Stocks fell Thursday as investors continued to pare positions in high-flying technology names while taking profit on recent runs elsewhere.

The Dow Jones Industrial Average slid 533.06 points, or 1.29%, closing at 40,665.02. The S&P 500 dropped 0.78% to end at 5,544.59. The technology-heavy Nasdaq Composite lost 0.70%, closing at 17,871.22.

Thursday brought more dumping of megacap tech plays, a pattern seen in recent days as the growing likelihood of a September interest rate cut from the Federal Reserve bolstered optimism in the broader market. This excitement has largely helped small caps and more cyclical names, which are seen as bigger beneficiaries of lower borrowing costs, though those names also took a leg down following notable gains.

This shift away from tech came to a head on Wednesday, when the Nasdaq saw its worst daily performance since December 2022. Wednesday also marked the first session since 2001 where the Nasdaq posted a loss exceeding 2.5%, while the blue-chip Dow registered a gain.

But Thursday's sell-off appeared broader than tech alone. All but one of the 11 sectors that comprise the S&P 500 traded lower, while nine out of every 10 Dow members also saw losses. Even the small-cap focused Russell 2000, which has run up amid expectations for forthcoming interest rate cuts, dropped about 1.9%.

"There's some profit taking," said Keith Buchanan, senior portfolio manager at Globalt Investments. "I kind of cringe a bit if the profit taking occurs five days into a trade, but that just shows us the magnitude of what we've seen as far as the rotation."

Despite Thursday's declines, the Russell 2000 has jumped 3.5% in the last five trading days. But the Nasdaq has slipped about 2.3% in the same period, underscoring the bigger theme of traders rotating out of tech.

With Thursday's moves, the Dow was the only of the three major indexes tracking for week-to-date gains with an advance of more than 1%. Additionally, the Russell 2000 has popped more than 2% on the week.

The S&P 500 has slipped more than 1% since the start of the week, while the Nasdaq Composite has fallen almost 3% amid the tech sell-off.

"Obviously, Fed easing rates is going to be good for small businesses," said Charlie Ripley, senior investment strategist at Allianz. Meanwhile, there's "some prudence and profit taking with the tech trade that's been so profitable this year."

Stocks close Thursday lower

Stocks finished Thursday's session lower.

The Dow slid more than 500 points, or 1.3%. The S&P 500 and Nasdaq Composite slipped 0.8% and 0.7%, respectively.

As of Thursday's close, the Dow is the only of the three major indexes tracking to finish the week up, with a gain of more than 1%. The S&P 500 and Nasdaq have slipped about 1.3% and 2.9%, respectively, week to date.

— Alex Harring

There's weakness ahead for the equity market, Evercore ISI says

Stocks may be due for a rough time in the near term, according to Evercore ISI.

In a Thursday note, Evercore ISI head of technical analysis Rich Ross said that he's grown more concerned tactically as stocks enter their worst stretch shortly.

There's more room for "tactical downside in the weeks to come as we enter the gauntlet of the weakest two months and only consecutive losing months for equities, with markets at all time highs," he elaborated.

Nonetheless, Ross said that he's still keeping his bull case and year-end target of 5,800 for the S&P 500 intact.

— Lisa Kailai Han

U.S. presidential election could impact chip stocks, says UBS

The semiconductor sector will likely continue to experience tailwinds from the rhetoric of the upcoming U.S. presidential election, according to UBS.

Chip stocks fell broadly on Wednesday on news that the Biden administration is weighing stricter export controls that would prevent chipmaking companies from selling their products to China.

"An increase in rhetoric into the November US election could spur larger
swings in geopolitically sensitive sectors and markets. The outsized impact of today's two headlines also partly reflects stretched positioning in semiconductors, in our view, which is reflected in the year-to-date performance of the SOX index (+30%)," Solia Marcelli, chief investment officer Americas, wrote in a Thursday note.

The VanEck Semiconductor ETF is down by more than 7% for the week. Nvidia shares gained 2.4% on Thursday, but are negative by 6.5% week to date.

— Hakyung Kim

Wall Street stands by Taiwan Semiconductor after second-quarter earnings results

Wall Street is staying bullish on Taiwan Semiconductor Manufacturing on the heels of a stronger-than-expected second-quarter print.

"TSMC is one of the most attractive names in AI as it offers upside in both our base and bull-case, and we see limited room for the multiples to derate off current levels," wrote New Street's Pierre Ferragu."TSMC has an exceptional return profile and remains the only true leading-edge foundry."

Bernstein analyst Mark Li reiterated his outperform rating following the report, calling momentum within data center AI "unabated." He anticipates a strong short-term setup for shares, with the semiconductor supplier on track to more than double "chip-on-wafer-on-substrate" supply.

Although the company refrained from hiking long-term gross margin guidance, JPMorgan's Gokul Hariharan expects an eventual boost given the "quite strong" AI-related commentary.

"Overall, we believe that consensus EPS estimates are likely to move up, due primarily to GMs ... and should pull the stock out of the recent correction trend," he said.

U.S.-listed shares slipped less than 1% during Thursday's session.

— Samantha Subin

Goldman expects an Apple earnings beat

Goldman Sachs is anticipating that Apple will deliver earnings results topping Wall Street's expectations for the third quarter of fiscal 2024.

The firm, which has a buy rating on the stock, estimates that the company will post earnings of $1.36 per share compared to the $1.33 per share that analysts polled by FactSet are expecting. Goldman also expects a 4% year-over-year increase in revenue, estimating $85.1 billion.

In terms of iPad and Mac sales, Goldman expects double-digit growth compared to the same period last year at 23% and 13%, respectively. By contrast, the firm estimates that iPhone sales will see a 5% decline compared to the year-ago period.

"Apple's brand loyalty has resulted in a growing installed base of users that provide Apple with visibility into revenue growth by reducing customer churn, lowering customer acquisition costs for new product and services launches (e.g., Apple TV+, Apple Fitness, Apple Watch), and encouraging repeat purchases, such as phone upgrades," analyst Michael Ng wrote in a Thursday note.

Apple is set to report its third-quarter earnings on Aug. 1. The stock is up nearly 17% in 2024.

— Sean Conlon

Wall Street's volatility index rises

Wall Street's fear gauge ticked higher this week.

The CBOE Volatility Index (VIX), a popular measure of volatility in markets, jumped about 9% Thursday to roughly 16, set for its highest close since April. It had started the week around the 12 handle.

To be sure, 16 is still below the long-term historical average around 21, according to Investopedia. Generally speaking, rising levels in the VIX represent an increase in fear and uncertainty. However, the low level of volatility this year had some investors concerned markets have gotten too complacent.

— Sarah Min

Rumble seeing elevated trading volume since Vance pick

Shares of video platform Rumble have already traded hands more than 2.5 million times on Thursday, continuing a week of relatively heavy trading volume. JPMorgan said that retail interest in the stock jumped sharply.

Rumble has ties to JD Vance, who Donald Trump picked to be the Republican vice presidential candidate on Monday. Vance's venture capital firm backed Rumble before it went public, and Vance reported a stake in the video company in his most recent financial disclosure.

Prior to this week, Rumble had not seen a day of volume above 2.5 million since April 3, according to FactSet.

— Jesse Pound

Domino's Pizza heads for worst day since 2008

Shares of Domino's Pizza sank more than 13% during Thursday's session, putting the pizza chain on pace for its worst day since December 2008.

The decline came on the heels of its second-quarter results. Earnings came in at $4.03 per share, topping the $3.68 expected by analysts polled by LSEG. Revenues were in line with the $1.10 billion that analysts projected.

Domino's also said it expects fewer store openings than previously expected in 2024. The company now anticipates 825 to 925 new stores. Domino's, however, maintained its target of anticipating at least 175 new U.S. stores annually between 2024 and 2028.

— Samantha Subin

Eli Lilly on pace for worst day since September 2021

Eli Lilly shares fell nearly 6% during afternoon trading, extending losses from the previous session. On Wednesday, the stock fell nearly 4% following Roche's announcement that its latest weight loss drug showed promising early-stage trial data.

The move lower during Thursday's session puts the stock on pace for its largest percent decrease since Sept. 9, 2021, when the stock fell 5.82%.

— Sean Conlon

Warner Bros. Discovery jumps on Financial Times report that it’s weighing strategic options

Shares of Warner Bros. Discovery added 5% following a report from the Financial Times that the entertainment giant is considering a range of strategic options to help boost its share price.

Those options include selling assets, as well as splitting off its Warner Bros movie studio and Max streaming service into a new company, sources familiar with the matter told the Financial Times.

The stock has had a rough year, down 23% in 2024. However, Thursday's gain brings Warner Bros. Discovery's week-to-date advance to 18%, placing the stock on track for its best week since November 2023.

—Darla Mercado

Information technology and communication services stocks drag on S&P 500

The S&P 500 is tracking to end this week down nearly 1%, hurt in large part by struggling tech stocks.

The information technology and communication services were the two worst performing sectors so far this week, registering losses of more than 4% and 2%, respectively. More than half of the 11 sectors are tracking for gains, underscoring the weight of these declines of the broad index.

Advanced Micro Devices led the information technology sector down with a drop of more than 14% this week. Super Micro Computer, Micron Technology and Cadence Design Systems all slid more than 12%, making them the next biggest losers.

Meta Platforms was the biggest laggard within communication services, on pace for a nearly 5% drop this week. Alphabet followed, shedding more than 3%.

— Alex Harring

Citi sees further but more 'moderated' upside for the S&P 500 in the second half of 2024

Citi remains optimistic on its outlook for equities going into the second half of the year.

"We look for further S&P 500 upside during 2H24 albeit at a moderated pace vs 1H," strategist Scott Chronert wrote in a Tuesday note. "We remain constructive on the fundamental setup during the second half despite ongoing recession concerns."

Chronert added that investors seem to have balanced some of their traditional macro concerns this year by pouring capital into the generative AI theme. This is evidenced by the disproportionate share gains that Nvidia and the other Magnificent Seven tech titans have captured in 2024.

— Lisa Kailai Han

Cintas hits all-time high post-earnings

Shares of Cintas rose more than 6% during Thursday's trading session, hitting a new all-time high of $773.78 following the company's better-than-expected fourth-quarter results. Shares are up more than 27% this year.

The maker of company uniforms posted earnings of $3.99 per share, while analysts polled by FactSet were expecting $3.79 per share. The company also reported revenue that was in line with estimates.

— Sean Conlon

Stocks making the biggest moves midday

Here are some of the stocks on the move midday:

• D.R. Horton – Shares surged more than 12% after the company's fiscal third-quarter results topped Wall Street expectations. The homebuilder posted earnings of $4.10 per share on revenue of $9.97 billion. Analysts polled by FactSet were expecting $3.75 per share on revenue of $9.61 billion. The company also authorized a $4 billion share repurchase program
• Domino's Pizza – The pizza retail chain plummeted nearly 13% after posting mixed second-quarter results. Domino's reported per-share earnings of $4.03, which came in above the $3.68 analysts polled by LSEG had expected. However, revenue came in at $1.1 billion, in line with estimates. The firm also reported its U.S. comparable store sales grew slightly less than forecasted.
• Beyond Meat – The stock fell nearly 11% after The Wall Street Journal reported, citing people familiar with the matter, that the alternative meat producer has engaged with bondholders to begin discussions about restructuring its balance sheet.

Read the full list here.

— Sean Conlon

69 stocks in the S&P 500 reach new 52-week highs

During Thursday's trading session, 69 stocks within the S&P 500 were trading at their new 52-week highs.

Names that hit this milestone included:

• D.R. Horton trading at all-time high levels back to its IPO in June, 1992
• General Motors trading at levels not seen since February, 2022
• Coca-Cola Co trading at levels not seen since May, 2022
• BlackRock trading at levels not seen since January, 2022
• State Street trading at levels not seen since March, 2023
• Lockheed Martin trading at all-time high levels back to their merger of Martin Marietta and Lockheed in 1995
• Public Storage trading at levels not seen since April, 2023
• NiSource trading at levels not seen since August, 2022
• UnitedHealth trading at all-time high levels back to its IPO in 1984
• Walmart Stores trading at all-time high levels back to when it first began trading on the NYSE in August, 1972

Estee Lauder was the only stock that was trading at new 52-week lows.

— Lisa Kailai Han, Christopher Hayes

Retail sales and unemployment claims show soft landing could come, says TradeStation strategy lead

The combination of stronger-than-expected retail sales and rising unemployment claims can show that the Federal Reserve may get its coveted soft landing, according to David Russell, global head of market strategy at TradeStation.

Unemployment data released Thursday showed further tightening in the labor market. Jobless claims rose week over week to 243,000 at last count, well above the consensus estimate of economists polled by Dow Jones of 229,000. And continuing claims rose to its highest level since 2021.

At the same time, retail sales data published Tuesday showed growth was unchanged in June, despite economists bracing for a decline. That can be taken as a good sign about the state of the consumer.

"We have no 'stag' and not much 'flation,'" Russell said. "The Fed might have achieved the goal of a soft landing."

— Alex Harring

Shoppers spent $14.2 billion over the past two day, Adobe Analytics says

It was another record turnout for Amazon Prime Day. The e-commerce giant didn't disclose specific numbers, but did say the two-day event set records for both sales and volume.

Amazon's bargain bonzana is joined by sales events hosted by rivals such as Walmart and Target. Collectively, these sales also hit record levels, according to Adobe Analytics. Strong demand for back-to-school items, electronics and home goods boosted online sales on Tuesday and Wednesday to $14.2 billion, or a gain of 11% from last year's event.

Adobe said the pick up in electronics sales and home furnishings may be a sign of the start of a new product refresh cycle.

Sales in the electronics category rose 61% compared with the average daily sales in June. Growth was most pronounced for tablets (up 117%), televisions (up 111%) and headphones and bluetooth speakers (up 105%), it said. Shoppers in the home goods category scooped up small kitchen appliances (up 76%), kitchenware and cookware (up 25%), and mattresses (up 21%), among other items.

Shares of Amazon and Walmart were trading down less than 1% each, while Target shares fell more than 1%.

—Christina Cheddar Berk

Morgan Stanley names Amazon, Apple, Eli Lilly among highest-conviction stocks into earnings

With second-quarter earnings season underway, Morgan Stanley listed a slate of stocks it believes has high upside to include Amazon, Apple and Eli Lilly.

"We expect high price dispersion this earnings season; we expect companies that execute on margins in a challenging pricing environment to be relative beneficiaries," the bank wrote in a Thursday note. "Turning to guidance, we will be watching to see whether high 2H24 expectations are realistic or if they will be pushed out to 2025."

Coca-Cola, DraftKings and MSG Entertainment are other stocks that should also have near-term catalysts that should drive a meaningful upside move in the stock. On the other hand, Morgan Stanley sees downside risk for shares of Etsy and Logitech, among others.

— Lisa Kailai Han

Rotation out of semiconductor stocks driven by positioning, says Bank of America

The rout in semiconductor stocks Wednesday was likely driven by investor positioning, according to Bank of America.

The PHLX Semiconductor Sector Index tumbled 6.8% in the prior session, versus the S&P 500's 1.4% loss and the Dow Jones Industrial's 0.59% gain, as investors rotated into more rate-sensitive names.

However, artificial intelligence is still the strongest and most dependable area of capital expenditures, driven by U.S. tech companies with strong balance sheets and proven monetization, analyst Vivek Arya wrote in a note Wednesday.

Outside of AI, "global growth remains murky at best," he added, pointing to consumer restraints on the PC/smartphone upgrade cycle, sluggish enterprise and telco demand, as well as weak demand in China.

"We understand the rotation away from AI/data-center semis towards industrial/auto/consumer, but it's not supported by fundamentals and is likely short-term positioning driven," Arya said.

— Michelle Fox

Nasdaq opens higher

The Nasdaq Composite rose to kick off Thursday's session, rebounding from the prior day's sell-off.

The technology-heavy index climbed 0.5% shortly after 9:30 a.m. ET. That comes after Wednesday marked the index's worst day since late 2022.

The S&P 500 added 0.2%, while the Dow slipped 0.2%.

— Alex Harring

S&P 500 ends longest streak without 1% drawdown since 2020

The S&P 500 recorded its first session with a decline of at least 1% in several months on Wednesday.

The broad index slipped 1.4% on Wednesday, snapping a streak of 52 consecutive trading sessions without a slide of 1% or greater. That's the longest period for this milestone going back to January 2020, according to data from Deutsche Bank.

"After a relentless run of market advances, yesterday finally saw that come to an abrupt halt," macro strategist Henry Allen wrote to clients on Thursday. "It makes a notable change in the current market narrative, as the index has hit a succession of record highs over the last few weeks."

Allen pointed to chipmakers as the "main culprit" for this slump. This group struggled after Bloomberg News reported that the Biden administration is considering tougher trade restrictions if companies continue granting China access to U.S.-made technology.

— Alex Harring

Jobless claims jump to the highest level in nearly a year

Initial filings for unemployment benefits surged last week while continuing claims hit their highest level since late 2021, the Labor Department reported Thursday.

Jobless claims totaled 243,000 for the week ending July 13, up 20,000 from the previous period and ahead of the Dow Jones estimate for 229,000. The number tied for the highest since Aug. 12, 2023.

Continuing claims, which run a week behind, also rose by 20,000, hitting 1.867 million, the highest since Nov. 27, 2021 and slightly above the FactSet estimate for 1.863 million.

In other economic news, the Philadelphia Federal Reserve's manufacturing index unexpectedly rose to 13.9 in July, up 13 points on the month and better than the estimate for 2.9. The number represents the difference between companies reporting expansion against contraction.

—Jeff Cox

ECB holds key rate steady as inflation pressures are 'still high'

The European Central Bank held its key interest rate steady Thursday, opting not to follow up on its quarter percentage point reduction in June.

In its post-meeting announcement, the ECB noted that inflation was little changed last month but price pressures "are still high" and likely to hold above the bank's 2% target "well into next year."

The bank's key deposit facility rate is at 3.75%.

—Jeff Cox

Stocks making the biggest moves premarket

Check out some of the companies making headlines before the bell:

• Domino's Pizza — Shares plunged more than 13% on the company's mixed second-quarter results. Domino's posted $4.03 earnings per share, topping an LSEG estimate of $3.68 per share. However, revenue came in line with estimates at $1.1 billion. U.S. comparable store sales also grew slightly less than expected.
• United Airlines — Shares of the airline added 1.5% before the bell after it said profit jumped 23% last quarter. However, United also shared a disappointing current-quarter outlook, saying that it anticipates adjusted earnings to range between $2.75 and $3.25 a share. Analysts polled by LSEG had estimated earnings of $3.44 per share.
• Discover Financial Services — The stock gained 3.5% after posting better-than-expected second quarter results. The bank and payments company posted $6.06 in earnings per share on $4.54 billion in revenue. Analysts polled by LSEG had forecasted $3.07 earnings per share on $4.17 billion in revenue.

The full list can be found here.

— Hakyung Kim

Semi ETFs bounce before the bell following sell-off

Semiconductor funds took a leg up in premarket trading on Thursday, looking to regain some ground after Wednesday's tumble.

The VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX) both added about 1% before the bell. Each had dropped more than 7% on Wednesday, which marked the worst session for both since March 2020.

Despite Wednesday's declines, the VanEck ETF is still up more than 45% on the year, while the iShares fund has added more than 26%.

— Alex Harring

Domino's Pizza sheds 10% after mixed earnings report

Shares of Domino's Pizza dropped more than 10% in the premarket after the pizza delivery company reported mixed second-quarter results.

Domino's earned $4.03 per share, beating an LSEG estimate of $3.68 per share. Revenue, however, came in line with expectations at $1.1 billion.

U.S. comparable store sales, a key metric for restaurants and retailers, also rose slightly less than expected. Sales expanded by 4.8% for the quarter, while analysts polled by StreetAccount expected a 4.9%. increase.

— Fred Imbert

Taiwan Semiconductor ticks higher after earnings beat

U.S.-listed shares of Taiwan Semiconductor rose 0.7% in the premarket after the chipmaker posted second-quarter earnings that beat expectations.

The company earned NT$247.85 billion on revenue of NT$673.51 billion. Analysts polled by LSEG expected net income of NT$238.8 billion on revenue of NT$657.58 billion.

CEO C.C. Wei pointed to strong demand for the company's AI chips as a source for the strong results. He noted that he tries to "reach the supply and demand balance, but I cannot. Today, the demand is so high I had to work very hard to meet customer demand."

"The supply continues to be pretty tight, all the way through 2025," Wei warned, adding that the firm hopes the tight supply can ease in 2026.

— Fred Imbert, Sheila Chiang

Weekly jobless claims data set for release Thursday morning

Jobless claims data for the week ending July 13 are due out Thursday morning. Economists polled by Dow Jones are anticipating claims to come in at 229,000. That's up from 222,000 the week before.

— Sarah Min

Stocks making the biggest moves after hours

Check out the companies making headlines in after hours trading.

• Discover Financial Services — Shares rose 2.7% after Discover Financial Services reported results from its second quarter. The bank and payments company posted net interest income of $3.52 billion, topping the FactSet consensus estimate of $3.46 billion. Earnings came in at $6.06 per share, beating analysts' estimates of $3.10 per share.
• Kinder Morgan — Shares dropped 2.8% after Kinder Morgan posted quarterly results that were below expectations. The pipeline operator reported second-quarter adjusted earnings of 25 cents per share, less than the 26 cents per share anticipated by analysts polled by FactSet. Revenue also missed expectations.
• United Airlines — The stock was down slightly, by 0.3% after United Airlines reported a mixed second quarter. The company posted second-quarter adjusted earnings of $4.14 per share, above the LSEG consensus estimate of $3.93 per share. However, revenue of $14.99 billion was below the expected $15.06 billion.

Read the full list here.

— Sarah Min

Stock futures open higher

Stock futures opened higher Wednesday night.

Dow Jones Industrial Average futures rose 48 points, or 0.12%. S&P 500 futures and Nasdaq 100 futures climbed 0.15% and 0.27%, respectively.

— Sarah Min