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Highlights:
- Market Decline: On Wednesday, the Dow Jones Industrial Average (DJI), S&P 500 (SPX), and Nasdaq Composite (IXIC) all closed lower, failing to fully recover from Monday's sell-off. The Dow fell 234.21 points, the S&P 500 declined 0.77%, and the Nasdaq dropped 1.05%.
- Tech Stock Impact: A significant afternoon downturn in major tech stocks like Nvidia (NASDAQ:NVDA), Super Micro Computer (NASDAQ:SMCI), Tesla (NASDAQ:TSLA), and Meta Platforms (NASDAQ:META) contributed to the market's overall decline. Nvidia pulled back 5.1%, Super Micro Computer plummeted 20.1%, Tesla lost 4.4%, and Meta shed 1%.
- Market Volatility: The benchmark 10-year Treasury yield (TNX) continued to rise, reaching 3.95%, while the Cboe Volatility Index (VIX), Wall Street’s “fear gauge,” remained elevated at nearly 28. Despite some reassurance in recent days, uncertainties such as the yen carry trade unwind and geopolitical headwinds persist, contributing to ongoing market volatility.
Stocks closed lower on Wednesday as the market's attempt to fully recover from Monday’s sell-off failed. The Dow Jones Industrial Average (DJI) fell 234.21 points, or 0.60%, to 38,763.45. The S&P 500 (SPX) declined 0.77% to end at 5,199.50, while the Nasdaq Composite (IXIC) dropped 1.05% to close at 16,195.81.
At session highs, the Dow surged 480.30 points, the S&P 500 jumped 1.73%, and the Nasdaq was up more than 2%.
A rollover in Nvidia (NASDAQ:NVDA) and other major tech stocks led to the major averages tumbling in the afternoon. Nvidia pulled back 5.1%, while shares of Super Micro Computer (NASDAQ:SMCI) plummeted 20.1% after the server company’s fiscal fourth-quarter earnings missed analyst estimates. Tesla (NASDAQ:TSLA) also lost 4.4% and Meta Platforms (NASDAQ:META) shed 1%.
The benchmark 10-year Treasury yield (TNX) continued its climb, rising about six basis points to 3.95%, returning to its level prior to Friday's weak jobs numbers that raised concerns of an economic downturn.
The Cboe Volatility Index (VIX), Wall Street’s “fear gauge,” was last trading at nearly 28 after falling to as low as 22 earlier on Wednesday. The sharp decline from roughly 65 on Monday indicates that while investors’ fears are abating, they remain elevated from their initial levels at the start of the month.
“There’s been some reassurance over the last couple days that things have calmed down a bit. But there are still quite a few unknowns on the horizon, such as how much more unwind there is on the yen carry trade, as well as geopolitical headwinds,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.
On Tuesday, the S&P 500 and the Nasdaq each advanced 1%, while the 30-stock Dow added nearly 300 points. On Monday, the Dow and the broad-market S&P 500 posted their worst session since 2022, fueled by recession worries and the unwinding of the yen carry trade.
