U.S. Stocks Lack Direction Following Yesterday’s Tech Sell-Off

Stocks have seen considerable volatility over the course of the trading session on Thursday, with the major averages swinging back and forth across the unchanged line.

Currently, the major averages are narrowly mixed. While the Nasdaq is down 23.49 points or 0.1 percent at 17,973.44, the S&P 500 is up 0.28 points or less than a tenth of a percent at 5,588.55 and the Dow is up 23.85 points or 0.1 percent at 41,221.93.

The choppy trading on Wall Street comes as traders express some uncertainty about the near-term outlook for the markets following the tech sell-off on Wednesday.

The tech-heavy Nasdaq record its worst day since December 2022 after a report from Bloomberg said President Joe Biden’s administration is considering tougher trade rules against companies in its chip crackdown on China.

Bloomberg said the administration has told allies that it’s considering using the most severe trade restrictions available if companies continue giving China access to advanced semiconductor technology.

In U.S. economic news, the Labor Department released a report showing first-time claims for U.S. unemployment benefits climbed by much more than expected in the week ended July 13th.

The Labor Department said initial jobless claims rose to 243,000, an increase of 20,000 from the previous week’s revised level of 223,000.

Economists had expected initial jobless claims to edge up to 230,000 from the 222,000 originally reported for the previous week.

Meanwhile, the Federal Reserve Bank of Philadelphia released a separate report showing the pace of growth reaccelerated by much more than expected in the month of July.

The Philly Fed said its diffusion index for current general activity jumped to 13.9 in July from 1.3 in June, with a positive reading indicating growth. Economists had expected the index to inch up to 2.9.

The report said most future activity indicators also rose, suggesting more widespread expectations for overall growth over the next six months.

The Conference Board also released a report showing a modest decrease by its reading on leading U.S. economic indicators in the month of June.

The report said the leading economic index edged down by 0.2 percent in June after falling by a revised 0.4 percent in May.

Economists had expected the leading economic index to dip by 0.3 percent compared to the 0.5 percent decline originally reported for the previous month.

Sector News

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Housing stocks have shown a substantial move to the upside, however, with the Philadelphia Housing Sector Index surging by 4.0 percent to a record intraday high.

Considerable strength is also visible among networking stocks, as reflected by the 1.3 percent gain being posted by the NYSE Arca Networking Index.

On the other hand, pharmaceutical stocks have come under pressure over the course of the session, dragging the NYSE Arca Pharmaceutical Index down by 2.3 percent.

Airline stocks have also shown a notable move to the downside, with the NYSE Arca Airline Index falling by 1.3 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index plunged by 2.4 percent, while China’s Shanghai Composite Index climbed by 0.5 percent.

The major European markets have also turned mixed on the day. While the German DAX Index is down by 0.1 percent, the U.K.’s FTSE 100 Index is up by 0.3 percent and the French CAC 40 Index is up by 0.6 percent.

In the bond market, treasuries are giving back ground after moving higher over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.5 basis points at 4.170 percent.