Stocks close lower, traders await U.S. inflation data

The Dow Jones Industrial Average slipped 330.06 points, or 0.86%, to 38,111.48, the S&P 500 shed 0.6% to end at 5,235.48, and the Nasdaq Composite slipped 1.08% to 16,737.08

Stocks closed lower Thursday as Salesforce recorded its worst day in almost two decades. Traders also looked ahead to the release of crucial U.S. inflation data.

The DJIA slipped 330.06 points, or 0.86%, to 38,111.48. The S&P 500 shed 0.6% to end at 5,235.48. The Nasdaq Composite slipped 1.08% to 16,737.08, underscoring the weakness in technology names.

Salesforce slumped 19.7% after missing revenue expectations for the fiscal first quarter and providing a weak outlook, marking its worst session since 2004. AI company Nvidia also slipped more than 3%, notching its first negative session after its blockbuster earnings report last week. Microsoft dropped more than 3% for its worst day since October.

Those declines dragged on the major indexes given the companies’ weight in the market, masking strength elsewhere. For instance, though the S&P 500 as a whole took a leg down, more than 360 member stocks recorded gains. Meanwhile, the small cap-focused Russell 2000 added 1%.

Thursday’s moves come amid a tough, holiday-shortened trading week. The S&P 500 has slid nearly 1.3%, while the Nasdaq Composite has lost 1.1%, putting both on track to snap five-week winning streaks. The Dow has dropped more than 2%, on pace for its second consecutive losing week.

At this point, we are kind of in that one step forward, one step back kind of mentality, according to Jason Heller, executive vice president at Coastal Wealth. Following recent all-time peaks, traders are “taking some risk off the table.”

A rise in the 10-year Treasury yield has hurt investor sentiment this week. Higher yields can be bad news for stock investors, as they reduce the multiples traders are willing to pay for equities and make safer investments, such as Treasury bills and money market funds, more attractive. While the yield slid back below 4.6% on Thursday, it stayed above the 4.5% level, which is considered troublesome for stocks.