Tech stocks led Wall Street lower on Wednesday, with the S&P 500 falling for the fourth consecutive day. The index dropped 0.6% to 5,022.21, marking its longest losing streak since early January. The Dow Jones Industrial Average slipped 0.1% to 37,753.31, while the Nasdaq composite sank 1.1% to 15,683.37.
The decline in tech stocks was driven by ASML, a Dutch semiconductor supplier, reporting weaker orders than expected for the start of 2024. This news caused ASML’s stock to plummet 7.1%. Nvidia and Broadcom also saw significant drops, contributing to the overall decline in the S&P 500.
Despite some positive earnings reports from companies like United Airlines, which saw a 17.4% surge in its stock price, the tech sector’s weakness overshadowed the market. The bond market also saw some relief, with Treasury yields easing as oil prices tumbled, alleviating concerns about inflation.
Investors are now adjusting their expectations for interest rate cuts by the Federal Reserve, with forecasts reduced from six or more cuts to just one or two this year. This shift in expectations puts more pressure on companies to deliver strong profits to support their stock prices.
Overall, market sentiment remains uncertain, with traders closely watching corporate news for direction. While some companies like Omnicom Group reported better-than-expected profits, others like Travelers and J.B. Hunt Transport Services fell short of forecasts, leading to declines in their stock prices.
In international markets, London’s FTSE 100 rose after U.K. inflation fell to its lowest level in two and a half years, potentially paving the way for interest rate cuts. Stock indexes in Europe and Asia were mixed, with Japan’s Nikkei 225 falling 1.3% and Shanghai stocks jumping 2.1%.
The stock of Donald Trump’s social media company also saw significant swings, rising 15.6% after two consecutive losses. Experts attribute this volatility to public sentiment around the former president rather than the company’s business prospects.
Overall, the market remains cautious as investors navigate changing expectations for interest rates and corporate earnings.
