The S&P 500 fell 1 per cent and pulled further from its all-time high set on Tuesday. The Dow Jones Industrial Average slipped 109 points, or 0.2 per cent, and the Nasdaq composite dropped 1.6 per cent from its record set the day before.
Stocks were also mixed in Europe and Asia, coming off a much anticipated meeting between the leaders of the world’s two largest economies. US President Donald Trump hailed his talk with China’s leader, Xi Jinping, as a “12” on a scale of zero to 10, and Trump said he would cut tariffs on China. But while the talks may offer some stability for the near term, major tensions remain between the two countries.
Plus, stocks had already run to records earlier this week on expectations for potentially big improvements coming out of the Trump-Xi talks.
“The result was fine, but fine isn’t good enough given the expectations going in,” said Brian Jacobsen, chief economist at Annex Wealth Management. “The results were more like small gestures instead of a grand bargain.”
Also feeling the burden of high expectations were some of Wall Street’s most influential stocks.
Meta Platforms dropped 11.3 per cent, cutting into what had been a 28.4 per cent jump for the year so far, and was the heaviest weight on the S&P 500. Analysts said investors were likely perturbed by how much Facebook’s parent company said it’s planning to spend in 2026. Companies across the industry have been on an investment spree to build out their artificial-intelligence capabilities, and the concern is whether it will all pay off.
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Microsoft sank 2.9 per cent even though it reported stronger profit and revenue for the latest quarter than analysts expected. Analysts pointed to how it also expects to spend more on investments in 2026 than in 2025, while growth for its Azure business may have fallen a bit short of some investors’ expectations.
On the winning side of Big Tech was Alphabet. Shares of Google’s parent company climbed 2.5 per cent after its profit and revenue for the latest quarter easily topped analysts’ expectations.
The yield on the 10-year Treasury held at 4.08 per cent where it was late Wednesday, up from 3.99 per cent the day before Powell’s warning.
In stock markets abroad, indexes dipped by 0.5 per cent in France and by less than 0.1 per cent in Germany after the European Central Bank decided not to move its main interest rate.
With AP
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