Tech Sell-Off Intensifies as Markets Await Crucial Fed Signals
Tech Sell-Off Intensifies as Markets Await Crucial Fed Signals
U.S. stocks saw another significant dip on Wednesday, with the Nasdaq Composite leading the decline for a second consecutive day, pressured by a broad retreat in technology shares. The downturn comes as investors closely monitor a mixed bag of retail earnings and keenly anticipate key announcements from the Federal Reserve.
The Nasdaq Composite shed approximately 1%, while the S&P 500 slipped 0.5%. The Dow Jones Industrial Average also saw a modest decline of 0.1%, or 33 points. Profit-taking continued to impact heavyweight technology and semiconductor companies, reigniting concerns over their elevated valuations and the long-term viability of the AI-driven market rally. Major players like Nvidia, Advanced Micro Devices, Broadcom, Palantir, and Intel all experienced declines ranging from 3% to over 6%. Mega-cap tech giants including Apple, Amazon, Alphabet, and Meta also contributed to the broader tech sector’s struggles.
Analysts suggest that the current market volume, typically sparse in late August, is amplifying these swings beyond what fundamentals might ordinarily dictate, making profit-taking in recently high-performing tech stocks a logical move.
On the earnings front, Target shares plummeted over 8% following a reported decline in sales and the announcement of a new CEO. Conversely, Lowe’s saw a slight uptick after exceeding earnings expectations.
All eyes are now on the Federal Reserve as investors await the release of the July meeting minutes at 2 p.m. ET. While policymakers held rates steady last month, the notable dissent from two voting Fed officials for the first time since 1993 has added an element of uncertainty. This precedes crucial remarks from Fed Chair Jerome Powell on Friday, which will be scrutinized for any hints regarding the future trajectory of interest rates. Market sentiment, as reflected by CME’s FedWatch tool, currently prices in an almost 85% likelihood of a rate cut at the Fed’s upcoming September policy gathering. However, a more hawkish tone from Powell at the Jackson Hole symposium could further pressure tech stocks, as sustained elevated interest rates typically pose a headwind for the sector.
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