Private equity pressure offsets industrial strength
Wall Street closed lower on Thursday as losses in private equity firms and weakness in major consumer names offset earnings driven gains in parts of the industrial sector. Concerns around credit quality and selective pressure from artificial intelligence disruption continued to shape trading.
Private equity stocks fell sharply after Blue Owl Capital said it would sell 1.4 billion dollars in assets and freeze redemptions at one of its funds to manage debt and return capital. Shares of Apollo Global Management, Ares Management, KKR and Carlyle Group declined between 1.9 percent and 5.2 percent. Blue Owl dropped 6 percent.
Apple and Walmart add to pressure
Apple fell 1.4 percent, exerting the largest single stock drag on the S and P 500. Walmart also declined 1.4 percent after newly appointed CEO John Furner issued a conservative fiscal 2027 outlook alongside a 30 billion dollar share buyback authorization.
AI linked technology stocks have experienced volatility in recent months amid concerns about stretched valuations and limited evidence that heavy spending on artificial intelligence is translating into sustained revenue and profit growth. Industries from software to logistics have also faced scrutiny as investors debate which business lines could face structural disruption.
Keith Buchanan of GLOBALT Investments said markets are recalibrating expectations. He noted that investors are assessing which sectors may face material threats from AI and that not all companies will meet earlier growth assumptions.
Industrial and energy gains limit losses
Deere rose 11.6 percent after raising its annual profit forecast and beating first quarter estimates, helping cushion broader declines. The S and P 500 energy sector gained 0.6 percent as crude oil prices advanced on mounting concerns over potential military conflict between the United States and Iran.
The financial sector fell 0.9 percent. Omnicom jumped 15 percent after reporting better than expected fourth quarter revenue, while Carvana slid nearly 8 percent following a profit miss. EPAM Systems dropped 17 percent after issuing cautious first quarter guidance.
Indexes close modestly lower
The S and P 500 declined 0.28 percent to 6,861.89. The Nasdaq Composite fell 0.31 percent to 22,682.73, and the Dow Jones Industrial Average dropped 0.54 percent to 49,395.16.
Declining stocks outnumbered advancers in the S and P 500 by roughly 1.5 to 1. The index recorded 27 new highs and 6 new lows, while the Nasdaq posted 62 new highs and 146 new lows. Trading volume was relatively light at 16.4 billion shares, below the 20 session average of 20.5 billion.
Fed outlook remains in focus
Minutes from the Federal Reserve’s latest policy meeting showed officials remain divided on the appropriate rate path later this year. Investors also reviewed weekly jobless claims that suggested a stabilizing labor market and are closely watching the upcoming Personal Consumption Expenditures report, the Fed’s preferred inflation gauge.
According to CME FedWatch data, interest rate markets currently assign about a 50 percent probability of a rate cut by the June policy meeting, leaving monetary policy expectations as a key driver for equities in the near term.
