop of 1.6% from its record the day prior.
International markets reflected a similar caution following a highly publicized meeting between U.S. President Donald Trump and Chinese President Xi Jinping. Trump characterized the discussions as a “12” on a scale of zero to ten and announced intentions to reduce tariffs on China. However, despite these gestures, substantial tensions remain unresolved between the two nations. Brian Jacobsen, chief economist at Annex Wealth Management, noted that while the outcomes were satisfactory, they fell short of the high expectations that had been set.
Prominent tech stocks were notably affected. Meta Platforms saw its shares plummet by 11.3%, cutting into a significant yearly gain of 28.4%. Investors appeared troubled by the company’s projected rising expenditures for 2026 amid ongoing investment in artificial intelligence. Microsoft also faced challenges, sliding 2.9% despite reporting stronger than expected quarterly profit and revenue. Analysts expressed concern over the company’s elevated spending forecasts and a slight slowdown in growth for its Azure cloud business.
On a more positive note, Alphabet, Google’s parent company, experienced a 2.5% increase in share value as it significantly surpassed profit and revenue expectations.
These fluctuations in major tech stocks are critical since Alphabet, Meta, and Microsoft represent approximately 14.5% of the S&P 500’s total market value, underscoring their influence on broader market trends.
In the restaurant sector, Chipotle Mexican Grill saw a sharp decline of 18.2% after signaling that economic pressures are affecting customer spending, particularly among younger demographics and lower-income households. CEO Scott Boatwright highlighted the challenges facing consumers, including rising unemployment rates, student loan repayments, and slower wage growth relative to inflation, which has prompted many to dine out less frequently.
Conversely, Eli Lilly experienced a positive turnaround, with shares rising 3.8% after reporting better-than-expected profits, attributed to robust sales of its diabetes and obesity medications Mounjaro and Zepbound.
Overall, the S&P 500 closed down 68.25 points at 6,822.34, the Dow Jones Industrial Average fell 109.88 points to 47,522.12, and the Nasdaq composite decreased by 377.33 points to 23,581.14.
In the bond market, Treasury yields remained steady as investors moderated expectations concerning a potential interest rate cut by the Federal Reserve in December. Despite current speculation suggesting a possible cut, Fed Chair Jerome Powell recently clarified that such a decision is “far from a foregone conclusion.” The yield on the 10-year Treasury held at 4.08%, an increase from the previous day’s figure.
Internationally, European markets dipped slightly, while the Tokyo Nikkei 225 managed a marginal increase following respective decisions by the European Central Bank and the Bank of Japan to maintain interest rates.
Despite the day’s challenges, the ongoing developments in trade negotiations and corporate earnings reflect a complex yet resilient market landscape, signaling potential avenues for recovery and stability in the near future.