Wall Street experienced a downturn after initially rallying in the morning, but the losses were not as severe as the recent volatile market movements seen worldwide. The S&P 500 dropped by 0.8% on Wednesday, while the Dow Jones Industrial Average fell by 0.6% and the Nasdaq composite by 1%. Stocks declined as Nvidia, a key player on Wall Street, went from a morning gain to a 5.1% loss, becoming the biggest drag on the S&P 500. Concerns over inflated prices of Nvidia and other Big Tech stocks in the artificial-intelligence technology sector have been impacting their performance.
This breaking news update follows AP’s previous story.
U.S. stocks were relatively subdued on Wednesday as a morning rally gave way to modest declines. The S&P 500 was 0.4% lower after an initial 1.7% gain vanished. The Dow Jones Industrial Average dropped by 179 points, or 0.5%, by 2:30 p.m. Eastern time, while the Nasdaq composite was down by 0.6%.
Market movements were influenced by Nvidia, which transitioned from a 4.4% gain in the morning to a 3.8% loss, making it the heaviest weight on the index. The struggles of Nvidia and other Big Tech stocks in recent weeks sparked concerns about overvalued prices amid the hype around artificial-intelligence technology.
Super Micro Computer’s profit report further dampened excitement surrounding AI, with the company’s stock plummeting by 19.4% despite a 143% revenue increase in the latest quarter. The overall movements in U.S. stock indexes appeared subdued compared to the global market turmoil of the past week, with the S&P 500 rebounding from a 1% rally following a three-day losing streak.
Various factors contributed to the recent market volatility, including developments in Japan that have started to stabilize. The Bank of Japan’s slight interest rate hike last week triggered aftershocks globally, impacting popular trading strategies like the “carry” trade.
The Japanese central bank’s approach to the market turmoil and its belief in a soft landing for the U.S. economy helped alleviate concerns, but risks still remain, especially with regards to unwinding the carry trade. Continued monitoring of the Japanese yen value and the two-year Treasury yield is crucial to gauge market stability and investor sentiment.
As Wall Street prepares for potential Federal Reserve interest rate cuts, corporate earnings reports, including those from the S&P 500 companies, are showing strong growth. While some companies like Walt Disney Co. and Airbnb experienced stock drops due to varying factors, others like Apple saw positive trends.
Stock markets in Europe and Asia saw positive gains, showcasing a mixed global market sentiment amid ongoing economic and geopolitical uncertainties.
Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
