Wall Street Holds Steady After Tech Stock Tumble
In the aftermath of the worst day for big technology stocks since 2022, Wall Street is showing signs of stability on Thursday. The S&P 500 remained virtually unchanged in midday trading, while the Nasdaq composite was edging down by 0.2% after a 3.7% drop the previous day. The Dow Jones Industrial Average was also flat around 11:05 a.m. Eastern time.
The recent turmoil in the market was largely driven by concerns surrounding chip companies, particularly in light of possible trade tensions with China. However, there was some relief as Taiwan Semiconductor Manufacturing Co. reported stronger growth in profit for the latest quarter than analysts had anticipated.
Despite the overall uncertainty, big U.S. chip companies like Nvidia showed signs of resilience, with Nvidia rising 0.4% to recover some of its losses from the previous day. The shift in momentum on Wall Street has been evident over the past week, with investors moving away from the high-flying Big Tech stocks towards other sectors.
Stocks of smaller companies, particularly in the Russell 2000 index, have been performing well, with gains outpacing their larger counterparts. The shift in focus comes amid expectations for the Federal Reserve to begin easing interest rates in September, following a positive report on inflation last week.
The market also saw notable movements in individual stocks, with homebuilder D.R. Horton jumping 11.7% after reporting stronger-than-expected profit and revenue. On the flip side, Domino’s Pizza saw a 12.5% drop despite beating profit expectations, as the company suspended its long-term store opening forecast.
In a surprising development, Tex-Mex chain Chuy’s soared 48% after Darden Restaurants announced plans to acquire the chain in a $605 million all-cash deal. The bond market also saw some fluctuations, with Treasury yields holding steady following mixed economic data.
Overall, Wall Street is cautiously optimistic about the economy, aiming for a “Goldilocks” state where growth is balanced without tipping into inflation or recession. European markets were higher after the European Central Bank’s interest rate decision, while Asian indexes showed mixed results.
As the market continues to navigate uncertainties, investors are closely watching for further developments that could impact the trajectory of stocks in the coming days.
