US close: S&P 500, Nasdaq pull back from records as Nvidia drops late on

dl wall street wall st new york city nyc ney york stock exchange nyse nasdaq dow jones industrial average djia trading us usa united states of america 2023120702241 — Sharecast graphic / Josh White

US stocks finished mixed on Thursday with the Dow closing higher but the S&P 500 and Nasdaq retreating from record highs as Nvidia swung sharply into the red in afternoon trade.

After rising as much as 3.8% earlier on, Nvidia's stock finished the day down 3.5% at $130.78, taking a $246bn intraday swing, according to Dow Jones Market Data. Thursday's fall follows a 24% increase in the share price since the start of June, and a 170%-plus gain since the start of the year.

On the back of Nvidia's decline, the S&P 500 closed down 0.25%, pulling back from Wednesday's all-time closing high of 5,487.03, while the Nasdaq dropped 0.79% from its previous peak of 17,862.23 – with the latter snapping a seven-day winning streak.

The Dow Jones Industrial Average, however, rose 0.77% to 39,134.76 – though remained firmly below its record-high close of 40,003.59 reached last month.

“The Nasdaq 100’s ascent has paused for now following its move to 20,000, but instead the lagging Dow Jones has made headway," said Chris Beauchamp, chief market analyst at IG. "Broadening participation in the rally would be a major boost for investors, who have fretted about the sustainability of the rally, given that it was big tech that was making all the running.”

Thursday's session saw a barrage of US economic data that missed expectations, with housing starts and building permits dropping to their lowest levels since mid-2020, and jobless claims coming in above forecasts.

Housing starts declined 5.5% to an annualised rate of 1.277m in May, after growing by 4.1% in April, significantly under the 1.370m consensus forecast; while building permits fell 3.8% to 1.386m, surprising economists who expected a rise to 1.450m.

"Housing starts were weaker than expected in May and softness in building permits and deteriorating homebuilder sentiment indicate that starts will continue to be depressed in the near term," said Nancy Vanden Houten, US lead economist at Oxford Economics. "The starts data for April and May lend some downside risk to our forecast for residential investment in Q2 and our forecast for GDP. We expect recent declines in mortgage rates, which should accelerate once the Fed begins to cut rates, to support a modest gain in starts later in the year."

Initial jobless claims fell to 238,000 in the week to 14 June, from a revised 243,000 the week before, but came in slightly above the 235,000 consensus forecast – still the second-highest reading since August 2023. Meanwhile, the regional Philly Fed manufacturing index declined to 1.3 from 4.5, significantly below the 5.0 forecast.

Market movers

Nvidia was among several chip stocks to take a fall on Thursday, with Broadcom and Micron Technology also dropping sharply.

Trump Media & Technology sank 15% after the registration of additional shares became effective, diluting the stock's value

Tech consultancy Accenture surged 7% despite missing earnings estimates with its third-quarter results, as investors focused on strong growth in generative AI bookings.

Biopharma group Gilead gained 8% after positive results from a phase 3 trial of its HIV drug.

Dow Jones - Risers

Salesforce.Com Inc. (CRM) $241.80 4.31%
Chevron Corp. (CVX) $156.40 2.16%
International Business Machines Corporation (CDI) (IBM) $174.11 1.98%
Travelers Company Inc. (TRV) $211.87 1.66%
Cisco Systems Inc. (CSCO) $46.72 1.63%
Johnson & Johnson (JNJ) $147.98 1.46%
Merck & Co. Inc. (MRK) $129.67 1.31%
Amgen Inc. (AMGN) $309.89 1.27%
Caterpillar Inc. (CAT) $328.49 1.23%
McDonald's Corp. (MCD) $253.80 1.20%