S&P 500 retreats from record as investors sell high-flying Big Tech stocks, Nvidia drops 5%: Live updates

The S&P 500 fell on Thursday as investors rotated out of large-cap technology stocks.

The broad market index pulled back 0.88% to close at 5,584.54. The Nasdaq Composite slipped 1.95% to finish the session at 18,283.41, while the Dow Jones Industrial Average ticked down 32.39 points, or 0.08%, to 39,753.75.

— Brian Evans

Investors are seeing broader participation in the S&P 500 on Thursday after the latest inflation data suggested the Federal Reserve could soon cut rates. But the lack of participation from this year's megacap market leaders is weighing on the broader index.

"You've got positive CPI on the back of a slightly dovish Powell. Rates are down big, and you have kind of a rotation trade," said Ross Mayfield, investment strategy analyst at Baird. "But the problem with the market being so concentrated in big tech is that that rotation trade can look like a surface level negative."

— Sarah Min

The rolling, five-day moving average ratio of outstanding put options (bearish) to call options (bullish) "is reaching extreme levels of complacency," Wolfe Research technical analyst Rob Ginsberg wrote to clients late Wednesday before the stock market opened Thursday. "The last time it signaled was July of last year, which ended up being pretty timely," Ginsberg said.

The other contrarian signal Wolfe observed was the S&P 500 relative strength index, or RSI, closing above 80 on Wednesday for only the fifth time in the past 25 years. The Nasdaq-100 index RSI also closed above 80 on Wednesday.

"The unrelenting rally has brushed aside every single divergence and signal that has developed, so I'm sure it will laugh at these as well, but the combination of [these two events] does not happen often," Ginsberg said.

At their lows on Thursday, the S&P 500 fell as much as 1.02% while the Nasdaq-100 dropped as much as 2.47%.

— Scott Schnipper

The iShares Biotechnology ETF (IBB) hit a multiyear high in trading Thursday, dating back to January 2022, for the first time since February, as investors renewed their appetite for riskier stocks. IBB's 2.1% bump up was led by stocks such as Verona Pharma, up 16%; 4D Molecular, up nearly 13%; and Maravai, up 12%. Relay Therapeutics, which uses artificial intelligence to discover new therapies for cancer and other conditions, rose 11%.

Large-cap biotech stocks also were positive, with Moderna rising more than 4%, Iqvia up nearly 3% and Gilead Sciences up 2%, among others.

Biotech companies, especially those at the clinical stage, are very dependent upon debt. For that reason, they tend to perform better when interest rates are lower.

With today's gains, the IBB has risen about 6% year to date, with much of that momentum coming over the past month. Month to date, the fund has climbed 5%.

— Christina Cheddar Berk

The Federal Trade Commission is planning to delay its decision on whether to halt Chevron's acquisition of Hess Corporation until after an arbitration case with Exxon Mobil is resolved, people familiar with the matter told Bloomberg News.

Exxon is claiming a right of first refusal over Hess' lucrative oil assets in Guyana. Chevron has warned its deal with Hess would terminate if Exxon prevails in arbitration court.

An outcome in the arbitration is not expected until the fourth quarter at the earliest.

The FTC's reported decision to hold off until the dispute with Exxon is resolved could delay the completion of the Chevron-Hess deal even longer. The FTC declined to comment.

Shares of Chevron and Hess were little changed in afternoon trading.

— Spencer Kimball

Shares of QuantumScape soared 33% after the company reached an agreement with the Volkswagen Group-owned battery company PowerCo to mass produce battery cells based on QuantumScape's solid-state lithium-metal battery technology. Volkswagen shares also moved marginally higher following the announcement.

Per the agreement, PowerCo can manufacture up to 40 gigawatt hours, or GWh, a year using QuantumScape's technology, with the option to increase that up to 80 GWh. This is enough to equip about one million vehicles annually, according to the companies.

The deal replaces an earlier joint venture between QuantumScape and Volkswagen to co-manufacture batteries.

— Sean Conlon

The Russell 2000 jumped in Thursday's session, bucking the broader market's slide in a rare showing of idiosyncratic strength.

The small cap-focused index jumped 3.2% in the session. Meanwhile, the broad S&P 500 slipped 0.8%.

If this holds through the closing bell, it will be the first time since 2008 that the Russell 2000 advanced at least 3% while the S&P 500 was down, according to Bespoke Investment Group. On Oct. 10, 2008, the Russell 2000 climbed 4.6% despite the S&P 500 shedding 1.2%.

On top of that, Thursday would mark just the second time this has happened since 1979, Bespoke said.

Thursday's moves come amid a period of underperformance for small-cap stocks. The Russell 2000 has added less than 5% in 2024, underperforming the S&P 500's rally of more than 17%.

— Alex Harring

Shares of artificial intelligence favorite Nvidia slipped roughly 5% on Thursday as investors rotate out of megacap tech stocks.

Stocks in the AI darling were under pressure early in the session following a cooler-than-expected June inflation print that pressured the broader field of tech shares.

Nvidia stock has advanced 159% in 2024.

— Brian Evans

The Japanese yen appreciated as much as 3% Thursday, marking the currency's largest daily rise since late 2022. The yen was last hovering at 158.8 against the dollar.

The move came as the dollar index broadly fell after June's better-than-expected consumer price index report. According to Japanese broadcaster Asahi, officials also intervened in the currency market to prop up the currency, per government sources.

Earlier in July, the yen fell to a 38-year low near the 162 level against the dollar.

— Hakyung Kim

The recent sell-off in Deckers Outdoor is a buying opportunity in "one of the strongest, best-run companies in our coverage," Wedbush analyst Tom Nikic said in a note Thursday.

The footwear and apparel company is down more than 20% since hitting an all-time high in early June, he noted.

"We believe brand heat remains high at both core brands (Hoka and UGG)," wrote Nikic, who has an outperform rating and $1,030 price target on the stock. The target suggests about 15% upside from Wednesday's close.

UGG is at a seasonal low point, so the story will likely hinge on Hoka in the near term, he said.

"However, given how strong demand for UGG was in Fall/Winter 2023 (a rare bright spot in a tough Holiday season), we believe that even when we get to the higher-volume periods for UGG they can 'comp the comp' due to the fact that demand exceeded supply a year ago," Nikic said.

— Michelle Fox

Here are the stocks on the move midday:

• Delta Air Lines — The stock fell almost 5% after the airline issued a sales growth forecast for the third quarter that came in below expectations. The company also reported an almost 30% decrease in net income for the second quarter compared to a year ago. Shares of major airline stocks American Airlines and United Airlines also fell around 4.7% and 3.7%, respectively, following the results.
• MicroStrategy — Shares of the largest corporate holder of bitcoin rose more than 3% after the company announced a 10-for-1 stock split on Thursday "to make MicroStrategy's stock more accessible to investors and employees."
• WD-40 — The metal lubricant maker climbed about 3%. WD-40 reported total net sales of $155 million in the fiscal third quarter, up 9% from the year-ago period. The company's gross margin also came in higher compared to the same quarter a year prior.

Read the full list here.

— Sean Conlon

Apple pulled back on Thursday, threatening to end a period of continuous record closes.

The megacap technology stock slipped about 2% in Thursday's session. If that holds though the closing bell, it will conclude a seven-day streak of the stock rising to new highs.

On Wednesday, Apple closed at a record level for the seventh consecutive session. That marked the first streak of all-time closing highs of this length since 2012.

Apple's drawdown comes amid broader troubles for tech names in the session, with the Nasdaq Composite sliding more than 1%. With Thursday's pullback, the stock was up just about 0.3% on the week.

— Alex Harring, Nick Wells

Shares of Tesla were down 6% in midday trading after Bloomberg News reported that the automaker is bumping back its robotaxi event to October from August.

The report, citing sources familiar with the decision, said the delay was to give Tesla employees more time to build vehicle prototypes.

Autonomous driving and robotaxis are a key part of the long-term case for Tesla, which trades at higher valuations than legacy automakers. For years, CEO Elon Musk has touted this as a major potential growth area for the company.

Tesla's stock has been red hot recently, but Thursday's drop threatens to snap an 11-day winning streak.

— Jesse Pound

Megacap tech stocks underperformed on Thursday. Market darling Nvidia dropped more than 3%, as did shares of Meta Platforms. Apple and Google parent Alphabet both slid 2.7%. Shares of Amazon were down 2.4%.

Those moves added pressure to the S&P 500, even as a majority of the stocks in the benchmark traded in positive territory. The broader index was last down 0.3%, even with 415 names advancing.

— Sarah Min

Real estate stocks in the S&P 500 tracked for their best day in several months.

The sector added about 2.8% Thursday. If that holds through session close, it will mark its best day since March 27, when the sector climbed 2.42%.

SBA Communications and BXP led the sector higher with gains of more than 4%. Every stock in the sector was trading in the green.

With that jump, real estate was the best-performing sector of the 11 that comprise the broad S&P 500. Utilities followed with an advance of about 1.3%.

— Alex Harring

Easing inflation in June solidified the case for the Federal Reserve to begin cutting interest rates later this year.

Hopes of lower rates helped propel housing-related stocks higher Thursday morning. Shares of Home Depot, Lowe's and D. R. Horton added 2%, 3% and nearly 5%, respectively. The SPDR S&P Homebuilders ETF also gained nearly 4%.

— Lisa Kailai Han

Thursday morning's trio of earnings extends the trend from the flurry of early reporters ahead of the meaty part of earnings season.

All three companies that reported this morning — PepsiCo, Conagra and Delta Air Lines — all missed Wall Street's revenue expectations. Currently, almost 60% of the nearly two dozen companies that have already reported results early in this season have missed revenue estimates. Nike, General Mills, J.M. Smucker, Oracle and CarMax were some of the other notable revenue misses in recent weeks.

Consumers have cut back on snacking, and those volume declines hurt food makers' top lines. PepsiCo posted a revenue miss for just the second time in six years, while Conagra revenues missed for the fourth time in five quarters.

Meanwhile, the oversupply in the airline industry's routes and number of seats available this summer is pressuring airfares, especially among lower-cost airlines. But Delta Air Lines, which offers a bevy of premium offerings, also saw headwinds as two key metrics fell short of analysts' estimates. Revenue per available seat mile fell nearly 3% from a year ago on an adjusted basis, while passenger loads on its airplanes were a tad lighter than expected, too.

— Robert Hum

Small-cap stocks saw the biggest rally after the cool consumer price index report, with the iShares Russell 2000 ETF (IWM) jumping about 3%.

Small caps have underperformed throughout this market rally, and the Russell 2000 was up less than 2% for the year entering Thursday.

Part of the reason that small-cap stocks have struggled is concern that higher interest rates will make it more difficult for those companies to pay off or refinance their debt, especially if the U.S. economy falls into a recession. But the possibility of a "soft landing" was bolstered on Thursday, with both CPI and weekly jobless claims declining from their prior readings.

— Jesse Pound

Expectations for a September rate cut jumped after the latest inflation data showed easing pricing pressures.

Markets are currently pricing in a greater than 80% chance the Federal Reserve will lower rates in September, according to the CME FedWatch Tool. That is up from a roughly 70% chance just the day prior.

There is also a greater probability of three quarter-percentage-point rate cuts this year. The chance of the federal funds rate ending the year at 4.50% to 4.75% has jumped, to 41.7% from 26.2% in the previous session. The probability of it ending the year at 5.00% to 5.25% fell to 44.1% from 46.2%.

— Sarah Min, Jeff Cox

June's consumer price index reading is promising news for the inflation front, and supports the case for the Federal Reserve to lower interest rates at its September meeting, according to Comerica Wealth Management Chief Investment Officer John Lynch.

Lynch noted that the CPI report is also important for the market on several fronts.

"Reduced borrowing costs can help personal spending, as consumer stocks have lagged the S&P 500 this year. Lower rates can also aid debt service payments for the federal budget deficit. And finally, the equity market can benefit from lower discount rates for future profits, helping to support P/E multiples going forward," Lynch said.

He added that "investors should be careful what they wish for."

"If the Fed cuts much beyond that, it will be because the Fed has to cut! That is not an environment conducive for economic or market growth," said Lynch.

— Hakyung Kim

BJ's Wholesale Club could follow Costco's suit in raising membership fees, according to Wells Fargo.

"Now that COST has raised its fee, investor attention is likely to turn to BJ," the Wall Street firm said. "The company has had good membership performance and may not want to risk upsetting momentum in the near term."

Costco raised its membership fee for the first time since 2017, hiking the cost of its annual membership by $5 in the U.S. and Canada, and increased its higher-tier plan by $10.

Wells Fargo said it expects to see a similar fee hike next year from BJ's Wholesale, which the firm will reinvest back into customer value.

— Yun Li

The S&P 500 ticked higher on Thursday and hovered near a fresh record following June inflation data.

The broad market index added 0.04%. The Nasdaq Composite gained 0.1%, while the Dow Jones Industrial Average ticked down 5 points, or 0.02%.

— Brian Evans

MicroStrategy, the largest corporate holder of bitcoin, announced a 10-for-1 stock split on Thursday.

The company said the shares will be split into class A common stock and class B common stock "to make MicroStrategy's stock more accessible to investors and employees." The move comes amid a lull for the price of bitcoin, which has been stuck in a tight range since about March, but which many investors expect to rebound in the second half of the year.

The shares rose about 5% in premarket trading, but are currently about 34% off an all-time high of $1,999.99, reached in March of this year.

Read the full story here.

— Tanaya Macheel

The dollar index fell to a fresh low of 104.395 following June's consumer price index report. This marked the dollar index's lowest level since June 12, when the index declined to 104.257.

The measure of the U.S. dollar relative to other currencies briefly dipped below the 200-day moving average level of 104.449, which it has not traded below since June 12.

— Hakyung Kim, Gina Francolla

The consumer price index unexpectedly fell 0.1% in June on a month-over-month basis, helping the case for lower Federal Reserve rates. Year over year, it rose 3%, around its lowest level in more than three years.

Economists polled by Dow Jones expected CPI to rise 0.1% month over month and 3.1% year on year. Core CPI, which excludes food and energy, increased less than expected.

— Fred Imbert

Here are some of the stocks on the move in the premarket:

• Delta Air Lines — Shares tumbled 9% after the airline issued a lower-than-expected sales growth forecast in the current quarter. Net income also fell 30% in the second quarter despite revenue reaching record highs.
• Costco Wholesale — Costco shares added 2% after the wholesale club raised its membership fee for the first time since 2017. The company hiked the cost of its annual membership by $5 in the U.S. and Canada, and increased its higher-tier plan by $10.
• Pfizer — Shares rose 3% after the drugmaker said it will continue to develop the once-daily version of its weight loss pill following "encouraging" data in an early-stage trial, and plans to conduct studies in the second half of the year evaluating multiple doses of the drug.

Read the full list of stocks on the move here.

— Samantha Subin

Shares of Pfizer rose more than 2% in premarket trading Thursday after the drugmaker said it will continue to develop the once-daily version of its weight loss pill, danuglipron. The news follows "encouraging" data in an ongoing early-stage trial of the drug.

Pfizer said it plans to conduct studies in the second half of the year evaluating multiple doses of danuglipron. In December, the company discontinued a twice-daily version of it after patients had trouble tolerating the drug in a midstage trial.

— Annika Kim Constantino, Tanaya Macheel

Shares of Delta Air Lines were down more than 7% after the airline issued disappointing guidance for the third quarter. The company expects earnings per share between $1.70 and $2. That is below a StreetAccount consensus of $2.04 per share.

The weak outlook overshadowed better-than-expected earnings and revenue for the second quarter.

— Fred Imbert

PepsiCo shares were down more than 1% after the snack and beverage giant posted mixed results for the fiscal second quarter. The company earned $2.28 per share, beating an LSEG estimate of $2.16 per share. Revenue came in just below expectations at $22.5 billion.

"During the second quarter, our business delivered net revenue growth, strong gross and operating margin expansion and double-digit EPS growth, remaining agile despite facing difficult net revenue growth comparisons versus the prior year, subdued category performance within North America convenient foods and the impacts associated with certain product recalls at Quaker Foods North America," CEO Ramon Laguarta said in a statement.

— Fred Imbert

European stock markets were higher in early deals, with the regional Stoxx 600 index up 0.39% at 8:45 a.m. in London.

London's FTSE 100 index was up 0.2% as the British pound hit a four-month high against the U.S. dollar, following better-than-expected growth in the U.K. economy.

France's CAC 40 and Germany's DAX were 0.45% and 0.27% higher, respectively.

— Jenni Reid

On Wednesday, the Federal Reserve Board fined Citigroup $60.6 million for violating a 2020 enforcement action, according to a press release.

"Citigroup has made insufficient progress remediating its problems with data quality management and failed to implement compensating controls to manage its ongoing risk," the press release read. "The Board continues to monitor Citigroup's actions to comply with the 2020 action, which remains in effect."

The Board's fine, combined with those of the Office of the Comptroller of the Currency, total to about $135.6 million for the bank.

— Lisa Kailai Han

Inflation and the timing of the Federal Reserve's first cut could be key stories to the market on Thursday, with the June consumer price index report due out before the bell. Economists surveyed by Dow Jones are looking for the CPI to be up 0.1% month over month, and 3.1% year over year.

That would still be above the Fed's 2% inflation target, but would be a slowdown from May. Federal Reserve Chair Jerome Powell said Wednesday on Capitol Hill that the Fed doesn't need to wait until inflation gets all the way to 2% to cut rates, especially with signs that the labor market has cooled off.

"For some time the Fed has been more focused on levels, and now it seems that they may be starting to tilt more towards a focus on trend. And if that's the case, then the chances of a rate cut go up," said Matt Brenner, managing vice president, investments and product management at MissionSquare Retirement.

— Jesse Pound

With Wednesday's rally, the S&P 500 has led the month off with seven straight days of gains for the first time since September 2013. The index is now up 3.2% to start July.

Until Wednesday, the S&P 500 had not seen a 1% move, up or down, since June 5 — more than a month ago. That snaps a streak of 22 sessions without a 1% move, which was the longest such streak since November 2021.

 — Robert Hum

These are the stocks moving the most in extended-hours trading:

• WD-40 Company — Shares gained 11% after the maker of metal lubricants reported fiscal third-quarter results that beat analysts' expectations.
• PriceSmart — The membership warehouse club operator added 6% after posting a fiscal third-quarter earnings and revenue beat.
• Costco Wholesale — Shares gained 3% after the membership-only retail chain announced its first membership rate increase since 2017.

Read the full list of stocks moving here.

— Lisa Kailai Han

Stock futures traded near flat Wednesday night.

Dow futures slipped just around 0.1% shortly after 6 p.m. ET, while S&P 500 and Nasdaq 100 futures were both marginally below flat.

— Lisa Kailai Han