U.S. stocks closed down on Thursday, with the Dow dropping 234 points and the Nasdaq pulling back from its record high over 20,000 points set on the 11th. Poor earnings report from Adobe led to a sharp decline in its stock price. The U.S. November PPI rose more than expected, indicating inflation heating up.
At the close, the Dow Jones Industrial Average fell 234.44 points or 0.53%, to 43914.12 points; the Nasdaq decreased 132.05 points or 0.66%, to 19902.84 points; the S&P 500 index dropped 32.94 points or 0.54%, to 6051.25 points.
Software giant Adobe closed down 13.7%, marking its biggest single-day drop in two years after the company's revenue guidance for this quarter fell short of expectations, sparking investor concerns that it may be disrupted by emerging AI startups.
Other major tech stocks such as Nvidia, Meta Platforms, Alphabet, and Amazon also mostly declined, causing the Nasdaq to pull back from its record high over 20,000 points set on the 11th.
On the economic data front, a report from the U.S. Department of Labor stated that the November Producer Price Index (PPI) rose 3% year-on-year and 0.4% month-on-month. Market expectations were 2.6% and 0.2%, respectively. The revised October PPI year-on-year increase was revised up from 2.40% to 2.6%, and the month-on-month increase was revised up from 0.20% to 0.3%.
Another report from the Department of Labor showed that U.S. initial jobless claims unexpectedly rose last week, and the number of continued unemployment claims at the end of November continued to increase compared to the beginning of the year, due to cooling labor market demand.
The Department of Labor reported that for the week ending December 7, initial jobless claims increased by 17,000 from the previous week, with seasonally adjusted numbers rising to 242,000. Economists had previously expected the number to be 220,000.
The surge in initial jobless claims last week may reflect distortions in the labor market due to the Thanksgiving holiday rather than a sudden shift in employment market conditions.
In corporate news, Nvidia announced on Thursday that recent social media claims that Nvidia was halting supplies to the Chinese market were false rumors. The company stated in the announcement that China is an important market for Nvidia. Nvidia remains committed to providing the best quality and efficient products and services to its customers in China. Previously, Nvidia was under investigation by the market regulation authority for alleged violations of antitrust laws.
It was also reported that Nvidia, AMD, and Intel have joined forces to invest in a photonic chip startup called Ayar Labs, aimed at breaking past data transmission models, with the goal of placing photonic communication directly on the package rather than being limited by IO density issues, data rate scaling, and power inefficiency of electronic package-to-package interconnections.
Tesla drew attention as its stock hit an all-time high on the 11th, with the company's CEO Elon Musk's net worth reaching $400 billion, making him the first person in history to cross this milestone.
General Dynamics was downgraded by an institution, with Wells Fargo lowering its target price from $322 to $295.