Stocks close lower, with Nasdaq down 1.6% as Big Tech leaders Meta and Microsoft decline after earnings

The three leading U.S. indexes finished lower on Thursday.

The Nasdaq Composite pulled back 1.57% to close at 23,581.14, while the S&P 500 shed 0.99% to 6,822.34. The Dow Jones Industrial Average also slid 109.88 points, or 0.23%, to 47,522.12.

— Sean Conlon

Potential U.S.-China trade stability in the wake of agreements made between President Donald Trump and Chinese President Xi Jinping could lead to gains for the market, Wolfe Research said Thursday.

"This truce does not resolve fundamental issues in the U.S.-China relationship or reverse the long-term trend toward decoupling and confrontation — but a simple truce is good enough for markets," Tobin Marcus, the firm's head of U.S. policy and politics, wrote. "What markets need is stability on U.S.-China trade tensions, and we largely accept at face value that today's agreement will stabilize the relationship for the next year."

"It's certainly possible we see some flare-ups in the year ahead, but we don't see much risk of a total blow-up. And with other tailwinds for markets, from rate cuts to stimulus to earnings, a year's worth of stability should clear the way for the rally to continue," he said.

— Sean Conlon

Between the latest interest rate decision from the Federal Reserve and earnings, any potential slide could give investors a chance to increase share purchases, according to Scott Wren, senior global market strategist at the Wells Fargo Investment Institute.

"Investors are hearing a lot of headlines this week, but our suggestion is to look through the noise of the day and focus on the trends in place and those likely to offer attractive returns looking ahead," Wren wrote in a recent note. "We continue to see pullbacks, should they occur, as buying opportunities and are targeting 7,400 – 7,600 for the S&P 500 by the end of next year."

— Sean Conlon

Berkshire Hathaway sold 401,514 shares of DaVita, a provider of kidney dialysis services, for $54.3 million on Monday, according to a new regulatory filing.

Berkshire has an agreement with DaVita under which the health care company will buy back shares each quarter to reduce Berkshire's stake to 45%. After Monday's sale, Berkshire's holding in the company is just below that threshold.

The stock, which Berkshire first bought in 2011, is still the conglomerate's 10th biggest holding. Berkshire's DVA stake is believed to be the work of portfolio manager Ted Weschler since his hedge fund had invested in the stock before he joined Berkshire in 2011.

Shares of DaVita are down 18% this year.

— Yun Li

The crucial contest to command the obesity drug space was on full display Thursday, with Eli Lilly reporting that sales of its weight-loss drug Zepound nearly tripled in the third quarter from the year-ago period and Mounjaro, which has the same active ingredients but is indicated for type 2 diabetes, doubled from a year ago on the same basis. Combined the two GLP-1 drugs have raked in nearly $25 billion in sales year to date — a breath-taking figure when one considers that it tops Lilly's company-wide revenue for all of 2020.

Lilly's stock is up 9% so far this year, and was rallying 4% on Thursday after solidly beating analysts' third-quarter expectations and raising its forecast for the year.

"We see this as a positive surprise relative to expectations coming into the quarter and note this is the second straight guidance raise from LLY this year which underscores the company's dominance in the GLP-1 franchise," wrote Goldman Sachs analyst Asad Haider, in a note to clients.

Meanwhile, rival Novo Nordisk's stock was down about 2% as it entered a bidding war with Pfizer. The Ozempic maker is attempting to buy Metsera, which is developing its own obesity drug, for as much as $9 billion. Pfizer said in September that it would acquire the clinical-stage company for as much as $7.3 billion. (Both bids have milestone payments baked into them.) Pfizer shares are up about 1%, while Metsera shares soared 24%.

— Christina Cheddar Berk

• Cigna — Shares of the health insurance company after management said during an earnings call that it expects its pharmacy benefit services division to face margin pressure in the next few years.
• Cardinal Health — The drug and medical equipment distributor surged more than 12% on the heels of better-than-expected fiscal first-quarter results. Cardinal Health posted adjusted earnings of $2.55 per share on $64 billion in revenue, above the $2.18 per share and $59 billion in revenue that analysts were estimating, according to LSEG data. Cardinal also raised its full-year earnings guidance.
• CVS — The pharmacy benefit manager and drug store chain fell more than 4%. Management on its latest quarter earnings call warned that it is "taking a cautious outlook" on its Medicaid state business "in light of the broader pressures across the industry." CVS also said it expects "modestly lower growth' in its Caremark PBM business "as we continue our work to transition our contracts towards drug level pricing over the next few years."
• Bristol-Myers Squibb — The maker of Opdivo, a cancer immunotherapy treatment, climbed 5% after third-quarter results topped Wall Street and it raised the low end of full-year guidance. The drugmaker now expects to earn $6.40-$6.60 per share excluding one-time items in all of 2025 vs prior guidance of $6.35-$6.65.

— Fred Imbert

J.P. Morgan has unveiled a tokenized private-equity fund for qualified investors as its ramps up its blockchain-based product push, the Wall Street Journal reported Thursday.

The offering converts ownership in the fund to digital tokens that are issued on J.P. Morgan's private digital ledger called Kinexys.

The product rollout comes as J.P. Morgan experiments with offerings based on blockchain technology amid a boom in alternative digital assets such as stablecoins and tokenized treasuries and equities.

The bank, which launched its blockchain in 2019, plans to unveil its full-fledged fund tokenization platform Kinexys Fund Flow next year.

— Liz Napolitano

Chipotle shares fell more than 17% on Thursday, putting the stock on track for its worst day since 2012.

The burrito chain on Wednesday reported quarterly revenue that fell short of Wall Street's expectations, and also slashed its same-store sales forecast for the third straight quarter as the company noted a decline in visits from younger diners. Chipotle is expecting its full-year same-store sales to shrink by a low single-digit percentage in fiscal 2025, which came out as a surprise to investors.

— Pia Singh

Just five old economy stocks account for nearly all of the outperformance of the Dow Jones Industrial Average on Thursday, relative to the underperformance of both the S&P 500 and Nasdaq Composite Index.

• Goldman Sachs alone is lifting the DJIA by about 140 points in mid-morning trading
• Visa, Sherwin-Williams, JPMorgan and Caterpillar are all driving the DJIA higher by about 40 points each

Conversely, the three weakest stocks in the Dow Industrials are holding it back by some 200 points, combined.

• Microsoft alone is chopping of more than 70 points from the DJIA
• Boeing accounts for a 68-point decline
• UnitedHealth Group is holding back the benchmark average by 55 points

Because the 128-year-old Dow Industrial Average is calculated by the price of a company's shares rather than its total market value, every $1 move in any DJIA member stock sends the average higher or lower by 6.15 points.

— Scott Schnipper

Shares of Boeing were downgraded by Deutsche Bank to hold from buy on Wednesday, after the aircraft maker's latest financial results. The company topped expectations, but said it took a $4.9 billion charge on additional delays of its 777X wide-body plan.

Deutsche Bank reduced its free-cash-flow forecasts for 2026 to $2.1 billion, its 2027 forecast to $6 billion and its 2028 forecast to $11.2 billion.

"The driver of these negative revisions is lower unit accounting margin estimates, increased advances headwinds (that we now forecast running into 2027), less favorable inventory assumptions, and higher capex," analyst Scott Deuschle wrote in a note to clients.

That said, he believes Boeing's leadership is making the right decisions and is encouraged by the progress the company is making on its 737and 787 programs.

"Over the next few years, however, we think the financial picture of the company remains constrained by the burdens of the past, which are impacting the unit economics and working capital trends in the near-medium term," Deuschle said.

— Michelle Fox

The market could continue to face some pullback in the near term around whether the Federal Reserve will decide to cut interest rates again this year, according to Wharton School professor.

"This will slow down the bull market. I don't think it's going to stop the bull market," Siegel told CNBC's "Squawk Box" on Thursday.

His comments come a day after Fed Chair Jerome Powell said that another rate cut at its final meeting of the year in December is "not a foregone conclusion."

"They are looking at strength in the economy and basically saying that it's not a sure thing," Siegel added.

The Wharton professor also stressed that the next six weeks until the next time the Fed is scheduled to meet again are "very important," given that the conclusion of that meeting is a couple weeks before Christmas. That means that "we're going to get a good idea about how the consumer is going to be reacting to a number of tariff-increased prices from all the goods that they're going to buy for the holiday season," he said.

"We're also going to see whether layoffs from AI accelerate or not, so I think what they're saying is, 'I want to see that data,'" he continued. "Whether the government opens or not – and I certainly hope that by Dec. 10 it's going to be reopened – but I think they're going to have enough data."

— Sean Conlon

Stocks began Thursday's session in the red.

The Nasdaq Composite declined 1% shortly after 9:30 a.m. ET, and the S&P 500 dropped 0.6%. The Dow Jones Industrial Average also fell 58 points, or 0.1%. 

— Sean Conlon

Check out the companies making headlines before the bell.

Alphabet — The search giant jumped more than 7% after strong results that were boosted by revenue from Google Cloud and YouTube advertising. Alphabet earned $3.10 per share, on an adjusted basis, more than the $2.33 per share expected by analysts polled by LSEG. Revenue of $102.35 billion exceeded the $99.89 billion consensus estimate.

Meta Platforms — The Instagram parent slumped more than 8% after raising its capital expenditures outlook to invest more in artificial intelligence. Meta expects to spend between $70 billion and $72 billion, up from previous guidance of $66 billion to $72 billion. The forecast overshadowed better-than-expected earnings and revenue in the third quarter.

Microsoft — The Windows and Xbox owner fell 2% after finance chief Amy Hood said capital spending will accelerate this fiscal year. Microsoft posted better-than-expected results in its fiscal first quarter as revenue from its Azure cloud business soared 40%.

Read the full list here.

— Sarah Min

Restaurant Brands International on Thursday reported quarterly earnings and revenue that beat analysts' expectations, fueled by growth of its international restaurants and Tim Hortons.

Combined, the two divisions account for roughly 70% of the company's earnings, according to CEO Josh Kobza.

Shares of Restaurant Brands rose 3% in premarket trading. Read more.

— Amelia Lucas

Eli Lilly on Thursday reported third-quarter earnings and revenue that topped estimates and hiked its full-year outlook, as the company continued to see strong demand for its blockbuster weight loss drug Zepbound and diabetes treatment Mounjaro.

Shares of the company rose 5% in premarket trading Thursday.

The pharmaceutical giant now expects its fiscal 2025 revenue to come in between $63 billion and $63.5 billion, up from a previous guidance of $60 to $62 billion. Eli Lilly also expects full-year adjusted profit to come in between $23 and $23.70 per share, up from its previous outlook of $21.75 to $23 a share.

Eli Lilly said the guidance reflects President Donald Trump's existing tariffs as of Thursday, but does not include his threatened levies on pharmaceuticals imported into the U.S. Read more.

— Annika Kim Constantino

Comcast topped Wall Street earnings and revenue estimates for the third quarter on Thursday, despite once again reporting a loss in broadband customers. 

The company said it lost 104,000 domestic broadband customers during the period, bringing its total subscriber base to roughly 31.4 million. This marked the fourth quarter in a row that Comcast failed to grow its broadband customer base. 

Earlier this year the company outlined initiatives meant to drive broadband growth — the cornerstone of Comcast's business — as it has faced fraught competition from alternative providers, namely 5G companies. The company, soon to be led by co-CEOs Brian Roberts and Mike Cavanagh, will be even more reliant on connectivity in the new year after its planned Versant transaction to offload cable network assets. 

Still, Comcast's business, which consists of the Xfinity-branded broadband, cable TV and mobile group as well as NBCUniversal, outperformed Wall Street's estimates. 

Shares of the company rose about 2.5% in premarket trading. Read more.

— Lillian Rizzo

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC upon Comcast's planned spinoff of Versant.

U.S.-listed rare earth miners rose broadly on the news, with USA Rare Earth and MP Materials gaining 4.5% and 3.3%, respectively.

— Fred Imbert

Merck shares were down 2% in the premarket after the pharma giant posted mixed third-quarter results.

The company earned an adjusted $2.58 per share on revenue of $17.28 billion. Analysts expected a profit of $2.35 per share on revenue of $16.96 billion. However, revenue from Keytruda came in at $8.14 billion, slightly below a StreetAccount consensus of $8.24 billion.

— Fred Imbert

President Donald Trump and Chinese President Xi Jinping concluded with the U.S. agreeing to cut fentanyl tariffs on China to 10%, while Beijing delayed the latest curbs on rare earth exports by a year. "Rare earth issue has been settled," Trump said.

However, China's rare earths restrictions announced in early April remain in place.

"China's leverage in rare earths and critical minerals processing will continue to surface episodically, effectively capping any escalation in bilateral tensions," Louise Loo, head of Asia economics at Oxford Economics, said in a note Thursday.

— Fred Imbert, Anniek Bao, Evelyn Cheng

Chipotle shares plunged about 15% in extended trading Wednesday. The burrito chain reported quarterly revenue that fell short of expectations and cut its same-store sales forecast for the third straight quarter.

Chipotle is expecting its full-year same-store sales to shrink by a low single-digit percentage in fiscal 2025 — a big change from February, when the burrito chain was projecting same-store sales would grow by a low to mid single-digit percentage.

CEO Scott Boatwright said the company is seeing "consistent macroeconomic pressures." Traffic fell by 0.8%, the third straight quarter of declines.

Chipotle, which typically serves higher income customers, is seeing consumers across all income cohorts visit less frequently, particularly individuals between the ages of 25 and 35 years old.

— Amelia Lucas, Pia Singh

Check out the companies making headlines in after-hours trading.

• Alphabet — Shares of the Google parent jumped nearly 5% on the back of strong results, which included better-than-expected Google Cloud revenue and YouTube advertising revenue. Alphabet earned $3.10 per share, on an adusted basis, topping the $2.33 per share estimate from LSEG. The search giant's revenue for the period came out at $102.35 billion, while analysts expected $99.89 billion in revenue.
• MGM Resorts — The casino hotel operator tumbled 6% postmarket Wednesday after third-quarter earnings fell short of estimates, hurt by declining visits to Las Vegas. It earned 24 cents per share after adjustments on revenue of $4.25 billion. Analysts expected MGM to earn 40 cents per share on $4.23 billion of revenue.
• Meta — Shares of Facebook parent Meta dropped nearly 9% after market close, despite having posted a beat on top and bottom lines. Meta reported adjusted earnings of $7.25 per share on revenue of $51.24 billion for the third quarter, while analysts polled by LSEG expected $6.69 per share on $49.41 billion in revenue. The company said it took a nearly $16 billion one-time charge during the period tied to U.S. President Donald Trump's Big Beautiful Bill and said it expects its capital expenditures to be higher in 2026 compared to this year.
• Chipotle — Shares of the Mexican food chain fell more than 13% after it cut its same-store sales forecast for the third-straight quarter. Chipotle said it has been seeing a decline in visitors to its restaurants. The company now expects fiscal 2025 same-store sales to be down by a low-single digit percentage rate.

For the full list, read here.

— Pia Singh

Shortly after 6 p.m. ET on Wednesday, futures tied to the S&P 500 and Nasdaq-100 futures dropped 0.2% and 0.3%, respectively. Futures tied to the Dow Jones Industrial Average lost 98 points, or 0.2%.

— Pia Singh