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The Nasdaq Composite saw its steepest single-day drop in 18 months after comments from Donald Trump about Taiwan’s national security unsettled the market and sparked a sell-off in semiconductor stocks.
The S&P 500 fell by 1.39% to 5,588.27, while the Nasdaq Composite dropped 2.77% to 17,996.93. In contrast, the Dow Jones Industrial Average, which has lagged behind other major US indices this year, rose on Wednesday, achieving its third consecutive record high.
All of the "Magnificent Seven" technology stocks experienced declines. The Russell 2000, which tracks small-cap stocks, ended its five-day winning streak, closing 1.1% lower as optimism over imminent rate cuts faded.
In Asia, the Topix index declined by 0.9%, and the Nikkei 225 fell by 1.8%. South Korea experienced milder losses, with SK Hynix dropping 3% and Samsung Electronics falling 1.4%, leading to a 1.1% drop in the Kospi index. Stocks in Hong Kong and China also experienced slight declines.
Chinese equities slipped as investors awaited policy updates from a major leadership meeting in Beijing. The Shanghai Composite Index fell 0.4%, and the CSI300 index decreased by 0.5%.
In the commodities market, gold rose 0.18% to $2,462 per ounce, approaching its record high of $2,483.60 achieved the previous day.
Australian Bureau of Statistics data released on Thursday revealed a net employment increase of 50,200 in June, surpassing market predictions of 20,000. Full-time employment rose by 43,300, marking a second consecutive month of strong gains. However, the jobless rate inched up to 4.1% from 4.0%, contrary to forecasts for a steady outcome.
United Airlines forecasted earnings between $2.75 and $3.25 per share for the period from July to September, falling short of analysts' predictions of $3.38 per share. The US airline industry has faced challenges this summer due to an oversupply of domestic seats, leading to decreased fares as demand has not kept pace.
Attention is now focused on the European Central Bank’s policy decision, expected later today. The ECB is anticipated to maintain its current stance, with market predictions indicating two rate cuts by year-end and a total of five cuts by the end of next year. This outlook has not been contradicted by recent statements from ECB officials. The decision will be announced at 12:15 GMT, followed by a press conference with ECB President Christine Lagarde at 12:45 GMT.
