Banks slump as ASX opens sharply lower
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Healthcare stocks were the biggest drag on the market. Eli Lilly & Co. fell 2.6 per cent, UnitedHealth Group slid 6.2 per cent and Bristol-Myers Squibb lost 5.9 per cent.
About 70 per cent of stocks in the S&P 500 lost ground, but big technology stocks with hefty values helped temper the impact of losses in health care and other sectors.
Technology stocks rose following results from big companies showcasing advancements in artificial intelligence.
Meta Platforms, the parent company of Facebook and Instagram, surged 11.3 per cent after it crushed Wall Street's sales and profit targets even as the company continues to pour billions into artificial intelligence.
Microsoft jumped 4 per cent after also posting better results than analysts expected. The software pioneer also gave investors an encouraging update on its Azure cloud computing platform, which is a centrepiece of the company's artificial intelligence efforts.
Apple and Amazon reported their results after the closing bell. Apple forecast revenue well above estimates, following strong June-quarter results supported by customers buying iPhones early to avoid Trump's tariffs.
Chief financial officer Kevan Parekh said the company expected revenue growth for the current quarter in the 'mid to high single digits', which exceeded the 3.27 per cent growth to $US98.04 billion ($152 billion) that analysts expected, according to LSEG data. Apple shares are 3 per cent higher in after-hours trading.
Amazon posted higher fiscal second-quarter profit and sales, underscoring its resilience despite tariff uncertainty. The company also offered on Thursday a sales outlook for the current quarter that beat analysts' projections. Still, its shares fell 5 per cent in after-market trading.
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Earnings remained a key focus outside the technology sector in what has been a heavy week so far for corporate financial results. CVS Health rose 0.3 per cent after it topped Wall Street expectations for the second quarter and raised its full-year forecast again.
Wall Street is also monitoring the latest economic data, which included an update on inflation.
The Commerce Department said prices rose 2.6 per cent in June compared with a year ago, as measured by the personal consumption expenditures index. That's the Federal Reserve's preferred measure for inflation. The latest reading was slightly higher than economists expected and also marks an increase from an annual pace of 2.4 per cent in May.
Results from another measure of inflation earlier this month, the consumer price index, also showed inflation rising in June.
Also on Thursday, a report showed that the number of Americans filing for unemployment benefits inched up last week.
The latest updates on inflation and the jobs market are landing amid lingering concerns about the impact of tariffs. Inflation's temperature is being closely monitored by businesses and the Fed to better gauge the impact of Trump's on-again-off-again approach to import taxes. Companies including Ford and Hershey's have more recently warned that tariffs are weighing on their latest and projected financial results.
Trump has said he will levy tariffs against goods from dozens of countries if they don't reach agreements with the US by Friday. The latest developments in the seemingly unpredictable tariff landscape include a potential pause in tariff escalations with China and a deal with South Korea.
Wall Street has been tempering their expectations for rate cuts at the Fed's next meeting in September. Traders now see a 39 per cent chance of a rate cut, according to data from CME Group. That's down from 58.4 per cent a week ago and a 75.4 per cent chance a month ago.
Treasury yields held steady in the bond market. The yield on the 10-year Treasury slipped to 4.36 per cent from 4.37 per cent late on Wednesday. The yield on the two-year Treasury remained at 3.94 per cent from late Wednesday.
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