On Tuesday, Wall Street witnessed notable fluctuations with technology stocks experiencing a downturn, leading to weakness in the broader market. The NASDAQ and the S&P 500 descended into negative territory, although the Dow maintained a modest gain.
Presently, the tech-centric NASDAQ has incurred a significant loss, dropping 278.05 points or 1.6% to 17,092.15. Similarly, the S&P 500 is down 45.41 points or 0.8% at 5,418.13, while the Dow Jones is up 62.88 points or 0.2% at 40,602.81.
The decline in tech stocks has intensified as the trading day progressed. Notably, Nvidia (NVDA), a leader in the AI sector, plummeted by 5.7%, marking its lowest intraday level in two months. Microsoft (MSFT) and Advanced Micro Devices (AMD) also showed significant declines in anticipation of their quarterly results, due after the close of today's trading.
The weakness in the tech sector likely stems from concerns that upcoming earnings may not suffice to sustain further growth after tech stocks previously propelled the markets to record highs earlier in the month.
Particularly underperforming among tech stocks are the semiconductor stocks, causing the Philadelphia Semiconductor Index to nosedive by 3.2%, reaching a two-month intraday low. Shares of Lattice Semiconductor (LSCC) fell by 8.2% following weaker-than-expected second-quarter results and disappointing third-quarter revenue guidance.
Computer hardware and software sectors are also facing considerable declines, pulling down the NYSE Arca Computer Hardware Index and the Dow Jones U.S. Software Index by 2.3% and 1.9%, respectively.
Conversely, airline stocks surged, with the NYSE Arca Airline Index climbing by 3.1%. JetBlue (JBLU) shares jumped by 16.0% after the airline reported an unexpected second-quarter profit driven by better-than-expected revenues.
Significant strength is also evident among telecom stocks, reflected by a 2.3% rise in the NYSE Arca North American Telecom Index. Lumen Technologies (LUMN) contributed notably to this rise, soaring by 28.5%.
Despite the Dow’s modest gain, it faced pressure from a sharp drop in Merck (MRK) shares, which fell by 8.8%. The decline followed Merck's announcement of better-than-expected second-quarter results, tempered by disappointing full-year earnings guidance.
Procter & Gamble (PG) shares also declined by 5.5%, despite the company reporting earnings that exceeded analyst estimates. The drop was attributed to weaker-than-expected revenues.
Conversely, Dow components Goldman Sachs (GS), Travelers (TRV), and United Health (UNH) recorded strong gains for the day.
Across the Asia-Pacific region, stock markets mostly trended lower on Tuesday. Hong Kong's Hang Seng Index decreased by 1.4%, and South Korea's Kospi fell by 1.0%. However, Japan's Nikkei 225 Index bucked the trend, rising by 0.2%.
The major European markets showed mixed results. The U.K.'s FTSE 100 Index dipped by 0.2%, while France's CAC 40 Index and Germany's DAX Index gained 0.4% and 0.5%, respectively.
In the bond market, treasuries advanced as traders await the Fed announcement. As a result, the yield on the benchmark ten-year note, which moves inversely to its price, decreased by 3.4 basis points to 4.142%.
