NEW YORK – Stock indexes in Wall Street remained relatively stagnant in Thursday afternoon trading as investors anticipated a crucial report on inflation. The S&P 500 saw a slight 0.1% decline, with a mix of both gaining and losing stocks in the index. The Nasdaq, just below its all-time high, experienced a 0.2% increase, while the Dow Jones Industrial Average slipped marginally by 8 points.
Walgreens Boots Alliance encountered a significant 25.2% drop, marking the most substantial decline in the S&P 500. This drop came after the company’s financial results fell short of expectations, prompting them to revise their outlook and announce potential store closures in the upcoming years. Levi Strauss, a well-known jeans maker, also faced a 16.6% decline due to lower-than-projected revenue and earnings forecasts. In contrast, spice maker McCormick saw a 4.7% rise in its stock value after surpassing analysts’ earnings predictions.
Meanwhile, chipmaker Micron witnessed a 5.9% drop following disappointing projections for the future. In the bond market, Treasury yields fell, with the 10-year Treasury yield decreasing from 4.33% to 4.28%, and the two-year Treasury yield dropping from 4.75% to 4.72%.
Recent government data revealed that the American economy expanded at a 1.4% annual rate in the first quarter of the year, slightly revised from the initial estimate of 1.3%. This slower growth reflects the impact of persistent inflation and high interest rates, leading to cautious consumer spending and private sector demand cooling down. Economists, including Gregory Daco, Chief Economist at EY, highlighted the resilience of the economy despite signs of moderation in consumer activity.
The upcoming influential inflation report on Friday has kept the stock market subdued, as analysts eagerly await the release of the latest personal consumption expenditures index (PCE), the Federal Reserve’s preferred inflation measure. Expectations suggest a slight decrease in inflation to 2.6% in May from the previous month, aligning with a gradual decline from the peak of 7.1% recorded in 2022. These developments will influence the central bank’s decision on interest rates, with market expectations leaning towards a rate cut at the September meeting to address the economic impact caused by high rates.