U.S. equities moved lower on Thursday as investors rotated out of technology stocks and into more cyclical names, while fresh labor data and a sharp drop in Coinbase shares added pressure to the broader market.
Key takeaways:
The S&P 500 fell 1.2%, while the Nasdaq dropped 1.8%.
Tech stocks underperformed as investors rotated into cyclical sectors.
Coinbase (COIN) slid sharply, extending its multi-month downtrend.
Initial jobless claims came in slightly above expectations, though still showing labor market resilience.
Coinbase Extends Downtrend
Shares of Coinbase Global (COIN) fell another 4% early Thursday, adding to a broader decline that has stretched back to October. The stock was trading around $141.19, down 7.6% on the session at one point, reflecting sustained selling pressure in crypto-related equities.
The weakness in Coinbase comes amid broader technology underperformance and ongoing sensitivity to macroeconomic data. Rising rate uncertainty and shifting investor preferences toward cyclical stocks have weighed on high-growth names, including crypto platforms.
Despite strength in the broader economy, COIN continues to struggle technically, with the stock trading well below key moving averages and showing little sign of near-term reversal.
Sector Rotation Pressures Tech
The S&P 500 declined 1.2%, while the Nasdaq Composite dropped 1.8%. The Dow Jones Industrial Average fell 1%.
Investors rotated into more cyclical areas of the market during the session. Walmart gained 3%, and Boeing rose 2%, signaling confidence in economic momentum. Meanwhile, large-cap technology stocks faced pressure. Apple and Amazon each slipped roughly 2%, and Cisco Systems plunged 11% after issuing disappointing forward guidance.
Strong Jobs Data Clouds Rate Outlook
Earlier in the week, markets reacted to a stronger-than-expected jobs report. Nonfarm payrolls rose by 130,000 last month, well above expectations, while the unemployment rate ticked down to 4.3% from 4.4%.
The robust labor data reassured investors concerned about a slowdown but complicated the Federal Reserve’s policy outlook. A resilient job market could mean fewer rate cuts if inflation remains elevated.
Jobless Claims and CPI in Focus
Initial jobless claims for the week ended February 7 declined from the prior week but came in slightly above forecasts. While the data suggests mild cooling, it does not indicate a sharp deterioration in labor conditions.
Markets are now turning their attention to Friday’s consumer price index report. Economists expect a 0.3% monthly increase in both headline and core CPI. A softer inflation reading could support rate-cut expectations, while another firm print may reinforce the current cautious tone across risk assets.
