Stock Market Volatility: Nvidia Leads Tech Rebound After August Slump

Stocks rebound from early morning slump a day after Wall Street's worst performance in a month

Stocks are up on Wall Street, following an early morning slump a day after the market's worst performance in a month. The S&P 500 is up 0.3%, or 17 points, as of 10:58 a.m. Eastern time on Wednesday, following a 2.1% drop a day earlier. The Dow Jones Industrial Average is up 186 points, or 0.5%, while the tech-heavy Nasdaq composite is up 0.4%. World stocks tumbled Wednesday after Wall Street had its worst day since early August, with the S&P 500's heaviest weight Nvidia falling 9.5% in early morning trading, leading to a global decline in chip-related stocks. Investors concerned about the strength of the U.S. economy will be closely watching the latest update on job openings from the Labor Department. "Investors' concerns about the health of the U.S. economy have intensified again, contributing to a selloff in global equity markets," Shivaan Tandon, markets economist at Capital Economics said in an analysis Wednesday. "Tech stocks appear to have been hit the hardest," he added. Nvidia stock has been struggling even after the AI chip company topped high expectations for its latest profit report. The subdued performance could bolster criticism that Nvidia and other Big Tech stocks were simply overrated, soaring too high amid Wall Street's frenzy around artificial intelligence technology. Rising oil supply was also driving down prices, as Libya moved closer to resolving a conflict over control of the country's oil revenue that meant its oil production may soon increase. Benchmark U.S. crude fell 57 cents to $69.77 a barrel. Brent crude, the international standard, lost 75 cents to $73.00 a barrel. The S&P 500 sank 2.1% to give back a chunk of the gains from a three-week winning streak that had carried it to the cusp of its all-time high. The Dow Jones Industrial Average dropped 626 points, or 1.5%, from its own record set on Friday before Monday's Labor Day holiday. The Nasdaq composite fell 3.3% as Nvidia and other Big Tech stocks led the way lower. Treasury yields also stumbled in the bond market after a report showed American manufacturing shrank again in August, sputtering under the weight of high interest rates. Manufacturing has been contracting for most of the past two years, and its performance for August was worse than economists expected. "Demand remains subdued, as companies show an unwillingness to invest in capital and inventory due to current federal monetary policy and election uncertainty," said Timothy Fiore, chair of the Institute for Supply Management's manufacturing business survey committee. Other reports due later in the week could show how much help the economy needs, including updates on the number of job openings U.S. employers were advertising at the end of July and how much United States services businesses grew In August. Wall Street analysts expect solid August job numbers when DOL releases its monthly employment data on Friday, which they say should allay the renewed fears about a hard landing. "We forecast nonfarm payrolls to rise by a solid 200k in August," said Bank of America U.S. economists Shruti Mishra and Aditya Bhave in a note. "The labor market is moderating but gradually." That said, analysts have not ruled out continued volatility, a hallmark of the month of September. "September has historically been a poor month for returns, suggesting some seasonality may be playing a role in negative sentiment," Solita Marcelli, chief investment officer americas at UBS Global Wealth Management, said in a research note. "The S&P 500 has declined in September in each of the last four years and seven of the last 10." All told, the S&P 500 fell 119.47 points to 5,528.93 on Tuesday. The Dow dropped 626.15 to 40,936.93, and the Nasdaq composite sank 577.33 to 17,136.30. In the bond market, the yield on the 10-year Treasury fell to 3.84% from 3.91% late Friday. That's down from 4.70% in late April, a significant move for the bond market.

Wall Street slumps, putting stocks on track for their worst day in nearly a month

U.S. stocks are slumping Tuesday following a disappointingly weak start to a week full of updates on the economy. The S&P 500 was 1.9%, or 108 points, lower in afternoon trading and on track for its worst day in nearly a month, coming off a winning week that had carried it to the cusp of its all-time high. The Dow Jones Industrial Average was down 560 points, or 1.4%, from its own record set on Friday before Monday's Labor Day holiday. The Nasdaq composite was 3.1% lower, as of 2:45 a.m. Eastern time. Treasury yields were also sinking in the bond market after a report showed U.S. manufacturing shrank again in August, as it continues to wilt under the weight of high interest rates. Manufacturing has been contracting for most of the past two years, and its performance for August was worse than economists expected. "Demand remains subdued, as companies show an unwillingness to invest in capital and inventory due to current federal monetary policy and election uncertainty," said Timothy Fiore, chair of the Institute for Supply Management's manufacturing business survey committee. Worries about a slowing U.S. economy helped send stocks on a scary summertime swoon early last month, but financial markets later rebounded on hopes that the Federal Reserve could pull off a perfect landing for the economy. After jacking its main interest rate to a two-decade high to beat high inflation, the Fed looks set to ease interest rates later this month in hopes of easing conditions for the economy and avoiding a recession. As analysts at UBS point out, volatility is typical in the month of September, a time when "investors will parse a range of data releases to gauge the state of the U.S. economy - especially Friday's jobs data - ahead of a widely expected interest rate cut by the Fed." Still analysts at UBS are keeping a positive outlook and advise investors to do the same. "We recommend investors keep a long-term perspective with regard to their financial goals and focus on quality companies in their equity holdings. Investors should also ensure their portfolios are well diversified across asset classes, regions, and sectors, including allocations to alternatives and hedges such as gold. Structured strategies offer another way to manage potential volatility ahead," Solita Marcelli, chief investment officer Americas at UBS Global Wealth Management said in a note. Other reports later this week that could show how much help the economy needs, including updates on the number of job openings U.S. employers were advertising at the end of July and how strong U.S. services businesses grew last month. The week's highlight will likely arrive on Friday, when a report will show how many jobs U.S. employers created during August. The jobs report has once again become the main event for the stock market each month, taking over from updates on inflation, according to analysts at Bank of America. Many traders are anticipating the Fed will deliver a full percentage point of cuts to interest rates this year, which is a "recession-sized" amount, Gonzalo Asis and other economists and strategists wrote in a BofA Global Research report. On Wall Street, U.S. Steel fell 5.3% in its first trading after Vice President Kamala Harris said Monday she opposes the company's planned sale to Japan's Nippon Steel. The Democratic presidential nominee's comments, which echo President Joe Biden's position, came after Nippon Steel Corp. said last week it would spend an additional $1.3 billion to upgrade facilities in Pennsylvania and Indiana, on top of a previous $1.4 billion commitment. Nippon Steel also reiterated that it expects the transaction to close by the end of this year, despite ongoing political and labor opposition. Nvidia was the heaviest weight by far on the S&P 500 after falling 7.2%. Its stock has been struggling even after the chip company topped high expectations for its latest profit report. The subdued performance could bolster criticism that Nvidia's and other Big Tech stocks simply soared too high amid Wall Street's rush into artificial-intelligence technology. Stocks of oil and gas companies also helped drag the market lower after the price of crude oil fell roughly 4% on worries about how much fuel the global economy will burn. A barrel of benchmark U.S. oil is almost back to $70 and down for the year so far after climbing above $85 in April. Exxon Mobil lost 2.3%, and ConocoPhillips dropped 3%. Still, it wasn't a complete washout on Wall Street. More than 1 in 3 stocks within the S&P 500 was climbing, led by those that tend to benefit the most from lower interest rates. That includes dividend-paying stocks, as well as companies whose profits are less closely tied to the ebbs and flows of the economy, such as utilities and makers of consumer staples. In the bond market, the yield on the 10-year Treasury fell to 3.85% from 3.91% late Friday. That's down from 4.70% in late April, a significant move for the bond market.

Stock markets have worst fall since August meltdown as Dow drops 600

U.S. stocks tumbled Tuesday to their worst day since an early August sell-off, as a week full of updates on the economy got off to a discouragingly weak start. The S&P 500 sank 2.1% to give back a chunk of the gains from a three-week winning streak that had carried it to the cusp of its all-time high. The Dow Jones Industrial Average dropped 626 points, or 1.5%, from its own record set on Friday before Monday's Labor Day holiday. The Nasdaq composite fell 3.3% as Nvidia and other Big Tech stocks led the way lower. Treasury yields also stumbled in the bond market after a report showed U.S. manufacturing shrank again in August, sputtering under the weight of high interest rates. Manufacturing has been contracting for most of the past two years, and its performance for August was worse than economists expected. "Demand remains subdued, as companies show an unwillingness to invest in capital and inventory due to current federal monetary policy and election uncertainty," said Timothy Fiore, chair of the Institute for Supply Management's manufacturing business survey committee. Stocks of oil and gas companies were some of the market's biggest losers after the price of crude oil fell roughly 4% on concerns about how much fuel a fragile global economy will burn. A barrel of benchmark U.S. oil is almost back to $70 and down for the year after climbing above $85 in April. Exxon Mobil lost 2.1%, and ConocoPhillips dropped 3.5%. Similar worries about a slowing U.S. economy and a possible recession had helped send stocks on a scary summertime swoon in early August. It briefly knocked the S&P 500 nearly 10% below its record set in July, but financial markets quickly rebounded on hopes that the Federal Reserve could pull off a perfect landing for the economy. The Fed appears set to lower interest rates later this month in hopes of easing conditions for the economy and avoiding a recession after earlier jacking its main interest rate to a two-decade high to beat high inflation. Other reports due later this week could show how much help the economy needs, including updates on the number of job openings U.S. employers were advertising at the end of July and how strong U.S. services businesses grew last month. The week's highlight will likely arrive on Friday, when a report will show how many jobs U.S. employers created during August. The jobs report has once again become the main event for the stock market each month, taking over from updates on inflation, according to analysts at Bank of America. Many traders are anticipating the Fed will deliver a full percentage point of cuts to interest rates this year, which is a "recession-sized" amount, Gonzalo Asis and other economists and strategists wrote in a BofA Global Research report. The strength of this jobs report, or lack thereof, will likely determine the size of the Fed's upcoming cut, according to Goldman Sachs economist David Mericle. If Friday's data shows an improvement in hiring over July's disappointing report, it could keep the Fed on course for a traditional-sized move of a quarter of a percentage point. But if Friday's report is weaker, it could drive the Fed to deliver an outsized cut of half a percentage point from the federal funds rate's current range of 5.25% to 5.50%, Mericle said. While cuts to rates are generally boons to investment prices, a recession could more than wipe out that benefit by dragging down corporate profits. On Wall Street, U.S. Steel fell 6.1% in its first trading after Vice President Kamala Harris said Monday that she opposed the company's planned sale to Japan's Nippon Steel. The Democratic presidential nominee's comments, which echo President Joe Biden's position, came after Nippon Steel Corp. said last week it would spend an additional $1.3 billion to upgrade facilities in Pennsylvania and Indiana, on top of a previous $1.4 billion commitment. Nippon Steel also reiterated that it expects the transaction to close by the end of this year, despite ongoing political and labor opposition. Nvidia was the heaviest weight by far on the S&P 500 after falling 9.5%. Its stock has been struggling even after the chip company topped high expectations for its latest profit report. The subdued performance could bolster criticism that Nvidia and other Big Tech stocks simply soared too high in Wall Street's frenzy around artificial-intelligence technology. All of the stocks that have come to be known as the "Magnificent Seven," which accounted for the vast majority of the S&P 500's return last year and early this year, fell at least 1.3%. Still, it wasn't a complete washout on Wall Street. Nearly 30% of the stocks within the S&P 500 climbed, led by those that tend to benefit the most from lower interest rates. That includes dividend-paying stocks, as well as companies whose profits are less closely tied to the ebbs and flows of the economy, such as real-estate stocks and makers of everyday staples for consumers. All told, the S&P 500 fell 119.47 points to 5,528.93. The Dow dropped 626.15 to 40,936.93, and the Nasdaq composite sank 577.33 to 17,136.30. In the bond market, the yield on the 10-year Treasury fell to 3.84% from 3.91% late Friday. That's down from 4.70% in late April, a significant move for the bond market. In stock markets abroad, indexes were lower across much of Europe and Asia. Worries were also growing about the resilience of China's economy, as recently disclosed data showed a mixed picture. Weak earnings reports from Chinese companies, including property developer and investor New World Development Co., added to the pessimism.