Wall Street got cold feet Thursday ahead of a key speech from Federal Reserve Chairman Jerome Powell, with major indexes registering their worst days in weeks.
Slow your roll: The S&P 500 came within 0.5% of its all-time high Thursday morning before turning ... [+]
The blue chip Dow Jones Industrial Average fell 0.4%, or 164 points, the benchmark S&P 500 declined 0.9% and the tech-heavy Nasdaq Composite lost 1.7%.
It’s the S&P and Nasdaq’s steepest daily losses since Aug. 5, when each index tanked 3% or more in their worst respective days since 2022, while Thursday was the Dow’s worst day since Aug. 7.
Among the biggest losers Thursday were sectors more sensitive to higher rates, with the S&P’s information technology and consumer discretionary sectors each declining about 2%.
Stocks like Intel and Tesla, whose shares both fell 6%, and Nvidia, whose shares dropped 4%, came in as among the most notable individual fallers.
Bond yields rose Thursday as investors fled to safety, as 2-year and 10-year U.S. Treasury note yields rose about 9 basis points apiece.
There was no singular catalyst for the declines—it rather was a result of traders pivoting away from riskier equities ahead of Powell’s Friday appearance at Jackson Hole, Wyoming, delivering a speech which could reveal a less dovish Fed than now expected by investors, who are looking for much lower interest rates to bump corporate profit margins and thus stock valuations. Thursday’s losses came after stocks opened higher as indexes tested all-time highs set last month, with the S&P coming within just 0.5% of its record shortly after market open.
There’s little evidence to suggest Thursday’s negative price action was more than a pullback that commonly occurs as indexes near record highs, as stocks’ recovery from their earlier August doldrums remain strong, with the S&P up almost 9% from its Aug. 5 low. Thursday was also the S&P’s second-slowest day by trading volume of 2024, according to Yahoo Finance data, indicating there was likely more price sensitivity amid the dog days of summer. “You’ve got a very thinly traded market that is, today, looking ahead with some trepidation to Labor Day,” Sanders Morris chairman George Ball told CNBC.