U.S. stocks erased early gains on Thursday as investors braced for Netflix's (NFLX) earnings season to get into full swing.
The S&P 500 (^GSPC) remained near the flatline, while the Dow Jones Industrial Average (^DJI) rose about 0.3% after ending lower in the previous session. The Nasdaq Composite Index (^IXIC) fell 0.3%, extending Wednesday's losses.
Stocks have struggled on concerns that inflation is no longer cooling and that the Federal Reserve may ease its rate cuts. For this reason, company earnings are in the spotlight as investors focus on how well reports match their lofty expectations.
While TSMC's (TSM) latest quarterly results show signs of strong AI demand, the Taiwanese semiconductor giant offered a more cautious outlook for global markets outside of memory chips. However, the company warned of “insatiable” demand for AI as it posted a higher than quarterly profit.
Now, the earnings focus has shifted to Netflix, and the focus has shifted to tech stocks, including the “Magnificent” group. The streaming leader's financial update later on Thursday is being seen by some as the first real test for stocks this earnings season, as big-cap tech companies continue to play a big role in pushing the market higher. It is believed that this will happen.
Meanwhile, given the possibility of a “no-landing” for the economy, the market is still paying close attention to the debate over whether the U.S. Federal Reserve (Fed) may decide not to cut interest rates this year. Policymakers including John Williams and Rafael Bostic are scheduled to attend Thursday.
There were 212,000 new jobless claims filed for the week ending April 13, according to data released Thursday by the Labor Department. The figure was lower than the consensus estimate compiled by Bloomberg of 215,000.
US Treasury yields have recently fallen from five-month highs, easing pressure on stock prices. The 10-year US Treasury yield (^TNX) is hovering around 4.56%.
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