empty
08.08.2024 10:39 AM
Nasdaq in the red: weak bond auction, tech companies fall

This image is no longer relevant

Tech sector under pressure

The U.S. stock market closed lower on Wednesday, with the Nasdaq index losing 1%. The main reason was a decline in tech stocks, exacerbated by weak interest in the 10-year Treasury auction, which caused investor jitters amid volatile trading.

Morning gains turn to losses

Trading started on a positive note with tech giants rising, but both indexes began to lose ground as the day progressed. Investors, still jittery from the recent global sell-off in equities, added to the sell-off after a weak Treasury auction sent the market lower.

Red Zone: All Indexes Die

All three major indexes ended the day in the red, with losses widening just before the close. The tech-heavy S&P 500 (.SPLRCT) fell 1.4%, becoming the biggest drag on the benchmark index.

Recession Worries

Investors are worried about a possible U.S. recession, as well as weaker forecasts from major U.S. companies. These factors are weighing on the market.

Day's Results: Big Losses

The Dow Jones Industrial Average (.DJI) fell 234.21 points, or 0.6%, to 38,763.45. The S&P 500 (.SPX) lost 40.53 points, or 0.77%, to 5,199.5. The Nasdaq Composite (.IXIC) fell 171.05 points, or 1.05%, to 16,195.81.

Expert Opinions

Lindsey Bell, chief strategist at 248 Ventures in Charlotte, North Carolina, said investors may also have been taking profits after stocks rebounded Tuesday.

Big Losses

The Nasdaq and S&P 500 each lost at least 3% on Monday, underscoring the volatility of the current market environment.

Impact of Comments from Japan

Stocks received some support Wednesday after Bank of Japan (BOJ) Deputy Governor Shinichi Uchida said the central bank has no plans to raise rates amid volatile financial markets.

Nikkei surges after decline

Japanese stocks rose on the news. The Nikkei (.N225) rose 1%, extending a 10% rebound that began on Tuesday after a sharp decline on Monday. The Nikkei's sudden 12.4% decline triggered a global decline in equities as investors turned away from risky assets.

Japan rate hike fallout

The Bank of Japan's surprise rate hike on July 31 to a level not seen in 15 years triggered a sell-off in global markets. Investors began unloading their yen positions in a carry trade, sending the low-yielding Japanese currency, which is typically used to buy high-yielding assets, sharply higher.

Disappointing Corporate Results

Walt Disney Shares Slide

Walt Disney (DIS.N) shares fell 4.5% after the company warned of "moderate demand" for its theme parks in coming quarters.

Super Micro Computer Slide

Super Micro Computer (SMCI.O) shares tumbled 20.1% after the company reported lower-than-expected quarterly adjusted gross profit. Rival Dell Technologies (DELL.N) also fell 4.9%.

Market Expectations

Federal Reserve Eyes

Investors are eagerly awaiting further comments on monetary policy from the Federal Reserve, with particular attention focused on an event in Jackson Hole, Wyoming, where Fed Chairman Jerome Powell is scheduled to speak.

Trading Activity

Trading volume on U.S. exchanges on Wednesday was 12.93 billion shares, slightly above the 20-day average of 12.63 billion shares.

Declining Stocks Prevail

Declining stocks outnumbered advancing stocks on the New York Stock Exchange (NYSE) by 1.48 to 1. On the Nasdaq, the ratio was even more pronounced, with decliners outnumbering advancing stocks by 2.08 to 1.

Highs and Lows: Market Trends

S&P 500 and Nasdaq Performance

The S&P 500 posted 16 new 52-week highs and 9 new lows. The Nasdaq Composite posted 34 new highs and 195 new lows, putting the tech sector under significant pressure.

External Factors

Oil Price Rise

Oil prices rose on a bigger-than-expected draw in U.S. crude inventories and a possible escalation in the Middle East. However, investors continue to voice concerns about weak demand in China.

S&P 500 Volatility

Daily Performance

After a morning rally on Wednesday, the S&P 500 began to lose ground around midday and then fell further after the 10-year U.S. Treasury auction.

Profit Taking

Bell also noted that some investors are using short-term stock gains to take profits, adding to the volatility in the market.

MSCI falls, STOXX 600 rises

The MSCI World Share Index (.MIWD00000PUS) fell 0.35 points, or 0.05%, to 770.64, after hitting a session high of 783.83. Meanwhile, Europe's STOXX 600 (.STOXX) ended the day up 1.5%, reflecting positive momentum in European markets.

FX Markets: BoJ Statements React

Yen Falls

The Japanese yen weakened after the Bank of Japan's rate hike announcements, somewhat reassuring investors worried about the volatility of the Japanese currency. The yen strengthened sharply against the dollar on Monday amid concerns about a possible U.S. recession, sending markets falling broadly.

Strengthening dollar

The US dollar strengthened 1.75% against the yen, reaching 146.83. The dollar index, which tracks the greenback against a basket of currencies including the yen and the euro, rose 0.2% to 103.19. The euro, meanwhile, fell 0.08% to $1.0921.

Bond yields: An analysis of supply and demand

US Treasury yields rise

US Treasury yields rose after weak demand at a $42 billion auction of 10-year notes. Companies rushed to place their debt amid growing risk appetite. Traders are closely monitoring supply and awaiting more economic data to assess the health of the US economy.

Specifics

The 10-year Treasury yield rose 7 basis points to 3.958%, up from 3.888% late Tuesday. The 30-year yield also rose, adding 8.1 basis points to 4.2579%.

These moves highlight the current market sentiment, with investors seeking to balance risk and return amid economic uncertainty.

Two-Year Yields Decline

The two-year Treasury yield, which closely tracks interest rate expectations, fell 0.2 basis points to 3.9827%, down from 3.985% late Tuesday. The move reflects a slight softening in investor expectations for future Federal Reserve action.

Energy Markets: Oil Prices Rising

Oil Prices Strengthening

Energy markets are seeing a significant rise in oil prices. US crude oil rose 2.77% to $75.23 per barrel. Brent crude prices also rose, rising 2.42% to $78.33 per barrel. These changes come amid concerns about depleting reserves and a possible escalation of conflicts in the Middle East.

Precious Metals Market: Gold Prices Fall

Gold Price Decline

Precious metal prices declined. Spot gold lost 0.2% to $2,384.59 per ounce. US gold futures also fell, falling 0.05% to $2,387.80 per ounce. These changes may be related to fluctuations in currency markets and changing investor sentiment.

Results and Prospects

Markets continue to show volatility in response to changes in economic indicators and geopolitical risks. Investors are closely monitoring developments, trying to adapt their strategies to the new conditions. Interest rate expectations and rising oil prices play key roles in shaping market sentiment.

Thomas Frank,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

One Year, 19% Growth: How Trump Is Rewriting the Rules for Global Markets

Financial markets greeted Donald Trump's second inauguration with mixed emotions. On the one hand, shareholders were enthusiastic about the pro-business agenda he was pushing. On the other hand, the currency

Thomas Frank 07:56 2025-01-21 UTC+2

Trump. Season 2: Intrigue, rates and a cryptocurrency with his own name

The dollar continued to show resilience on Monday, while Asian stock markets expressed cautious optimism. Investors were tensely awaiting Donald Trump's first steps in his second term, and speculated that

Thomas Frank 07:40 2025-01-20 UTC+2

Markets under pressure: What do China GDP numbers and US unemployment mean?

Morgan Stanley rises after higher fourth-quarter profit UnitedHealth falls as no quarterly sales estimates are released Investors analyze retail sales, unemployment data Indices fall: Dow 0.16%, S&P 0.21%, Nasdaq 0.89%

Thomas Frank 09:31 2025-01-17 UTC+2

Earnings Season and Global Rates: Asia Rejoices, Dollar Loses

Asian Stocks Rise, Fueled by Tech Yen Rises to One-Month High on Rising Rate Hike Bets Dollar Weakens as Cool U.S. Inflation Rekindles Rate Cut Hopes U.S. Earnings Open with

Thomas Frank 10:39 2025-01-16 UTC+2

Why the Dow and S&P 500 are growing, while the Nasdaq is stalling: detail analytics

US producer prices rose moderately in December Boeing fell after a report of low aircraft deliveries in 2024 Eli Lilly fell after a weak forecast for sales of a weight-loss

Thomas Frank 07:45 2025-01-15 UTC+2

Why Tighter AI Chip Regulation Is Spooking the Market, While Insurance Companies Are Cheering Investors

Moderna Slips After Cutting 2025 Sales Forecast Chip Stocks Fall as U.S. Tightens Controls on AI Chip Flows Health Insurers Rise as U.S. Proposes 2026 Payout Rates Indices

Thomas Frank 10:57 2025-01-14 UTC+2

Walgreens on the Rise: Best Day Since 1980 as Other Giants Sink

US Jobs Growth Beats Expectations in December S&P 500 Futures Fall Ahead of US CPI, Earnings Walgreens Set for Best Day Since 1980 After Beating First-Quarter Profit Constellation Brands Slips

Thomas Frank 06:28 2025-01-13 UTC+2

Nikkei and U.S. Futures Sink Quietly: Where to Look for Resilience

U.S. Stock Futures Fall After the Close Nikkei Down 0.9%, Chinese Bond Yields Rise U.S. Payrolls Data Crucial for Bond Market Dollar Surges Near 2-Year Highs, Rising for 6th Week

Thomas Frank 10:18 2025-01-10 UTC+2

Fed signals price risk: Should we expect a new round of inflation?

US private sector job growth slows in December - ADP Fed meeting minutes show growing risk of price pressure Quantum computing stocks fall as Nvidia CEO sees long road ahead

Thomas Frank 07:20 2025-01-09 UTC+2

What lies in store for JPY in 2025?

The yen has once again emerged as one of the worst-performing currencies in the G10 by the end of the year. Since January, its exchange rate against the US dollar

Аlena Ivannitskaya 07:44 2024-12-30 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.