U.S. equities extended losses on Thursday, with the S&P 500, Nasdaq, and Dow all declining as Walmart and Moderna led a broad selloff across sectors. The S&P 500 fell 0.9%, the Nasdaq dropped 1.0%, and the Dow declined 1.3%, marking a two-week low for the major indexes.
Walmart shares plunged 9.2%, the largest single-day drop in four years, after the retailer reported weaker-than-expected earnings guidance. Moderna tumbled 23.6% following a steep decline in demand for its COVID-19 treatments. Energy was the only S&P 500 sector to post gains, rising 0.4%, while consumer staples and discretionary stocks led declines, down 2.0% and 1.7%, respectively.
Treasury yields climbed, with the 10-year note rising above 4.70% and the 30-year yield increasing by 5 basis points to 5.25%. The auction of 30-year Treasury Inflation-Protected Securities (TIPS) drew a bid-to-cover ratio of 2.82, the strongest demand since December 2020. The dollar index ended flat after earlier hitting a three-month low, while the euro traded above $1.17 for the first time since May. The Japanese yen was the worst performer among G10 currencies.
Oil prices rose over 2% to a four-week high, extending a two-week rally that has pushed prices up nearly 20% and nearly 40% year-on-year. Diesel prices were cited as a key driver of the recent energy price surge. Bitcoin gained 5% on the day, bringing its weekly advance to 15%.
Rate markets priced a 35% probability of a Federal Reserve rate hike next month, while traders also assigned a similar one-in-three chance of a Bank of Japan hike in September. Japan’s annual core consumer price inflation accelerated to 1.8% in July from 1.6% in June, remaining below the BOJ’s 2% target. Producer price inflation in Japan surged to over 7% from 2% in February.
The U.S. national debt surpassed $40 trillion, more than double its level a decade ago, following expansions under the Trump and Biden administrations. The report also referenced a Trump administration proposal to purchase $200 billion in mortgage-backed securities, though no further details were provided.
