Global stocks remained under pressure on Thursday afternoon as investor focus remains on the escalating conflict in the Middle East, which has now spread to 15 countries.
The Dow Jones shed 1.6% or 785 points at 47,954 points, the S&P 500 was down 0.6% at 6,830 points and the Nasdaq fell 0.3% at 22,748 points.
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Palladyne AI shares surged after the company reported fourth-quarter revenue of $1.66 million, up 118% year over year and well above analyst expectations.
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Kroger Co. posted fourth-quarter earnings that beat Wall Street forecasts with GAAP EPS of $1.35, though revenue came in slightly below estimates.
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Rigetti Computing reported mixed fourth-quarter results, with revenue of $1.87 million missing expectations and sending shares lower.
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BJ’s Wholesale Club delivered fourth-quarter earnings and comparable sales that topped expectations, but its weaker full-year guidance weighed on the stock.
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Victoria’s Secret & Co. beat fourth-quarter earnings estimates and issued a stronger-than-expected outlook as its turnaround strategy continues to gain traction.
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Burlington Stores Inc. reported stronger-than-expected fourth-quarter revenue and profit, lifting its shares despite a somewhat softer comparable-sales outlook for the year.
Morgan Stanley (NYSE:MS) is set to eliminate 2,500 positions globally as part of a strategic reshaping of its US and international operations, according to reports.
The layoffs represent roughly 3% of the bank’s workforce and will affect employees across wealth management, investment banking, and investment management divisions.
And Oracle Corp (NYSE:ORCL, XETRA:ORC) is planning to cut thousands of jobs as it works to manage the financial strain from a major expansion of artificial intelligence data centers, according to a report by Bloomberg L.P. on Thursday.
The layoffs are expected to affect multiple divisions and could begin as soon as this month. Some of the reductions will target roles the company believes will become less necessary as artificial intelligence is increasingly integrated into its operations.
Markets are struggling on a “thin diet of headlines,” according to Chris Beauchamp, chief investing officer at IG.
“While images of war continue to roll across screens around the globe, and Iranian missiles and drones attack other countries, markets have little upon which to base a sustained rally,” Beauchamp wrote Thursday.
“The president’s promise to escort ships has failed to support a bounce, given the difficulties which the US Navy faced in trying to defeat the less well-armed Houthis, and while some headlines suggest Iran has asked for negotiations, both sides continue to hurl ordnance at one another. Until this calms down, investors will continue to take the risk-off approach.”
Initial jobless claims in the U.S. held steady at 213,000 for the week ended February 28, slightly below economists’ forecast of 215,000, Labor Department data showed.
Continuing claims rose to 1.86 million, above the expected 1.84 million. Rhode Island, Oklahoma, and Tennessee reported the largest increases in initial claims.
The data comes ahead of Friday’s closely watched February nonfarm payrolls report, with economists projecting 55,000 jobs added, following January’s 130,000 gain.
Broadcom Inc (NASDAQ:AVGO, XETRA:1YD) shares climbed 4.5% on Thursday following the release of robust quarterly results and upbeat forward guidance.
According to Wedbush, Broadcom reported AI silicon sales growth of 140% and provided a line of sight to $100 billion in chip sales by 2027, backed by six major customers. The company also confirmed it has secured supply to meet this anticipated demand.
Wedbush noted that while the ramp-up outside of tensor processing units (TPUs) remains unclear, Broadcom’s outlook aligns with expectations for continued scaling of AI demand. Additionally, the company highlighted that large-scale deployments are moving from copper to optical interconnects beyond 400 Gb/s, though copper remains the most efficient medium for speeds up to that threshold.
US stocks have opened in the red, but the tech-powered Nasdaq is close to breaking even already, down less than 0.1%.
The Dow Jones is down 0.8%, and the S&P 500 opened 0.25% lower. Small caps are lagging, with the Russell 2000 falling 0.9%.
Biggest fallers on the Dow are Johnson & Johnson, Merck & Co, Walmart and Procter & Gamble,
Broadcom is up 2.1%, with bigger Nasdaq risers being Atlassian, Booking Holdings, DoorDash, Datadog and CrowdStrike.
US futures were pointing to a softer open on Wall Street on Thursday, after Iran de-escalation hopes earlier boosted European markets before being played down.
Dow Jones futures were down 0.5%, with the S&P 500 and the Nasdaq both slipping 0.2%.
A day earlier, US stocks closed solidly higher, led by a 1.3% gain for the Nasdaq, while the S&P added 0.8% and the Dow rose 0.5%.
US economic data painted a reassuring picture, with services PMIs holding firm, ADP payrolls beating forecasts, and mortgage applications surging 11%. Perhaps most significantly, the ISM prices paid component dropped sharply to suggest pipeline inflation pressures may be easing.
On Thursday, reports emerged that Iran’s deputy foreign minister was suggesting Tehran would trade its nuclear programme for a satisfactory US economic offer, sending European stocks and US futures sharply higher.
But Iran’s state news agency IRNA subsequently said the remarks had been taken out of context and did not represent a new proposal, leaving markets roughly where they started, with European indices drifting back into the red and bond yields, which fell sharply on the initial report, also retracing.
Scepticism about the diplomatic signals was also reinforced by news of Iranian strikes on targets across a growing number of countries today, including a strikes on Kursish Iraq, an airport in Azerbaijan and an Iranian missile hitting a US oil tanker in the Persian Gulf.
Market analyst Fawad Razaqzada at Forex.com said: “In the last couple of days, markets are increasingly attempting to price in the possibility of easing geopolitical tensions in the Middle East.”
He says the reaction has been “measured rather than exuberant”, with investors appearing “willing to respond to positive developments, but few are ready to assume that a definitive breakthrough is imminent”.
The mood in the tech sector may get a lift from strong results from Broadcom, the ninth-largest company on the S&P 500, which reported first-quarter revenue up 29% to $19.3 billion, beating forecasts.
Shares were up 6% pre-market, with CEO Hock Tan flagging accelerating AI semiconductor revenue and guiding for $10.7 billion in AI chip sales in the second quarter alone.
Also to take on board, China cut its GDP growth target of 4.5-5% for 2026, down from the previous “around 5%” goal, as thousands of officials gathered in Beijing for the opening of the National People’s Congress, where delegates are approving the country’s economic and political roadmap for the next five years.
Crude oil prices are elevated again, with WTI rising almost 3% to $76.90 a barrel. Metals are generally softer, led by copper.