Dow Jones falls 300 points from highs to end with losses ahead of a major event on Friday

US benchmarks took a pause on Thursday, ending below the flat line after a three-day rally amidst lingering trade uncertainties.

The Dow Jones ended little changed but fell 300 points from the highs, while the S&P 500 and Nasdaq shed 0.2% and 0.3% respectively.

Equities erased earlier gains. Not only does sentiment remain fragile just a week after the S&P 500 slipped into a correction, the market is set for a big test on Friday. That’s when an estimated $4.5 trillion of options contracts expire in an event ominously known as triple witching that often stokes volatility.
In late hours, FedEx Corp. — an economic barometer — sank after cutting its profit outlook. Micron Technology Inc. gave an upbeat sales forecast. Nike Inc.’s results surpassed analysts’ expectations but those shares too fell in extended trading.
“While the bottom of the recent correction is likely in, we probably haven’t seen the end of volatility,” said Daniel Skelly, head of Morgan Stanley’s Wealth Management Market Research & Strategy Team. “Policy uncertainty hasn’t disappeared, and the market remains sensitive to sentiment shifts.”

The yield on 10-year Treasuries was little changed at 4.24%. The dollar rose 0.3%. The pound held losses as the Bank of England voted to stay put on rates amid a turbulent global backdrop.

At Bespoke Investment Group, the strategists say the S&P 500 is looking to find some semblance of stabilization from what has practically been a straight down leg lower.

Bespoke also highlighted the weekly survey from the American Association of Individual Investors showing that bearish sentiment came in at 58.1%. That marks the fourth straight week of readings above 55%, which has never happened in the survey’s history, the Bespoke strategists noted.

To Solita Marcelli at UBS Global Wealth Management, optimizing cash holdings and seeking durable income should remain a strategic priority. Cumulative returns on US stocks are more than 200 times higher than for cash since 1945, underlining that the long-term underperformance of cash is a structural phenomenon, she noted.

(With Inputs From Agencies.)