Dow Jones Snaps 13-Day Winning Streak as Stocks Slide
The Dow Jones Industrial Average experienced a setback on Thursday, breaking its impressive streak of 13 consecutive gains. The 30-stock index fell by 161 points, approximately 0.5%, after starting the day with a gain of more than 100 points.
Joining the Dow in the negative territory, the S&P 500 dropped by 0.4%, while the Nasdaq Composite declined by 0.3%. Honeywell took a major hit, dropping more than 5%, as the company reported weaker-than-expected revenue. Similarly, Chipotle Mexican Grill saw its shares plummet by about 9% due to sales falling short of estimates.
Amidst the downturn, Meta Platforms managed to buck the trend, with its shares soaring by 5% following better-than-expected results and a strong guidance. The company’s improved performance was driven by a rebound in ad revenue.
A bright spot in the market has been the generally robust earnings results. According to FactSet data, 81% of the companies that have reported thus far have exceeded analyst expectations.
However, the economic news was not all negative. The gross domestic product (GDP) showed a rise of 2.4% in the second quarter, surpassing economists’ expectations of a 2% increase. The report also indicated that price pressures were easing, with the personal consumption expenditures price index rising by 2.6% in the second quarter. This was lower than economists’ expectations of a 3.2% increase and the 4.1% rise seen in the previous quarter.
On Wednesday, the Federal Reserve raised rates for the 11th time. Although investors initially showed concern, Fed Chair Jerome Powell’s comments after the decision calmed nerves. Powell stated that the central bank could either raise rates again or maintain current levels based on future data. The next Fed meeting is scheduled for September, and traders anticipate that upcoming inflation and employment figures will likely prompt the Fed to be more cautious.
Jeremy Siegel from Wharton School noted that the markets seemed unaffected by the high rates that caused anxiety earlier this year. He also pointed out that Powell’s commitment to considering both sides of the equation is viewed as positive for the markets.
Wednesday’s record-breaking 13-day winning streak for the Dow was a remarkable feat not seen since 1987.
CNBC’s Scott Schnipper and Gina Francolla contributed to this report.