NEW YORK: The three major US stock indices ended down more than 1% each on Thursday (Aug 24), led by a drop in the Nasdaq after this week’s sharp gains and as investors were nervous ahead of Federal Reserve chair Jerome Powell's speech Friday.
The Dow Jones Industrial Average fell 373.56 points, or 1.08%, to 34,099.42, the S&P 500 lost 59.7 points, or 1.35%, to 4,376.31 and the Nasdaq Composite dropped 257.06 points, or 1.87%, to 13,463.97.
Shares of Nvidia ended barely higher after they hit a record high early in the session. The company late Wednesday gave a much stronger-than-expected forecast amid demand for its artificial intelligence chips and said it would buy back US$25 billion (RM116.25 billion) in stock.
All of the major S&P 500 sectors were down on the day, however, and an index of semiconductors dropped 3.4%.
Central bankers and other economic leaders gathered on Thursday for an annual symposium in Jackson Hole, Wyoming. Powell’s highly anticipated speech on the economic outlook is due Friday.
“As much as investors want to focus on Nvidia and want to focus on tech – and it’s been a good year so far – this is still a market that is Fed obsessed. This is still all about what is Jay Powell going to say tomorrow to mess things up ... that may lead investors to be sellers instead of buyers,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
The market had gained along with Nvidia this week ahead of the company's report on hopes that its forecast could extend this year’s artificial intelligence tech stock rally.
There’s “a fair bit of trepidation about what Jay Powell is trying to get across”, said Art Hogan of B. Riley Wealth Management.
Markets will be looking for clues on monetary policy based on how he characterises the progress on bringing down inflation.
Data earlier on Thursday showed claims for US unemployment benefits pointed to a still-strong jobs market, news that some say could support the Fed’s hawkish message of higher interest rates for longer. Treasury yields edged higher.
Investors also digested comments from Philadelphia Fed president Patrick Harker, who in an interview on CNBC on Thursday said the Fed will need to keep rates restrictive for a while.
The Fed has been raising rates since March 2022 in an effort to bring down inflation, and investors are looking for clarity on whether more rate increases are ahead and how long the Fed plans to hold rates high.
Among the day's decliners, Dollar Tree shares dropped 12.9% after the retailer forecast annual profit largely below estimates. – Reuters, AFP
Source: The Sun Daily
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