Nervous on Wall Street – The decline accelerates for tech stocks

Nervous on Wall Street – The decline accelerates for tech stocks

Ahead of the stock market open, investor sentiment indicated that it would be a nervous day in the US stock market. When the Nasdaq and New York Stock Exchanges opened, the three indices fell by about 0.3 percent.

In the first hour of trading there was more news that investors were waiting for from this week’s economic calendar:

  • In the US, headline PMI figures (at 3.45pm) and ISM figures (at 4pm) for the services sector were released, both for August.
  • The Fed’s “Beige Book”, which publishes surveys of how different parts of the US economy are performing, will be released at 8pm tonight.

Headline numbers that came just after stock exchanges opened showed that the headline Purchasing Manager’s Index from S&P Global ended at 50.2 in August. The headline figure was expected to be 50.4, down from 52.0 in August. The Services PMI figures ended at 50.5 in August. This is also slightly lower than the expected 51.0.

But the US Purchasing Managers’ (ISM) expectations index for the services sector reached 54.5 in August, TDN Direkt wrote. The news agency refers to Trading Economics, which reported that the index is expected to close at 52.5. These ISM numbers show that the economy is moving faster than expected.

Investors could once again interpret this to mean that the Fed has new arguments for raising interest rates this fall. This naturally means that the indicators fell further.

A few minutes after the key numbers were known, it looked like this on the stock exchanges:

  • The broad S&P 500 index fell 0.6 percent shortly after 4 p.m.
  • The Dow Jones Industrial Average, meanwhile, fell 0.2 percent.
  • The Nasdaq technology exchange was hit harder, and its main index fell by 0.9 percent.

Then the decline intensified, and tea stocks were the hardest hit. The Nasdaq index increased its decline to 1.2 percent. One of the hottest stocks of the year, Nvidia, was down more than three percent at the completion of two hours of trading today.

The new Barpenheimer effect?

Sarah Medgaard, chief economist at Handelsbanken, writes about the Fed’s report in an update on Wednesday:

– The Beige Book is expected to reflect some temporary conditions that led to higher consumption in the third quarter.

Handelsbanken Chief Economist Sarah Midtgaard.

Handelsbanken Chief Economist Sarah Midtgard. (Photo: Michaela Berg)

The Fed’s update says something about economic development in the Fed’s 12 districts, and Midtgaard also recalls that the previous report contained several funny things:

– The latest report, dated June 30, showed that hotels in Philadelphia had the highest profits since before the pandemic, due, among other things, to Taylor Swift’s concerts. Barbenheimer’s, as well as concerts of Taylor Swift and Beyoncé, can get a temporary boost on certain types of services.

– And the response from other types of industries is that they expect a cooling down in the future. “We will also look for signs of further pressure on prices or wages,” Midtgaard wrote.

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Dalila Awolowo

Dalila Awolowo

"Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff."

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