On the day that the U.S. economy reported its largest quarterly decline in GDP on record, the Nasdaq Composite ticked up while both the Dow and S&P 500 posted relatively modest losses—a testament to the disconnect between Wall Street’s status quo and the depressed economic conditions currently impacting Main Street.
Shares of Amazon (+0.6%), Apple (+1.2%), Facebook (+0.5%), and Google parent Alphabet (+1%) all registered gains ahead of their earnings reports on Thursday afternoon, one day after the CEOs of the four tech giants appeared before a much-hyped congressional antitrust hearing on Capitol Hill. All four companies saw their stocks climb further post-close, after releasing largely positive results.
Big Tech’s success helped drive the Nasdaq up 0.4%, despite the U.S. reporting a historic 32.9% decline in GDP in the second quarter due to the coronavirus pandemic’s devastating impact on the American economy. Other major tech names like PayPal (+4.3%) and Qualcomm (+15.2%) saw their shares on the Nasdaq spike on the back of positive earnings reported after yesterday’s close.
While the Dow was initially down more than 300 points on Thursday morning, it clawed back some of those losses over the course of the day to finish 226 points (-0.85%) in the red. Likewise, the S&P rebounded to post a 0.4% loss; predictably, of the 11 industry sectors tracked by the index, information technology performed the best—gaining 0.53%.
Despite the stock market outperforming expectations, the bond market indicated growing anxiety over the direction of the U.S. economy—particularly on a day when President Trump questioned whether November’s presidential election should proceed as planned. The yield on the benchmark 10-year U.S. Treasury note fell below 0.55%, as investors flocked to the historically safe realm of U.S. government bonds.
Elsewhere, the U.S. dollar continued to sink in value, with the euro now trading at more than $1.18. Gold pulled back slightly amid a historic rally that has sent prices above $1,900 per ounce, while crude oil prices also slipped, with the benchmark Brent contract settling at just over $43 per barrel.
