US close: Stocks sharply lower ahead of inflation reading

dl nyse new york stock exchange wall st street city finance dow jones nasdaq sp finance dollar dollars us usa united states of america 2 — New York Stock ExchangeSharecast photo / Josh White

Wall Street stocks were sharply in the red at the close of trading on Thursday ahead of tomorrow's hotly-anticipated inflation reading.

At the close, the Dow Jones Industrial Average was down 1.94% at 32,272.79, while the S&P 500 was 2.38% weaker at 4,017.82 and the Nasdaq Composite saw out the session 2.75% softer at 11,754.23.

The Dow closed 638.11 points lower on Thursday, extending losses recorded in the previous session.

Investor sentiment got a boost on Thursday after Bloomberg reported that China may be willing to let Jack Ma's Ant Group go ahead with its initial public offering, indicating that Beijing may now very well be looking to dial back its tech crackdown and sending US-listed shares in Alibaba more than 4% higher in the process. The sudden scuttling of Ant's IPO back in November 2020, just days before the fintech giant was set to go public, came as China sought to make changes to the sector's regulatory environment.

Market participants also digested headlines from Europe, with the European Central Bank confirming its intention to hike interest rates at its policy meeting next month and downgrading growth forecasts. The Governing Council said it intends to raise key interest rates by 25 basis points at its July meeting and expects a further hike at its September meeting.

Treasury yields remained elevated on Thursday, with the yield on the benchmark 10-year note rising to 3.046%, while US benchmark West Texas Intermediate oil futures eased off 0.69% to $121.27 per barrel.

On the macro front, jobless claims in the US rose by more than expected during the latest week, although the Memorial Day holiday may have been partially to blame. According to the Department of Labor, in seasonally adjusted terms, initial unemployment claims rose by 27,000 to reach 229,000 over the week ending on 4 June. Economists at Barclays Research had forecast a rise to 215,000.

The four-week moving average of initial claims meanwhile rose by 8,000 to 215,000, while secondary claims, which are those not being filed for the first time and referencing the week until 28 May, were unchanged from the week before at roughly 1.31m.

No major corporate earnings were released on Thursday.

Reporting by Iain Gilbert at Sharecast.com

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