The S&P 500 and Nasdaq Composite dropped on Thursday, building on the previous session's losses as investors continued to dump some of 2024's leading technology stocks.

The S&P 500 declined 0.51% to finish at 5,399.22, while the Nasdaq dropped 0.93% to settle at 17,181.72. The Russell 2000 gained 1.26% as investors continued their rotation into small caps.

The Dow Jones Industrial Average outperformed the major averages, rising 81.20 points, {

Dow jumps 400 points, led to the upside by IBM and Salesforce

The Dow Jones Industrial Average surged 400 points during midday trading due to gains from IBM and Salesforce.

The technology stocks were the best performers in the 30-stock index, with IBM up more than 5%. Other prominent gainers included Boeing, Cisco Systems, Caterpillar and Johnson & Johnson, each adding at least 2%.

Six stocks hovered in negative territory, including McDonald's, Microsoft and Intel. Honeywell International was the worst performer, registering a 4% loss.

— Samantha Subin

Investors ditched tech for a second day. Nvidia lost 1.7%, while Advanced Micro Devices shed more than 4%. The VanEck Semiconductor ETF (SMH) sold off by nearly 2%, while Meta Platforms fell 1.7% and Microsoft slumped 2.5%. Alphabet declined more than 3%.

"There's a changing of the guard happening on Wall Street. The AI stocks that led on the way up are now leading on the way down," said Adam Sarhan, CEO of 50 Park Investments, adding that these movements are not uncommon during a bull market "great mini rotation."

"During bull markets, you see one sector lead, then it pauses, corrects and passes the baton," he said. "Think of it like a relay race over to another sector."

Investors also assessed a second-quarter GDP report that showed the economy grow 2.8%, much more than expected. Economists surveyed by Dow Jones had anticipated growth of 2.1%.

Wall Street came off a losing session, with the S&P 500 and Nasdaq suffering their biggest one-day pullbacks in more than a year. Those losses were spurred by disappointing tech earnings reports.

Investors have come to view the recent declines as a sign of an overdue correction in an overbought market, which is now seeing a rotation away from megacap tech into small-cap stocks and more cyclical areas.

Ford Motor shares tumbled 18.4% for their worst day since 2008{

Ford Motor heads for worst day since 2009

Shares of Ford Motor dropped more than 16% on Thursday, putting the automobile stock on pace for its worst session since May 2009.

The drop came after the company posted a large earnings miss, resulting from warranty issues. Ford posted adjusted earnings of 47 cents per share, falling short of the 68 cents expected by analysts polled by LSEG. Revenue came in at $44.81 billion, topping the $44.02 billion expected.

The declines rippled across the broader auto industry. General Motors slumped 4%, building on a 7% postearnings drop from the previous session. Stellantis fell 7% after posting a 48% drop in net profit during the first half.

— Samantha Subin, Mike Wayland

second-quarter earnings   ServiceNow Edwards Lifesciences

S&P 500 finishes lower, builds on Wednesday's losses

The S&P 500 and Nasdaq Composite fell Thursday as investors continued to ditch technology stocks.

The S&P 500 declined 0.5% to finish at 5,399.22, while the Nasdaq dropped 0.9% to settle at 17,181.72. The Russell 2000 gained 1.26% as investors continued their rotation into small caps.

The Dow Jones Industrial Average outperformed, rising 81.20 points, {=null}or 0.2%, to close at 39,935.07. The 30-stock index surged nearly 585 points, or about 1.5%, at session highs.

— Samantha Subin

Fundstrat's Mark Newton: Pullback for stocks did not do technical damage to rally

Mark Newton, head of technical strategy at Fundstrat, said on CNBC's "Power Lunch" that Wednesday's market pullback did not appear to do any damage to the technical setup of the bull market.

"The technicals haven't given us anything to be concerned about. Breadth levels are in good shape," Newton said.

"I don't think that we've seen anything that would really deter us from staying long this market, specifically on the small-cap side," he added.

— Jesse Pound

Railroad stocks are ‘trendless’ right now, Ari Wald says

Investors should be cautious when it comes to railroad stocks, according to Oppenheimer's Ari Wald. The firm's head of technical analysis says the stocks are "trendless."

"We're pretty much bullish on industrials for everything except for transports," he told CNBC's "The Exchange." "The sector neutral call is capital goods and infrastructure over transports, and that includes the rails, which are really just trendless at this point."

Wald adds that Norfolk Southern in particular is a "relative sell." Shares of the company, which is set to report earnings after the bell, are down nearly 5% this year.

"It underperforms a rising equity market," he continued. "There are more attractive opportunities out there."

— Sean Conlon

The small-caps trade now looks "full" after extreme outperformance, BTIG says

Small-cap stocks could see a short-term pullback after their recent outperformance, BTIG's Jonathan Krinsky said.

According to the analyst, the Russell 2000 has outperformed the Nasdaq-100 by roughly 18% over the last 11 sessions, marking its "most extreme" move since 2001, and one of the largest moves over the past 40 years.

"This comes on the heels of essentially 20 years of underperformance, so from a long-term perspective there certainly could be plenty more room to run in favor of RTY. In the short-term, however, this move looks 'full' and we likely see some 'reversal of the reversion,'" Krinsky said. "Things are moving so fast this might only be for a few days, but it could last longer depending on the velocity."

According to the analyst, funds such as the VanEck Semiconductor ETF (SMH), Invesco QQQ Trust Series I (QQQ) and Technology Select Sector SPDR (XLK) could probably outperform. The SPDR S&P Regional Banking ETF (KRE), SPDR S&P Biotech ETF (XBI) and iShares Russell 2000 ETF (IWM) could take a breather, meanwhile, he said.

— Pia Singh

Fed has 'foot stomped on the brake right now,' Goldman Sachs Asset Management leader says

The Federal Reserve's foot is on the brake when it comes to interest rates, according to Ashish Shah, co-head of Goldman Sachs Asset Management. He also said the start of easing will look more like slightly taking its foot off it, rather than hitting the gas pedal.

"They have their foot stomped on the brake right now," he said Thursday on CNBC's "Money Movers." "They're just going to be easing up off the break."

From there, Shah said investors will have to monitor when the central bank starts cutting interest rates more aggressively. Then, there will be more clarity on the state of the economy.

— Alex Harring

S&P 500 could slide further, Wells Fargo analyst warns

Another decline may be in store for the S&P 500, according to Wells Fargo analyst Christopher Harvey.

The broad index slid 2.3% on Wednesday, marking its worst day since 2022. Harvey told clients the S&P 500 "probably sees another 2% downside before we can discuss a bounce."

The firm kept its target at 5,535, which suggests upside of about 2% from Wednesday's close. For Harvey, the limited opportunity for return after the index's run this year is "not enough to put new money to work."

The S&P 500 is still higher by more than 15% on the year.

— Alex Harring

Value stocks are beating growth stocks by 500 basis points in July

The much-observed rotation out of megacap and large-cap stocks into small- and mid-cap companies is only part of the turn in the market this month. Value stocks are suddenly beating growth stocks, too.

While the iShares Russell 1000 Value ETF is higher by almost 3.6% in July, the iShares Russell 1000 Growth ETF is down more than 2.4%. This week alone, while the value exchange-traded fund is ahead 0.5%, the growth ETF has slumped almost 1.8%.

— Scott Schnipper

Cryptocurrencies suffer alongside tech stock rout

Cryptocurrencies fell one day after a reversal in technology stocks pushed the S&P 500 and Nasdaq Composite to their worst day since 2022.

Bitcoin was lower by 1% at $65,039.41 on Thursday, according to Coin Metrics. Disappointing quarterly earnings from Alphabet and Tesla late Tuesday weighed on the rest of the tech sector as investors rotated out of high-risk assets, including cryptocurrencies.

Meanwhile, ether fell 6% to $3,158.50 as newly launched ether exchange-traded funds traded for a third day. The Grayscale Ethereum Trust (ETHE), which converted to an ETF, saw $484 million in outflows in the previous session.

With cryptocurrencies lower across the board, crypto-related stocks also retreated. Coinbase fell 3%, while MicroStrategy was down 2%. One of the most popular mining stocks, Iris Energy, lost 5%, while Riot Platforms dipped 3%.

For more on what is driving the action in crypto, read our full story here.

— Tanaya Macheel

Southwest stock rebounds from early losses

Investors appear to be buying Southwest's plan to boost revenue.

After the stock initially fell in premarket trading following its second-quarter report, shares of Southwest have turned around. The airline stock was up nearly 7% in afternoon trading.

Southwest's intraday low was $25.77 per share, or about 3% below its Wednesday close. The stock was even lower in premarket trading.

— Jesse Pound

Stocks making the biggest moves midday

Here are the stocks on the move midday:

• Ford Motor — The automaker's stock fell more than 17% after reporting second-quarter earnings that missed Wall Street's expectations. Ford posted adjusted earnings per share of 47 cents compared to the consensus forecast of 68 cents, according to LSEG. However, automotive revenue of $44.81 billion came in above the consensus estimate of $44.02 billion.
• Viking Therapeutics — Shares surged more than 33% following the drug developer's announcement that its experimental obesity treatment, VK2735, will be moved to a phase 3 clinical trial. The company also said an oral version of the drug will begin phase 2 trials in the fourth quarter.
• Molina Healthcare — Shares advanced more than 15% after the company reaffirmed its full-year guidance for adjusted earnings of at least $23.50 per share. This is slightly above the $23.09 per share that analysts polled by FactSet were expecting. Molina's earnings and revenue also beat expectations for the second quarter.

Read the full list here.

— Sean Conlon

Lineage begins trading

Shares of Lineage popped more than 5% in its debut after the largest temperature-controlled warehouse real estate investment trust, or REIT, in the world went public.

Lineage opened at $82.00 on the Nasdaq under the ticker "LINE." The company raised $4.4 billion at an implied valuation over $18 billion, making it the biggest public offering of the year.

— Sean Conlon

Health-care ETFs touch all-time highs Thursday

Two leading health-care exchange-traded funds touched all-time highs on Thursday as part of the recent rotation away from megacap growth stocks.

The $40 billion Health Care Select Sector SPDR Fund has Eli Lilly as its largest single holding, accounting for 12.4% of the portfolio, according to FactSet data. Eli Lilly has been in the vanguard of the GLP-1, anti-obesity drug treatments.

Vanguard Health Care Index Fund ETF has $18 billion in assets, with 11.9% of that in Eli Lilly shares.

The SPDR health-care ETF is ahead 6.8% over the past three months, while Vanguard's health-care ETF is higher by 7.19%. The SPDR health-care ETF has an expense ratio of 0.09% against the Vanguard ETF's expense ratio of 0.10%.

— Scott Schnipper

Dow jumps 400 points, led to the upside by IBM and Salesforce

The Dow Jones Industrial Average surged 400 points during midday trading due to gains from IBM and Salesforce.

The technology stocks were the best performers in the 30-stock index, with IBM up more than 5%. Other prominent gainers included Boeing, Cisco Systems, Caterpillar and Johnson & Johnson, each adding at least 2%.

Six stocks hovered in negative territory, including McDonald's, Microsoft and Intel. Honeywell International was the worst performer, registering a 4% loss.

— Samantha Subin

Ford Motor heads for worst day since 2009

Shares of Ford Motor dropped more than 16% on Thursday, putting the automobile stock on pace for its worst session since May 2009.

The drop came after the company posted a large earnings miss, resulting from warranty issues. Ford posted adjusted earnings of 47 cents per share, falling short of the 68 cents expected by analysts polled by LSEG. Revenue came in at $44.81 billion, topping the $44.02 billion expected.

The declines rippled across the broader auto industry. General Motors slumped 4%, building on a 7% postearnings drop from the previous session. Stellantis fell 7% after posting a 48% drop in net profit during the first half.

— Samantha Subin, Mike Wayland

Dollar index ticks up from lows against yen

The Dollar Index rose slightly from its overnight lows versus the Japanese yen on the back of the stronger-than-expected gross domestic product data for the second quarter.

The greenback strengthened 0.2% against the strengthening yen to 154.16. The dollar previously weakened to a low of 151.93 yen, its lowest level since May 3, when it reached 151.85.

— Hakyung Kim, Nick Wells

ServiceNow tracks for best day since late 2022 after earnings top expectations

ServiceNow headed for its best day in more than a year on Thursday after surpassing Wall Street's expectations for second-quarter earnings.

Shares of the software stock jumped around 12% in morning trading, If that holds through market close, it will mark the stock's biggest one-day advance since October 2022, when shares climbed more than 13% in a single session.

Thursday's gains come after the company posted $3.13 per share, excluding items, on $2.62 billion in revenue. Analysts polled by LSEG had anticipated just $2.84 per share and $2.61 billion of revenue.

"NOW defied the skeptics by reporting a stronger than expected 2Q," Mizuho managing director Gregg Moskowitz wrote in a note to clients following the report.

With that advance, ServiceNow appeared to buck the downtrend among some tech names. The Nasdaq Composite last traded down more than 1%.

— Alex Harring

Ether ETFs see net outflows on second day, JPMorgan says

Demand for the new ether exchange-traded funds looked softer on their second day, according to JPMorgan.

"We estimate U.S. spot Ether ETFs preliminary net redemptions of -$133mm on the group's second trading day — Wednesday, July 24, 2024. Gross flows (excl. Grayscale's legacy ETHE vehicle) were $193mn, a -67% decline from the prior day," analyst Kenneth Worthington said in a note to clients.

ETHE is the ticker for the Grayscale Ethereum Trust, which is the most expensive of the funds on a management fee basis. Grayscale's bitcoin fund also saw outflows when it converted to an ETF in January.

— Jesse Pound

Hasbro shares soar as digital gaming lifts second-quarter performance

Hasbro shares jumped about 7% as investors cheered the toymaker's turnaround efforts. Toy sales are continuing to shrink, but the launch of "Magic's Modern Horizons 3" in June helped propel its digital gaming results.

Hasbro earned $1.22 per share, excluding items, on $995 million in revenue, which was enough to beat analysts' estimates of 78 cents per share in earnings on $944 million in revenue, according to LSEG. The company also raised its forecast.

— Christina Cheddar Berk

Stocks open little changed

Stocks opened little changed on Thursday.

The Dow Jones Industrial Average dipped 7 points, while the S&P 500 and Nasdaq Composite hovered near the flatline.

— Samantha Subin

Stocks making the biggest moves premarket

Check out the companies making headlines before the bell:

• American Airlines — Shares dropped 6% after the carrier issued weak profit guidance for the third quarter. American Airlines estimates unit revenue will drop as much as 4.5% as the broader industry struggles with oversupply that has led to low fares.
• Honeywell — Shares were down nearly 5% after the industrial giant issued guidance that missed analysts' expectations, overshadowing better-than-anticipated quarterly figures. The company sees third-quarter earnings per share in a range of $2.45 to $2.55. That is below a StreetAccount forecast of $2.58 per share.
• Southwest Airlines — Shares of the discount airline fell 5% despite a second-quarter report that beat expectations. Southwest reported 58 cents in adjusted earnings per share on $7.35 billion of revenue. Analysts surveyed by LSEG were looking for a profit of 51 cents per share on $7.32 billion in revenue. The company warned its revenue per average seat mile may fall year over year in the current quarter, while nonfuel costs could jump as much as 13%.

The full list can be found here.

— Hakyung Kim

GDP rises much more than expected in Q2

U.S. real gross domestic product increased at a 2.8% annualized pace in the second quarter of 2024, easily beating a Dow Jones estimate for a 2.1% advance.

The data comes less than a week before the Federal Reserve's next policy meeting. Investors largely forecast the central bank to keep rates steady, but expectations for a September rate cut have been on the rise.

— Fred Imbert

Southwest slides after reporting earnings decline, announcing new seating plan

Southwest Airlines was down more than 5% in premarket trading after the discount airline released its second-quarter results and unveiled some new plans to boost revenue.

The second quarter itself was a success relative to Wall Street expectations. Southwest reported 58 cents in adjusted earnings per share on $7.35 billion of revenue. Analysts surveyed by LSEG were looking for 51 cents per share on $7.32 billion in revenue. Profit per share was down 46% year over year.

The third quarter could be a trouble spot, however. The company warned that revenue per average seat mile could decline 0% to 2% year over year while nonfuel costs jump as much as 13%.

The company, which has been under pressure from activist Elliott Investment Management, also announced that it would get rid of open seating and offer extra legroom.

— Jesse Pound

American Airlines drops 7% on disappointing guidance

American Airlines shares tumbled more than 7% after the company cut its profit forecast.

The airline said it expects adjusted earnings of 70 cents to $1.30 per share for the year, versus the $2.25 to $3.25 a share it guided for earlier this year. The forecast also fell short of the $1.10 to $2.60 a share expected by analysts polled by LSEG.

The company topped earnings expectations for the current quarter, but revenue came up short of expectations. American posted adjusted earnings of $1.09 per share on $14.33 billion in revenue.

— Samantha Subin, Leslie Josephs

Honeywell falls on weak third-quarter guidance

Honeywell shares were down 4.5% after the industrial giant issued guidance that missed analysts' expectations, overshadowing better-than-anticipated quarterly figures.

The company sees third-quarter earnings per share in a range of $2.45 to $2.55. That is below a StreetAccount forecast of $2.58 per share.

For the second quarter, Honeywell earned $2.49 per share on revenue of $9.58 billion. Analysts polled by LSEG expected a profit of $2.42 per share on revenue of $9.41 billion.

— Fred Imbert

Europe stocks open lower

European stock markets opened lower Thursday, with the Stoxx 600 index down 1.5% by 9:28 a.m. London time.

All sectors were in the red, with technology down 2.8% as a worldwide sell-off in the sector continues.

— Jenni Reid

Utilities sector shone while tech burned on Wednesday

Investors fled tech on the heels of disappointing quarterly results from a couple of big names, but utilities emerged as a bright spot amid the market sell-off.

The utilities sector jumped 1.16% on Wednesday, buoyed by NextEra Energy, up 4.6%, and Eversource Energy, up 3.6%. Consolidated Edison rounded out the top three names with a 2.8% gain.

NextEra's climb was powered by a second-quarter beat on adjusted earnings, which came in at 96 cents a share, versus consensus estimates for 95 cents a share, per FactSet.

The information technology sector, however, posted a 4.14% decline and its worst daily performance since Sept. 13, 2022. Big losers in that corner of the market include Broadcom, off 7.6%, and Nvidia, down 6.8%. Alphabet's 5% decline after quarterly results contributed to a nearly 3.8% slide for the communications services sector.

— Darla Mercado, Chris Hayes

Ford, ServiceNow, Chipotle are biggest movers in after-hours trading

Check out the companies making headlines after Wednesday's market close:

• Ford Motor — Ford shares tumbled 11% after the company's second-quarter earnings came in much lower than Wall Street expected due to longtime warranty issues. The automaker posted adjusted earnings per share of 47 cents, significantly less than analysts' forecast of 68 cents, per LSEG. Automotive revenue came out at $44.81 billion, slightly higher than the consensus call for $44.02 billion.
• ServiceNow — The software company jumped 6%. ServiceNow posted second-quarter adjusted earnings of $3.13 per share on revenue of $2.62 billion. Analysts polled by LSEG called for earnings of $2.84 per share and revenue of $2.61 billion.
• Molina Healthcare — The managed care company jumped 13%. Molina reaffirmed its full-year guidance for adjusted earnings of at least $23.50 per share, compared to consensus estimates of $23.09 per share, according to FactSet. Second-quarter results also beat expectations on the top and bottom lines.

For the full list, read here.

— Pia Singh

Stock futures open higher Wednesday evening

Futures tied to the Dow Jones Industrial Average jumped 78 points, or nearly 0.2%. S&P futures added 0.2%, while Nasdaq 100 futures advanced 0.3%.

— Pia Singh