 "US stock market: New trade tensions, tech shares sell-off drag Wall Street lower")
Wall Street’s major indices declined on Thursday (July 18) as a rebound in tech shares faltered, exacerbating losses driven by concerns over renewed trade tensions.
The Dow Jones Industrial Average, which had set records for three consecutive days, fell 533 points, or 1.3 per cent, from its all-time high set the previous day. The Nasdaq Composite dropped 0.7 per cent, losing 125.7 points to close at 17,871.22. The S&P 500 slid 0.8 per cent, shedding 43.68 points to finish at 5,544.59, extending its retreat from the peak reached on Tuesday, July 16.
Thursday’s losses were broad-based, unlike the preceding week, with declines hitting various sectors of the market. Smaller-cap stocks, which had recently been outperforming after lagging behind their larger counterparts, fell more sharply.
Market movers
Domino’s Pizza experienced the steepest decline, plunging 13.6 per cent despite surpassing analysts’ profit expectations for the spring quarter.
Chip stocks showed some stabilisation after plummeting the previous day due to concerns over escalating trade tensions with China. Nvidia saw a 2.9 per cent rise after fluctuating throughout the session, boosting its year-to-date gain to nearly 145 per cent.
D.R. Horton, the homebuilder, surged 10.1 per cent, marking the largest gain in the S&P 500, following a better-than-expected earnings report for the spring quarter.
In a shift observed over the past week, investors have been moving away from Big Tech, which some critics argue is overvalued, and toward smaller stocks and companies with profits closely tied to the economy’s performance.
Impact Shorts
More ShortsDrops of 2 per cent for Apple, 2.2 per cent for Amazon, and 0.7 per cent for Microsoft were among the most significant drags on the S&P 500.
Bond market dynamics
In the bond market, Treasury yields rose following mixed economic data.
A report indicated that more workers filed for unemployment benefits last week than economists had anticipated, potentially signaling a softening job market, though the figures remain low historically.
Conversely, another report revealed that manufacturing activity in the mid-Atlantic region is expanding more robustly than expected.
The yield on the 10-year Treasury increased to 4.19 per cent from 4.16 per cent late Wednesday (July 17).
Wall Street is hoping the economy can maintain a “Goldilocks” condition—not so hot as to drive inflation higher, but not so cold as to slide into a recession.
With inputs from agencies
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