S&P 500 Ends Lower Amid Turmoil, as Cisco, Apple Sink

The S&P 500 ended lower after a volatile session on Thursday, with Cisco Systems slumping after giving a dismal outlook, while investors fretted about inflation and rising interest rates.

Shares of Cisco slumped after the networking gear maker lowered its 2022 revenue growth outlook, taking a hit from its Russia exit and component shortages related to COVID-19 lockdowns in China.

Apple and chipmaker Broadcom both declined and weighed on the S&P 500.

"The reality is that inflation is running hot and interest rates are rising," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis, Minnesota. "Until you get that inflation rate to start slowing, we're going to have increased volatility, and in our view that continues through throughout most of the summer months."

Twitter climbed after Bloomberg reported that company executives told staff that Elon Musk's $44-billion deal was proceeding as expected and they would not renegotiate the price.

The S&P consumer staples index fell to its lowest level since December as retail firms face the brunt of rising prices hurting the purchasing power of U.S. consumers.

Kohl's Corp became the latest retailer to flag a hit from four-decades high inflation as the department store chain cut its full-year profit forecast.

Its shares, however, rebounded after slumping 11% in the previous session due to dismal results from Target Corp.

The S&P 500 is down about 18% from its record close on Jan. 3 as investors adjust to strong inflation, geopolitical uncertainty stemming from the war in Ukraine and tightening financial conditions with the U.S. Federal Reserve raising rates.

A close below 20% for the benchmark index would confirm bear market territory, joining its tech-heavy peer Nasdaq.

Goldman Sachs strategists predicted a 35% chance of the U.S. economy entering a recession in the next two years, while the Wells Fargo Investment Institute expects a mild U.S. recession at the end of 2022 and early 2023. According to preliminary data, the S&P 500 lost 22.41 points, or 0.57%, to end at 3,901.27 points, while the Nasdaq Composite lost 29.51 points, or 0.26%, to 11,388.64. The Dow Jones Industrial Average fell 233.00 points, or 0.74%, to 31,257.07.

Thursday's mixed performance followed a drop of over 4% in the S&P 500 on Wednesday, the benchmark's worst one-day loss since June 2020.

The CBOE volatility index, also known as Wall Street's fear gauge, fell to 29.5 points on Thursday, after hitting its highest level since May 12 earlier in the session.

Canada Goose Holdings Inc jumped after it forecast upbeat annual earnings, encouraged by strong demand for its luxury parkas and jackets.