Wall Street stocks closed sharply lower on Thursday as Nvidia's eye-popping profits failed to spark gains in a market struggling to digest the gains of recent weeks.
Stocks opened higher, but analysts blamed rising U.S. Treasury yields for the reversal. Market participants also noted that big gains in stocks tend to be followed by selling.
“There has been a big rally since mid-April and people are beginning to pull money out,” said Briefing.com analyst Patrick O'Hare.
The S&P 500 and Nasdaq both closed lower after approaching all-time highs, while the Dow had the biggest drop of 1.5%.
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Nvidia, currently the third-largest company by market capitalization, still managed to rise by more than 9%, but that gain did not ripple through to the broader market.
In Europe, stocks in Frankfurt and Paris initially rose after a major survey showed business activity in the euro zone accelerated in May but gave up most of the gains in late trading.
S&P Global's flash HCOB Eurozone Purchasing Managers' Index (PMI) rose to 52.3 from 51.7 in April, the highest level in 12 months. A reading above 50 indicates growth, while a reading below 50 indicates contraction.
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The increase in the PMI was led by the services sector, where activity rose for the fourth consecutive month, helped by new business ventures. Manufacturing slowed its decline but remained below 50.
“The PMI data further eased concerns about European growth, providing modest support to European stocks and the single currency,” said Fawad Razakzada, analyst at City Index.
London stocks fell again a day after better-than-expected annual British inflation data dampened hopes that the Bank of England would cut interest rates soon.
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Traders largely ignored news on Wednesday that Britain's Conservative Chancellor Rishi Sunak had announced a general election would be held on July 4.
The right-wing Conservative Party, in power since 2010 but hit by disappointment over Brexit, discontent over the rising cost of living and a number of scandals, has consistently trailed the main opposition Labour party in opinion polls over the two years.
“This is sooner than expected but markets are remaining calm until the full Conservative and Labour election manifestos are published,” said Russ Mould, investment director at AJ Bell.
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Meanwhile, crude oil prices fell for the fourth consecutive day and gold prices also fell.
Shares of Live Nation Entertainment fell 7.8% after the Department of Justice filed an antitrust lawsuit arguing that the company, which owns ticket sales giant Ticketmaster, should be broken up.
Boeing shares plunged 7.6% after the company's chief financial officer said it expected plane deliveries to be weak for another quarter and that the company was likely to have a negative cash balance for all of 2024.
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New York – Dow Jones Industrial Average: down 1.5% to 39,065.26 (closing price)
New York – S&P 500: down 0.7% to 5,267.84 (close)
New York – Nasdaq Composite Index: down 0.4% to 16,736.03 (close)
London – FTSE 100: down 0.4% to 8,339.23 points (closing price)
Paris – CAC 40: up 0.1% to 8,102.33 (close)
Frankfurt – DAX: up 0.1% to 18,691.32 (close)
EURO STOXX 50: up 0.3% to 5,037.60 (close)
Tokyo – Nikkei Stock Average: Up 1.3% to 39,103.22 (closing price)
Hong Kong – Hang Seng Index: down 1.7% to 18,868.71 (close)
Shanghai Composite Index: down 1.3% to 3,116.39 (closing price).
USD/JPY: Up to 156.93 from Wednesday's 156.80
EUR/USD: down from 1.0823 to 1.0815
Pound/dollar: down from $1.2709 to $1.2696
EUR/GBP: flat at 85.16 pence
West Texas Intermediate: down 0.9% to $76.87 a barrel
Brent crude: down 0.7% to $81.36 per barrel
