US Stocks Stand Pat as S&P 500 Reaches Record; Investors Eye Trump Davos Speech
U.S. stocks opened slightly lower on Thursday following a week of rallies that propelled the S&P 500 index to a record intraday high on Wednesday. Investors are turning their focus to President Donald Trump’s upcoming virtual address at the World Economic Forum in Davos, Switzerland, scheduled for 5 PM local time (late morning in New York), which may provide further insight into his administration’s trade policies and potential tariff plans.
Despite initial fears, markets have been comforted by Trump’s decision not to bring sweeping tariffs early in his term. Analysts are also speculating about moves related to international tax policies. Chris Turner, head of foreign exchange strategy at ING, said one thing that might happen is Trump might address the OECD’s Global Minimum Tax, a measure to ensure multinational corporations pay a baseline level of income tax wherever they operate.
Economic Indicators Investors largely shrugged off a report showing a rise in weekly jobless claims to 223,000, the highest in six weeks, driven in part by Californians displaced by wildfires. Continuing claims, which track those receiving unemployment benefits over an extended period, rose to their highest level since 2018 outside of the pandemic era, signaling prolonged difficulties for unemployed workers in finding new jobs.
Currently, at 10:12 AM ET, the S&P 500 dropped 0.7% or 4.30 points to 6,082.07. The Dow Jones Industrial Average climbed 0.24% or 104.04 points to 44,260.77. The Nasdaq fell 0.44% or 87.83 points to 19,921.51. Meanwhile, benchmark 10-year Treasury yield rises to 4.642%.
As investors focus on Trump’s speech, corporate earnings reports did capture attention.
– American Airlines issued an unexpected warning of a potential loss per share in the first quarter, raising concerns about missing full-year earnings expectations. Shares dropped nearly 9%.
– Shares of Electronic Arts plummeted 17.5% after the company lowered its revenue outlook, citing reduced player engagement with soccer-themed video games.
– Nvidia and other semiconductor stocks fell as SK Hynix, one of the company’s key suppliers, cast doubt on the need for its memory products used in smartphones and computers. SK Hynix also released a conservative spending plan for the year.
Bitcoin stayed jumpy but last traded 1.21 percent higher at $105,044.70. Goldman Sachs Group Inc. CEO David Solomon at Davos termed bitcoin as “an interesting speculative asset.” Noting significant work at Goldman Sachs on the technology underlying bitcoin, he thinks the cryptocurrency “will over time help decrease friction in our financial system”.
However, Solomon said current rules bar banks like Goldman Sachs from directly participating in bitcoin. “From a regulatory perspective, we can’t own, principal, or be involved with bitcoin at all,” he explained. Under Trump, the Securities and Exchange Commission is expected to take a more crypto-friendly stance, potentially setting new guidelines for cryptocurrency usage and regulation.
Investors will stay focused on events out of Davos and corporate news as the week is characterized by mixed signals in the markets.
