Nasdaq Moves Sharply Lower As Tech Stocks Slump But Dow Moves Higher
30 Julho 2024 - 5:53PM
IH Market News
After ending yesterday’s choppy trading session narrowly mixed,
the major U.S. stock indexes moved in more starkly opposite
directions during trading on Tuesday. While the tech-heavy Nasdaq
moved sharply lower, the Dow ended the day firmly positive.
The Nasdaq tumbled 222.78 points or 1.3 percent to 17,147.41,
ending the session at its lowest closing level in well over a
month. The S&P 500 also fell 27.10 points or 0.5 percent to
5,436.44, while the narrower Dow climbed 203.40 points or 0.5
percent to 40,743.33.
The steep drop by the Nasdaq came as tech stocks came under
pressure as the day progressed, with AI darling and sector leader
Nvidia (NASDAQ:NVDA) plunging by 7.0 percent to a two-month closing
low.
Microsoft (NASDAQ:MSFT) and Advanced Micro Devices (NASDAQ:AMD)
also moved to the downside ahead of the release of their quarterly
results after the close of today’s trading.
The weakness in the sector may have reflected concerns the
earnings won’t be strong enough to support further upside after
tech stocks helped lead the markets to record highs earlier this
month.
Among tech stocks, semiconductor stocks turned in some of the
worst performances, resulting in a 3.9 percent nosedive by the
Philadelphia Semiconductor Index. The index slumped to its lowest
closing level in well over two months.
Shares of Lattice Semiconductor (NASDAQ:LSCC) plummeted by 9.4
after the chipmaker reported weaker than expected second quarter
results and provided disappointing third quarter revenue
guidance.
Computer hardware are saw significant weakness on the day,
dragging the NYSE Arca Computer Hardware Index down by 2.2
percent.
On the other hand, telecom stocks showed a substantial move to
the upside, driving the NYSE Arca North American Telecom Index up
by 3.5 percent.
Network solutions provider Lumen Technologies (LUMN) helped lead
the telecom sector higher, skyrocketing by 37.6 percent.
Airline stocks also moved sharply higher on the day, with the
NYSE Arca Airline Index soaring by 2.8 percent. Shares of JetBlue
(JBLU) spiked by 12.3 percent after the airline reported an
unexpected second quarter profit on better than expected
revenues.
Meanwhile, the advance by the Dow comes despite a steep drop by
shares of Merck (MRK), with the drug giant plummeting by 9.8
percent.
The sell-off by Merck came after the company reported better
than expected second quarter results but provided disappointing
full-year earnings guidance.
Shares of Procter & Gamble (NYSE:PG) also plunged by 4.8
percent after the consumer products giant reported second quarter
earnings that beat analyst estimates but weaker than expected
revenues.
At the same time, Dow components Travelers (TRV) Goldman Sachs
(GS) and JPMorgan (JPM) posted strong gains on the day.
The mixed performance on Wall Street also came as traders looked
ahead to the Federal Reserve’s monetary policy announcement on
Wednesday.
The Fed is widely expected to leave interest rates unchanged,
but the accompanying statement could have a significant impact on
the outlook for the central bank’s next decision in September.
With Fed officials repeatedly saying they need “greater
confidence” inflation is slowing before cutting rates, recent
inflation data has led to optimism about a September rate cut.
According to CME Group’s FedWatch Tool, there is currently an
87.7 percent chance the Fed will lower rates by a quarter point in
September and an 11.9 percent chance of a half point rate cut.
Other Markets
In overseas trading, stock markets across the Asia-Pacific
region moved mostly lower on Tuesday. Hong Kong’s Hang Seng Index
tumbled by 1.4 percent and South Korea’s Kospi slumped by 1.0
percent, although Japan’s Nikkei 225 Index bucked the downtrend and
rose by 0.2 percent.
Meanwhile, the major European markets turned in a mixed
performance on the day. While the U.K.’s FTSE 100 Index dipped by
0.2 percent, the French CAC 40 Index and the German DAX Index
climbed by 0.4 percent and 0.5 percent, respectively.
In the bond market, treasuries moved higher over the course of
the session, extending a recent advance. Subsequently, the yield on
the benchmark ten-year note, which moves opposite of its price,
fell 3.5 basis points to a four-month closing low of 4.143
percent.
Looking Ahead
While the Fed’s monetary policy announcement is likely to be in
the spotlight on Wednesday, traders are also likely to keep an eye
on ADP’s report on private sector employment.
The earnings news from Microsoft and AMD may also drive trading
along with results from Boeing (NYSE:BA), DuPont (NYSE:DD) and
Kraft Heinz (HNZ), which are among the companies due to report
their results before the markets open.
SOURCE: RTTNEWS
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