NEW YORK (news agencies) — U.S. stocks are drifting lower Thursday and giving back some of their gains from the day before.
The S&P 500 was down 0.4% in early trading. The Dow Jones Industrial Average was down 212 points, or 0.5%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.4% lower.
It’s the latest swing in a weekslong roller-coaster ride for Wall Street, as stock prices veer on uncertainty about what President Donald Trump’s trade war will do to the economy. Stocks got a boost Wednesday after the head of the Federal Reserve said the economy remains solid enough to leave interest rates where they are. But Jerome Powell also stressed that extremely high uncertainty is making it difficult to forecast what will happen next.
It’s not just the trade war affecting Wall Street. Accenture helped lead the market lower Thursday even though the consulting and professional services company reported slightly better profit and revenue for the latest quarter than analysts expected.
Worries are rising about the hit Accenture may take to its revenue from the U.S. government as Elon Musk leads efforts to cut spending. The federal government accounted for 17% of its North American revenue last fiscal year, and Accenture’s stock dropped 9.3%.
The broad U.S. stock market was likely due for its drop, which took it more than 10% below its all-time high in just a few weeks, after prices climbed so much faster than corporate profits to make it look too expensive, said Barry Bannister, chief equity strategist at Stifel.
He said the S&P 500 could bounce higher in the near term, particularly after Fed officials indicated they still see room to cut interest rates twice this year. Lower interest rates would give a boost to the economy, as well as prices for investments. The market has also traditionally had “relief rallies” after major, long-term upward runs for stocks cracked.
But Bannister expects stock prices to remain under pressure as the economy’s growth slows more sharply in the second half of the year and as inflation remains stubbornly high. That would create a mild form of “stagflation,” which is something the Fed doesn’t have good tools to fix. The Fed could lower interest rates further to help the economy, but that would also push upward on inflation.
In the meantime, some more signals arrived Wednesday to indicate the economy remains relatively solid at the moment, at least.
One report said slightly fewer U.S. workers filed for unemployment benefits last week than economists expected. It’s the latest sign of a potentially “low fire, low hire” job market.
A separate report said manufacturing growth in the mid-Atlantic region appears stronger than economists expected.
On Wall Street, Commercial Metals fell 0.9% after reporting weaker profit for the latest quarter than analysts expected amid what the steel company described as “a period of continued economic uncertainty.”
On the winning side of Wall Street was the company behind Olive Garden, Ruth’s Chris Steak House and other restaurant chains. Darden Restaurants climbed 6% after reporting profit for the latest quarter that matched analysts’ expectations through what it called “a challenging environment.”
Discount retailer Five Below rose 5.5% after reporting fourth-quarter sales and profit that beat analyst expectations. The Philadelphia company also issued strong sales guidance and said it expects to open 150 stores this year.
In stock markets abroad, London’s FTSE 100 slipped 0.2% after the Bank of England held its main interest rate steady.
Indexes fell more sharply across much of the rest of Europe, and German stocks in the DAX lost 1.7%. The loss was even worse in Hong Kong, where the Hang Seng index fell 2.2% following heavy pressure on tech-related stocks.
In the bond market, the yield on the 10-year Treasury fell to 4.18% from 4.25% late Wednesday.
news agencies Business Writers Matt Ott and Elaine Kurtenbach contributed.
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