US tech stocks struggle as S&P 500 and Nasdaq extend losses

A man in a suit stands smiling in front of a background with mountains and buildings. Text: "Peter Milios. US tech stocks struggle as S&P 500 and Nasdaq extend losses."

The S&P 500 and Nasdaq Composite extended their losses for a second consecutive session overnight, marking a sluggish start to September.

The S&P 500 slipped 0.16 per cent to close at 5,520.07, while the Nasdaq Composite declined 0.3 per cent, ending at 17,084.30. The Dow Jones Industrial Average, however, edged up by 38.04 points, or 0.09 per cent, finishing the day at 40,974.97.

Turning to US sectors, the sectors were mixed overnight. Energy was the worst performer, closing lower by 1.41 per cent. Utilities was the best performer, closing higher by 0.85 per cent.

Nvidia fell 1.7 per cent following a Bloomberg report that the US Justice Department had issued subpoenas to the chipmaker. This comes after Nvidia’s sharp 9 per cent drop on Tuesday amid a broader pullback in semiconductor stocks.

Some tech and chip stocks found their footing on Wednesday, with Advanced Micro Devices and Tesla rallying around 3 per cent and 4 per cent, respectively. Meta Platforms, Marvell Technology, Broadcom, and Qualcomm also edged higher.

US Steel shares plunged over 17 per cent on Wednesday. Reports suggest that the White House is preparing to block the company’s planned sale to Japan’s Nippon Steel. Sources told The Washington Post that President Joe Biden is expected to announce his decision to halt the $14.9 billion deal. U.S. Steel shares have already fallen 41 per cent this year.

Verizon Communications is in advanced negotiations to acquire its rival, Frontier Communications Parent Inc. This news caused Frontier’s stock price to surge by 38%, marking its biggest increase since emerging from bankruptcy in 2021. As a result, Frontier’s market value has risen to $9.3 billion.

The stock market bounced off its lows as the Treasury yield curve momentarily returned to a normal state. The curve had been inverted, with the rate on the 10-year note lower than the 2-year yield, a common recession signal that had alarmed investors. On Wednesday, the 10-year yield briefly rose to match and exceed the 2-year yield, offering a reprieve from recession concerns.

Wall Street is still digesting Tuesday’s losses, when major indexes experienced their worst day since the August 5 sell-off, with chip stocks struggling and economic data hinting at slowing U.S. growth.

Traders are bracing for more volatility in September, with many expecting a pullback of 5 per cent or more, given the historically weak performance of equities during this period.

Turning to commodities, brent crude, the global oil benchmark, dropped 5 per cent to a yearly low of $73.67 a barrel. West Texas Intermediate, the U.S. benchmark, fell 4.5 per cent to $70.25. The declines followed speculation that a deal in Libya could restore production in the region.
 
Futures

The SPI futures are pointing to a flat start.

Currency

One Australian dollar at 7.25am was buying 67.25 US cents.

Commodities

Gold has added 0.12 per cent. Silver has gained 0.75 per cent. Copper has lost 0.32 per cent. Oil has fallen 1.62 per cent.

Figures around the globe

European markets closed lower. London’s FTSE lost 0.35 per cent, Frankfurt fell 0.83 per cent, and Paris closed 0.98 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei dropped 4.24 per cent, Hong Kong’s Hang Seng fell 1.10 per cent, while China’s Shanghai Composite closed 0.67 per cent lower.

Yesterday, the Australian share market closed 1.88 per cent lower at 7950.  

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Microequities Asset Management Group Ltd (ASX:MAM)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap, Marketech.

Disclaimer

The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied upon to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.

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