The New York stock market continued its mixed close on Thursday.
The Dow Jones Industrial Average bounced back after two consecutive days of losses, while the tech-heavy Nasdaq reversed course and trended downward.
As the M7 big tech stocks entered a period of consolidation, only Microsoft (MS) continued a slight upward trend.
Tech Sector Takes a Breather
Technology stocks in the New York market entered a period of consolidation.
The Nasdaq Composite ended the day at 19,112.32, falling 34.49 points (0.18%).
On the other hand, the Dow Jones climbed 271.69 points (0.65%) to close at 42,322.75, while the S&P 500 added 24.35 points (0.41%) to finish at 5,916.93.
The Russell 2000, composed of 2000 small and mid-cap stocks, also rose 10.89 points (0.52%) to 2,084.69.
The CBOE Volatility Index (VIX), often referred to as Wall Street’s fear gauge, dropped 0.79 points (4.24%) to 17.83.
Bullish Outlook on the Horizon?
An optimistic outlook emerged that the stock market would see further gains.
CNBC, citing FactSet data, reported that the S&P 500 has surged over 18% in the past 25-trading days, and in such cases, the index has historically shown a 30% increase on average over the subsequent 250 trading days.
Since 1970, such a rapid 18% rise in the S&P 500 has only occurred five times, followed by an average 30% gain over the next 250 trading days.
U.S. President Donald Trump shifting focus from tariff wars to trade negotiations is also contributing to a more optimistic market outlook.
However, JP Morgan urged caution, noting that various market indicators weaken expectations for further gains.
They pointed out that retail investors are hesitant to buy more, short-covering for short sale contracts is already finished, and foreign investors are showing reluctance towards U.S. stocks, all indicating weak momentum for further gains.
Microsoft Lone Gainer Among M7 Tech Giants
The M7 big tech stocks, which have been driving recent market gains, took a collective breather.
Microsoft, the largest company by market cap among the M7, was the sole gainer, edging up 1.02 USD (0.23%) to close at 453.13 USD.
Meta Platforms slid 15.48 USD (2.35%) to 643.88 USD, while Amazon tumbled 5.08 USD (2.42%) to 205.17 USD.
Apple dipped 0.88 USD (0.41%) to 211.45 USD, and Alphabet fell 1.41 USD (0.85%) to 165.40 USD.
Nvidia slipped 0.51 USD (0.38%) to 134.83 USD, and Tesla closed down 4.86 USD (1.40%) at 342.82 USD.
CoreWeave Shares Tumble 2.5%
AI cloud company CoreWeave saw its stock price plummet despite reporting better-than-expected earnings after the previous day’s close. Investors focused on the company’s ballooning debt load amid massive investments.
CoreWeave, which provides AI data center services to companies, reported a staggering 420% year-over-year increase in first-quarter revenue to 981.6 million USD, far surpassing market expectations of 857 million USD. However, the company also signaled plans for substantial future investments.
The firm projected capital expenditures of 20 billion USD to 23 billion USD for the year, exceeding Wall Street’s forecasts.
As a result of these hefty investments, the company’s loss per share widened from 0.62 USD a year ago to 1.49 USD in the most recent quarter.
The massive investment push is leading to a significant increase in debt.
CoreWeave’s debt stood at 7.9 billion USD at the end of last year and is projected to be 21 billion USD this year. Interest expenses alone were estimated at 361 million USD for the previous year.
As a pure-play AI cloud stock, CoreWeave’s performance has a significant impact on the direction of the AI theme.
Meanwhile, Walmart Inc. reported better-than-expected quarterly results and provided an optimistic outlook. However, it cautioned about high uncertainty due to potential Trump tariffs, pressuring investor sentiment.
Walmart shares closed down 0.48 USD (0.50%) at 96.35 USD.
While the decline in Walmart’s stock price was relatively modest, the company’s warning about tariff impacts stoked investor concerns that the impact of tariffs could worsen the U.S. economy and corporate earnings.
