U.S. Stocks Hold Steady as Wall Street’s Momentum Cools

U.S. stocks maintained their stability on Thursday as Wall Street’s recent surge lost some steam following another record-setting day. The S&P 500 barely moved after reaching its 25th all-time high this year, dipping by less than 0.1%. The Dow Jones Industrial Average added 0.2%, while the Nasdaq composite slipped 0.1% after achieving its own record.

Retailers Big Lots and Five Below faced setbacks, with Big Lots witnessing an 18.2% drop in shares after reporting a larger loss than anticipated. Five Below’s profit and revenue fell short of analysts’ expectations, primarily due to struggles among its lower-income customers. The widening gap between lower and higher-income customers has been a recurring theme among retailers, with inflation disproportionately affecting those at the lower end.

Additionally, a report revealed a potential softening in the job market as more U.S. workers applied for unemployment benefits compared to the previous week. While the numbers remain historically low, this could indicate a slowdown in the job market. Wall Street, however, hopes for such a slowdown as it could lead to lower inflation and potentially prompt the Federal Reserve to cut interest rates, a move desired by traders. The risk lies in an economic slowdown turning into a recession, which would ultimately harm stock prices.

Another report highlighted that the productivity of U.S. workers in the first quarter of the year was not as robust as economists had predicted. Strong productivity gains are crucial as they allow wages to rise without significant upward pressure on inflation.

Treasury yields remained relatively steady after the economic reports, with the 10-year Treasury yield holding at 4.28%. In the stock market, Lululemon Athletica saw a 4.8% climb in shares after reporting better-than-expected profits, driven by strong sales growth outside the Americas. J.M. Smucker also exceeded profit expectations, leading to a 4.6% rise in its shares.

Robinhood Markets announced a 6.4% increase in shares after revealing its agreement to acquire Bitstamp, a cryptocurrency exchange. The deal, subject to regulatory approvals, is expected to bring in customers from around the world, including the European Union and Asia.