Wall Street Ends Lower as Tech Shares Decline

All three major US stock indices ended lower on Thursday, driven down by declines in technology stocks. The tech-heavy Nasdaq was hit hardest by the retreat of prominent growth stocks, known as the “Magnificent Seven.”
The drop came amid rising Treasury yields, which were influenced by easing recession fears and the global central bank symposium in Jackson Hole. Investors are awaiting insights from Federal Reserve Chair Jerome Powell, who is expected to address the market on Friday. Powell’s speech is anticipated to provide guidance on the timing and extent of potential rate cuts, with speculation leaning towards a modest 25 basis point reduction.
Scott Ladner, Chief Investment Officer at Horizon Investments, noted the lack of a clear catalyst for the sell-off, suggesting it might be related to positioning ahead of upcoming earnings reports, such as Nvidia’s, or in anticipation of Powell’s speech.
Economic data showing increasing US jobless claims and a revision of benchmark payrolls have indicated a softening labor market, which may bolster the case for a rate cut. This sentiment was echoed by remarks from various Federal Reserve officials, who signaled that a rate-cutting phase could be imminent.
The Dow Jones Industrial Average fell 177.71 points, or 0.43%, to 40,712.78. The S&P 500 decreased by 50.21 points, or 0.89%, to 5,570.64, while the Nasdaq Composite dropped 299.63 points, or 1.67%, to 17,619.35. The CBOE Volatility Index, a gauge of investor anxiety, spiked to 17.56.
Among the S&P 500 sectors, technology suffered the largest loss, down 2.1%, while real estate stocks led the gainers. Notable stock movements included Snowflake, which saw its shares fall 14.7% despite raising its revenue forecast, and Zoom Video Communications, which rose 13.0% after increasing its annual revenue outlook. Conversely, Advance Auto Parts experienced a 17.5% drop following a profit forecast cut.
Declining issues outpaced advancing ones on both the NYSE and Nasdaq, with a 2.16-to-1 ratio on the NYSE and a 2.25-to-1 ratio on Nasdaq. The S&P 500 recorded 58 new 52-week highs and one new low, while the Nasdaq Composite saw 83 new highs and 68 new lows.
Trading volume on US exchanges was 9.79 billion shares, below the 11.89 billion average of the past 20 trading days.