News
S&P500 falls as investors turn away from tech stocks
The S&P 500 and Nasdaq Composite fell on Wednesday as investors shifted away from high-flying technology stocks into more rate-sensitive sectors. The broad-based S&P 500 fell 1.39 percent to close at 5,588.27, while the tech-heavy Nasdaq fell 2.77 percent to close at 17,996.92, marking its worst session since December 2022 and its first close below 18,000 since July 1. In contrast, the Dow Jones Industrial Average gained 243.60 points, or 0.59 percent, to close at 41,198.08, notching its first close above 41,000.
A roughly 4.5 percent rise in UnitedHealth, driven by a Wall Street upgrade after strong earnings, helped lift the 30-stock index. That builds on Tuesday’s more than 700-point rally, the blue-chip index’s best day in more than a year. Meanwhile, the S&P 500 and Nasdaq have been weighed down by a continued decline in megacap technology stocks, a turnaround from their significant gains earlier this year fueled by the artificial intelligence boom.
Notably, Wednesday’s session was the first since 2001 that the Nasdaq posted a loss of more than 2.5 percent, while the Dow posted a gain. Within the S&P 500, the information technology and communication services sectors were the worst performers. Meta Platforms fell 5.7 percent, while Netflix and Microsoft each fell more than 1 percent, and Apple fell 2.5 percent.
Semiconductor stocks also struggled after a Bloomberg News report that the Biden administration may impose tighter trade restrictions if companies continue to provide China with access to U.S.-made technology. The VanEck Semiconductor ETF (SMH) fell more than 7%, its worst day since March 2020, with U.S.-listed shares of Nvidia and Taiwan Semiconductor falling more than 6% and nearly 8%, respectively.
The Russell 2000 fell 1%, ending a five-day winning streak, although it has risen more than 9% in the past five trading days as the market rally has broadened. In contrast, the Nasdaq has lost more than 3% during the same period amid the tech selloff. The rotation reflects traders’ growing optimism about interest rate cuts, which should benefit small caps and companies with higher funding costs. According to the CME FedWatch tool, trading in Fed funds futures suggests a high probability that the Federal Reserve will cut rates in September.
Futures
SPI futures point to a drop of 0.54%.
Coin
One Australian dollar at 7:30 am was trading at 67.28 US cents.
Products
Gold lost 0.42 percent. Silver lost 3.44 percent. Copper fell 0.92 percent. Oil gained 2.59 percent.
Figures around the globe
European markets closed mixed. London’s FTSE rose 0.28 percent, Frankfurt lost 0.44 percent and Paris closed 0.12 percent lower.
In Asian markets, Tokyo’s Nikkei lost 0.43%, Hong Kong’s Hang Seng rose 0.06%, while China’s Shanghai Composite closed 0.45% lower.
Yesterday, the Australian stock market closed 0.73% higher at 8,057.89.
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bolsa Data, Trading Economics, CoinMarketCap, Marketech.
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