S&P 500 briefly crossed 6,400 for the first time ever before closing down 0.4%

The S&P 500 climbed over 6,400 for the first time on Thursday, setting a new record before rolling back as the day ended.

This was the third time in a week the benchmark crossed into all-time high territory, powered early on by strong tech earnings that couldn’t hold the broader market together.

According to data from CNBC, both the S&P 500 and the Nasdaq Composite briefly hit intraday highs before momentum faded and losses took over.

By the close, the S&P 500 had slipped 0.4%. The Nasdaq Composite gave up 0.1%, while the Dow Jones Industrial Average dropped 283 points, or 0.6%. The red wave was driven by weakness in multiple sectors, especially health care, even as tech stocks rallied hard.

Microsoft, Meta crush earnings but can’t lift the whole market

Tech names led early gains. Microsoft shot up 4% after reporting quarterly earnings that topped expectations. The company said its Azure cloud business pulled in over $75 billion in annual revenue. That was enough to lift its market cap to $4 trillion. Meta Platforms went further, surging 12% after giving an optimistic forecast for next quarter’s sales, well above what Wall Street expected.

Despite the jump, it wasn’t enough to carry the rest of the market. UnitedHealth dropped 5%, and Merck slid 4%, both dragging the Dow lower. In total, six of the eleven S&P 500 sectors ended in the red. Traders weren’t impressed by earnings alone.

“These market reactions—despite strong earnings, capex, and buyback activity—are becoming increasingly difficult to justify,” said Joseph Cusick, senior vice president and portfolio manager at Calamos Investments. “At the same time, downside moves have been relatively contained.”

Policy worries didn’t help. The Federal Reserve’s latest meeting left investors unclear on whether interest rates will be cut in September or later. Markets also braced for the White House’s tariff deadline on Friday. The administration is expected to raise tariffs sharply on trade partners like India and Brazil.

On top of that, President Donald Trump announced Thursday that the 25% tariff on Mexican imports will now run for another 90 days. That extension added more pressure to an already uncertain trade landscape.

Trade tensions rise as China talks stall

Tensions with China are also back in focus. Treasury Secretary Scott Bessent said Thursday that talks with Beijing are “at a point where both sides have the makings of a deal.” But he didn’t say what the deal includes or when it might happen. The current trade truce between the two countries runs out on August 12. No progress before then could trigger more tariffs.

Thursday wrapped up a solid month for the stock market overall. The S&P 500 is up over 2% in July, the Nasdaq Composite is up about 3%, and the Dow Jones has gained 0.4%. But most of that strength came earlier in the month. As of Thursday’s close, caution had clearly taken over.

More big tech earnings are still on deck. Both Apple and Amazon are set to release results after Thursday’s close.

The pharmaceutical sector continued to slide. Trump sent formal letters to 17 drugmakers, demanding they cut prices within 60 days. That news hit drug stocks hard. Merck dropped nearly 4%. Pfizer and Eli Lilly each lost nearly 2%.

Novo Nordisk fell by almost 5%, but that had more to do with HSBC downgrading the stock to hold from buy. The Danish drugmaker has now lost about 44% this year, and nearly 64% in the last 12 months.

Rajesh Kumar, an analyst at HSBC, said the weight-loss drug sector now looks mature. “Slower growth should imply lower multiples,” he said. The market for GLP-1 drugs is still big, with estimates ranging between $100 billion and $200 billion, but the hype has clearly cooled.

Elsewhere, Figma debuted on the New York Stock Exchange at $85 per share, more than double its IPO price of $33. Trading was briefly paused right after the open due to volatility. Minutes later, the stock blew past $100.

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