Wall Street closes lower as investors assess data

Wall Street closed lower on Thursday as investors evaluated key economic indicators ahead of the Federal Reserve's meeting next week.

The Nasdaq had surged past the 20,000 mark for the first time on Wednesday, driven by a strong rally in technology stocks.

Meanwhile, the S&P 500 reached its highest level in nearly a week, buoyed by an inflation report that solidified expectations for a 25-basis-point rate cut at the Fed's December 17-18 meeting.

Initial claims for US unemployment benefits unexpectedly climbed last week, raising concerns about labour-market resilience. US producer prices rose more than forecast in November, though a moderation in service costs pointed to a continuation of the broader disinflationary trend.

"Investors are just trying to suss out what is the Fed going to do next week? Is inflation really going to be a problem and the Fed has to really slow its role on rate cuts, or can they get there?" said Rob Haworth, senior investment strategist at US Bank Wealth Management in Seattle.

Haworth added there was profit-taking after the Nasdaq touched an all-time high on Wednesday.

Trader bets on the cut next week stand at over 98 per cent, according to CME's FedWatch Tool. However, they indicate expectations of a pause in January after several Fed officials last week urged caution over the pace of monetary policy easing as the economy remained resilient.

According to preliminary data, the S&P 500 lost 32.49 points, or 0.53 per cent, to end at 6,051.70 points, while the Nasdaq Composite lost 132.05 points, or 0.66 per cent, to 19,902.84. The Dow Jones Industrial Average fell 232.32 points, or 0.53 per cent, to 43,916.24.

Megacap and growth stocks exhibited mixed results, with Nvidia declining, while Microsoft gained.

Adobe plunged after the Photoshop maker forecast fiscal 2025 revenue below Wall Street expectations, weighing on the broader technology sector.

Wall Street's main indexes have hit record highs multiple times this year, fuelled by a rally in heavyweight tech stocks that capitalised on enthusiasm surrounding artificial intelligence and the Fed's interest-rate cuts.

US equities concluded a strong November following Donald Trump's presidential election victory, buoyed by expectations of business-friendly policies boosting corporate profits, and have started December on a broadly positive trajectory.

Warner Bros Discovery soared after the media company announced plans to separate its declining cable-TV business from streaming and studio operations.

Nordson slid as the dispensing-equipment maker forecast fiscal 2025 revenue below Wall Street estimates, while health insurer Centene rose after forecasting its 2025 profit above estimates.