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Highlights:
- Market Decline: The Nasdaq Composite (.IXIC) fell 1% due to a decline in technology shares and weak demand in a 10-year Treasury auction, contributing to investor jitters.
- Key Index Performance: The Dow Jones Industrial Average (.DJI) dropped 234.21 points (0.6%), the S&P 500 (.SPX) lost 40.53 points (0.77%), and the Nasdaq Composite (.IXIC) fell 171.05 points (1.05%).
- Individual Stock Movements: Walt Disney (NYSE:DIS) shares fell 4.5% due to forecasted demand moderation, Super Micro Computer (NASDAQ:SMCI) dropped 20.1% after reporting weak margins, and Dell Technologies (NYSE:DELL) declined by 4.9%.
U.S. stocks ended lower on Wednesday, with the Nasdaq Composite (.IXIC) falling 1% due to a decline in technology shares and weak demand in a 10-year Treasury auction, causing investor jitters in choppy trading. Indexes started the day higher with a surge in tech shares but began to lose steam in afternoon trading. Nervous investors, still reeling from a recent steep selloff in global stocks, further pared gains after the Treasury auction. All three major indexes turned negative, with losses steepening just before the close. The S&P 500 technology index (.SPLRCT) ended down 1.4%, becoming the biggest drag on the benchmark index.
Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, remarked, "There's just a lot to worry about over the next eight weeks or so, so I'm expecting more volatility. I wouldn't be surprised if after a few days of rally you have another small selloff."
Concerns over a potential U.S. recession and weaker forecasts from some major U.S. companies have been weighing on investors. The Dow Jones Industrial Average (.DJI) fell 234.21 points, or 0.6%, to 38,763.45, the S&P 500 (.SPX) lost 40.53 points, or 0.77%, to 5,199.5, and the Nasdaq Composite (.IXIC) dropped 171.05 points, or 1.05%, to 16,195.81.
Lindsey Bell, chief strategist at 248 Ventures in Charlotte, North Carolina, suggested that investors might also be taking profits after Tuesday's stock rebound.
On Monday, both the Nasdaq and S&P 500 fell by at least 3%. Stocks received early support on Wednesday following comments from Bank of Japan (BOJ) Deputy Governor Shinichi Uchida, who stated that the central bank would not raise rates when financial markets are unstable.
The BOJ's surprise rate hike on July 31, the first in 15 years, had sparked a global stock rout as investors unwound their yen carry trade positions following a surge in the low-yielding currency.
Shares of Walt Disney (NYSE:DIS) fell 4.5% after predicting a "moderation in demand" at its theme park business in the coming quarters. Super Micro Computer (NASDAQ:SMCI) shares dropped 20.1% after reporting quarterly adjusted gross margins below estimates. Rival Dell Technologies (NYSE:DELL) fell 4.9%.
Markets are now awaiting further commentary on monetary policy from U.S. central bank officials next week, leading up to the Jackson Hole, Wyoming, event where Fed Chair Jerome Powell is scheduled to speak.
Volume on U.S. exchanges was 12.93 billion shares, compared with the 12.63 billion average for the full session over the last 20 trading days. Declining issues outnumbered advancing ones on the NYSE by a 1.48-to-1 ratio; on Nasdaq, a 2.08-to-1 ratio favored decliners.
The S&P 500 posted 16 new 52-week highs and 9 new lows; the Nasdaq Composite recorded 34 new highs and 195 new lows.
