NEW YORK, July 16 (Xinhua) -- U.S. stocks closed lower on Thursday, as high-profile technology delays and slowing retail activity prompted investors to aggressively reassess high-flying AI valuations.
The Dow Jones Industrial Average fell by 105.67 points, or 0.20 percent, to 52,552.97. The S&P 500 sank 38.63 points, or 0.51 percent, to 7,533.77. The Nasdaq Composite Index shed 387.281 points, or 1.47 percent, to 25,881.946.
Eight of the 11 primary S&P 500 sectors ended in green, with consumer staples and health leading the gainers by going up 2.90 percent and 2.21 percent, respectively. Communication services and technology led the laggards, falling 2.85 percent and 1.77 percent, respectively.
The chip sector faced widespread downward pressures. The chip slide impacted the memory storage sector, with SanDisk and Western Digital Corporation both ending lower.
Alphabet fell nearly 4.5 percent following industry reports that it delayed the public deployment of its highly anticipated, next-generation AI model, Gemini 3.5 Pro. The development sparked a broader retreat across mega-cap growth stocks, dragging Meta Platforms, Nvidia, and Amazon into negative territory.
On the economic front, the U.S. Commerce Department reported that retail sales edged up just 0.2 percent in June. The reading marked a steep deceleration from May's revised 1-percent surge and fell short of the 0.3-percent expansion expected by economists. Financial analysts expressed concern over the reading, noting that consumer spending slowed despite major international tourism draws, including the ongoing FIFA World Cup hosted across North America, and summer online discount events.
Conversely, the U.S. Labor Department reported that initial claims for state unemployment benefits dropped by 8,000 to a seasonally adjusted 208,000 for the week ending July 11. It aligned with the Federal Reserve's newly published Beige Book, which characterized employment as rising on balance. The Fed's report highlighted that five regional districts logged modest-to-solid payroll expansions, while seven reported little to no net change.
Dallas Federal Reserve President Lorie Logan, asserting that this week's good inflation news wasn't good enough, on Thursday called for "modestly" higher interest rates by the Federal Open Market Committee (FOMC).
"I currently believe modestly higher interest rates would better balance the outlook and risks for the FOMC's dual mandate goals," Logan said in prepared remarks for a speech in Houston. "Every month of above-target inflation has compounded the strain on Americans' budgets."
On the earnings front, the Q2 corporate earnings season remained strong. Of the 40 S&P 500 components that have filed financial disclosures, more than 87 percent have delivered positive results.
Meanwhile, commodity traders closely monitored the volatile security landscape as the military conflict between the United States and Iran continued to simmer. Global crude futures finished the session modestly lower.
West Texas Intermediate crude for August delivery dropped 0.82 percent to settle at 78.95 U.S. dollars a barrel on the New York Mercantile Exchange. Similarly, Brent crude for September delivery decreased by 0.85 percent to finish at 84.23 dollars a barrel on the London ICE Futures Exchange. ■
