Stock market today: Wall Street steadies itself after its worst sell-off since 2022

NEW YORK (AP) — U.S. stocks are stanching the bleeding on Thursday, a day after their worst losses since 2022 led to a wipeout for financial markets circling the world.

The S&P 500 was edging down by 0.1% in morning trading, as highly influential Big Tech stocks steadied themselves following a sell-off triggered by profit reports from Tesla and Alphabet.

The Dow Jones Industrial Average was up 165 points, or 0.4%, as of 9:55 a.m. Eastern time, and the Nasdaq composite was 0.6% lower.

The mixed trading on Wall Street followed sharp drops elsewhere in the world. Stock indexes dropped 3.3% in Tokyo, 1.8% in Hong Kong and 1.7% in Paris as worries spread about whether companies globally would meet expectations for profit growth and about potential moves by central banks on interest rates. Tesla’s and Alphabet’s underwhelming profit reports had raised concerns the huge run for Big Tech stocks had gone overboard amid Wall Street’s frenzy around artificial-intelligence technology.

But a report showing the U.S. economy may have grown much more strongly during the spring helped support the market. Mixed profit reports from IBM, Hasbro and other big companies also kept stock indexes close to flat.

The U.S. economy grew at an estimated 2.8% annual rate from April through June, double the rate from the prior quarter and easily topping economists’ forecasts for 1.9%. That eases worries about a possible recession, or at least delays them further, even though interest rates remain high and are grinding down on the economy.

Perhaps just as importantly for Wall Street, the report on the economy wasn’t so hot that it fanned worries about upward pressure on inflation.

Because inflation has largely resumed its slowdown following a rough start to the year, traders are largely expecting the Federal Reserve to begin cutting its main interest rate in September, according to data from CME Group.

Such cuts would release pressure that’s built up on both the economy and financial markets, and investors are thinking it could offer a particularly big boost to smaller stocks and other areas of the market that have been left behind by Big Tech in recent years.

The Russell 2000 index of smaller stocks was up 0.9%, doing better than other market indexes. It’s up 8.2% this month, versus a 0.7% dip for the big stocks in the S&P 500, and has flipped the market’s leaderboard.

In the bond market, the yield on the 10-year Treasury slipped to 4.23% from 4.28% late Wednesday. It’s down significantly from its perch above 4.70% reached in April, which gives a strong boost to stock prices.

Hasbro jumped 5.8% after reporting stronger profit and revenue for the latest quarter than analysts expected, in part because of growth at its Wizards of the Coast business, which sells Magic: The Gathering and other games.

On the losing side of Wall Street was Ford Motor, which tumbled 16.7% after reporting profit that fell short of analysts’ expectations. Its second-quarter net income fell 4.7% as its combustion-engine unit posted a pretax loss because of rising warranty and recall costs.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.