After the two-day rally, the S&P 500 declined 0.08% on Thursday morning as investors pulled back from their approach toward record levels set earlier in the week. Investors drove up stock prices when they believed Trump would favor business over-regulation and that big tech groups planned to put $500 billion into the AI market. Market enthusiasm ended when trading patterns became less aggressive.
Trump’s push to lower government regulation boosted stock market performance since investors now see positive signs for faster growth. New AI investment pushed tech stocks to new heights but sent the Nasdaq 100 down by 0.5 percent on Thursday.
New unemployment insurance applications grew by 6,000 to 223,000 reported last week versus 217,000 the prior week but remained above market forecasts of 221,000. After absorbing the news, the trading community began paying attention to companies sharing their latest profits during the fourth quarter.
Fundstrat analysts say 78% of reported companies surpassed profit estimates by an average of 6% during the first stage of the S&P 500 earnings season. Investors remain uneasy because they expect the Federal Reserve meeting to affect stock market trends. Financial markets watch new earnings data to decide if this recent market softening will end or last longer.
This article first appeared on GuruFocus.
