The US stock market struggled on Thursday as lingering concerns over economic uncertainty and Federal Reserve policy pressured equities.
The S&P 500 dropped 0.22% to close at 5,662.89, while the Nasdaq Composite fell 0.33% to 17,691.63, weighed down by losses in Apple and Alphabet.
The Dow Jones Industrial Average dipped slightly by 11.31 points to 41,953.32, reflecting investor caution.
Fed policy and tariff concerns add to market jitters
The pullback came a day after the Federal Reserve kept interest rates unchanged and projected two rate cuts in 2025.
Fed Chair Jerome Powell flagged tariffs as a growing concern, warning that trade restrictions could weigh on consumer spending and economic growth.
The central bank also raised its inflation forecast and revised its GDP growth outlook, amplifying fears of economic slowdown.
Investors are closely watching President Donald Trump’s tariff policies, particularly as an exemption for select Canadian and Mexican imports expires on April 2.
Many traders expect the Fed to hold off on policy changes until the economic impact of the tariffs becomes clearer.
Meanwhile, Accenture shares plunged over 7% after revealing that its federal services division had lost key government contracts due to budget cuts under the Trump administration.
The consulting firm cited tighter government spending as a major headwind in its second-quarter earnings call.
In the auto sector, General Motors and Hyundai Motor are close to a deal to collaborate on electric commercial vans, according to a Reuters report.
The agreement could also see GM supplying pickup trucks to Hyundai, expanding the South Korean automaker’s EV portfolio.
Wall Street sees energy stocks as top Q2 bet
According to FactSet, 65% of analyst ratings on energy stocks are buys, making it the most favored sector on Wall Street heading into the second quarter.
Information technology and communication services follow closely, with 63% buy ratings, while consumer staples are the least favored, receiving just 41% buy ratings.
Meanwhile, the Wells Fargo Investment Institute (WFII) is urging investors to take advantage of the recent market pullback, dismissing recession fears as overblown.
In other developments, Bernstein has named Walmart a “structural winner” with US e-commerce sales reaching $1.2 trillion annually,
Tesla sees record retail investor inflows despite stock slump
Tesla has experienced its longest losing streak on record, yet retail investors remain undeterred.
Data from JPMorgan reveals that individual investors have poured $7.3 billion into Tesla over the past 12 consecutive trading sessions, marking the highest retail inflow in over a decade.
Despite recent declines, this underscores strong retail support for the EV giant.
Investor sentiment remains unusually bearish
The latest American Association of Individual Investors (AAII) survey shows persistent bearish sentiment among retail investors.
While bullish views ticked up to 21.6%, they remain far below the historical average of 37.5%.
Bearish sentiment has exceeded 57% for four straight weeks, marking the longest such streak since AAII began tracking investor sentiment in the late 1980s.
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