On Thursday, US stocks declined as investors continued to reduce positions in high-flying technology stocks and took profits from recent gains in other sectors.
The Dow Jones Industrial Average fell 533.06 points, or 1.29 per cent, to close at 40,665.02. The S&P 500 decreased by 0.78 per cent to finish at 5,544.59, while the tech-heavy Nasdaq Composite dropped 0.70 per cent, closing at 17,871.22.
This trend of selling megacap tech stocks has been observed in recent days, driven by growing optimism for a potential interest rate cut from the Federal Reserve in September. The expectation of lower borrowing costs has bolstered small caps and cyclical stocks, although these also declined after notable gains.
The shift away from technology stocks became pronounced on Wednesday, when the Nasdaq experienced its worst daily performance since December 2022. It was also the first session since 2001 where the Nasdaq posted a loss exceeding 2.5 per cent, while the Dow recorded a gain.
The Russell 2000, which has benefited from expectations of interest rate cuts, also fell about 1.9 per cent.
Despite Thursday's losses, the Russell 2000 has risen 3.5 per cent over the last five trading days. In contrast, the Nasdaq has slipped about 2.3 per cent during the same period, highlighting the trend of traders moving away from tech stocks.
As of Thursday, the Dow was the only major index showing week-to-date gains, with an advance of over 1 per cent. The Russell 2000 also rose more than 2 per cent for the week. The S&P 500 has declined more than 1 per cent since the start of the week, while the Nasdaq Composite has fallen almost 3 per cent due to the tech sell-off.
In terms of sectors, all except Energy, which closed 0.33 per cent higher, ended in the red. The Health sector was the worst performer, closing over 2 per cent lower.
Futures
The SPI futures are pointing to a 1.09 per cent fall.
Currency
One Australian dollar at 7.20am was buying 67.08 US cents.
Commodities
Gold has lost 0.14 per cent. Silver has lost 0.5 per cent. Copper has dropped 2.93 per cent. Oil has lost 0.04 per cent.
Figures around the globe
European markets closed mixed. London’s FTSE added 0.21 per cent, Frankfurt lost 0.45 per cent, and Paris closed 0.21 per cent higher.
Turning to Asian markets, Tokyo’s Nikkei lost 2.36 per cent, Hong Kong’s Hang Seng added 0.22 per cent, while China’s Shanghai Composite closed 0.48 per cent higher.
Yesterday, the Australian share market closed 0.27 per cent lower at 8036.52.
Ex-dividends
One company is going ex-dividend today. Plato Income Maximiser (ASX:PL8) is paying 0.55 cents fully franked.
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.
