2024-08-08 00:09:42
The “red” closed today Wall Street with all three major stock indexes giving up early session gains as the market was unable to recoup losses from Monday’s widespread liquidation. The initial rise was led by the Japanese central bank’s dovish signal that it will not raise interest rates further with the market in turmoil.
THE Dow Jones fell 234.21 points or 0.60% to 38,763.45 points. THE S&P 500 fell 0.77% to 5,199.50 units, while Nasdaq recorded losses of 1.05% to 16,195.81 points. At the start of the session, the Dow rallied over 480.30 points and the S&P 500 rallied 1.73%. Accordingly, the Nasdaq was up more than 2% intra-sessionally.
Stocks were pressured by weak demand for the $42 billion issuance of government bonds, which underscored the markets’ vulnerability. The weaker-than-expected demand for US Treasuries signaled that the recent rally may have lost momentum. Treasuries also came under pressure as 17 blue chip companies issued $31.8 billion worth of bonds, the highest amount of investment grade debt so far this year.
The leading tech stocks also showed strong volatility: Nvidia and other big tech followed the initial rise in the main indices to change course in the afternoon. Nvidia fell 5.1 percent, while Super Micro Computer sank more than 20 percent after the server maker reported results that fell short of expectations. Tesla lost 4.4% of its value, while Meta Platforms fell 1%.
The U.S. 10-year Treasury yield continued its uptrend to 3.95%, returning to levels seen before last Friday’s weaker-than-expected jobs data that fueled worries about a slowing economy.
Wall Street’s VIX fear index traded at 28.3 today, well below Monday’s 65, signaling investor fears have eased but remain elevated from earlier in the month levels.
“There are some signs that things have calmed down in recent days. However, the path is unknown, and it remains questionable whether all carry trade positions in yen have been liquidated in combination with the uncertainty about geopolitical developments in the Middle East,” notes Charlie Ripley, strategic analyst at Allianz Investment Management.
“Equities clearly remain vulnerable. More signs will be needed to get market bulls moving again. “Many investors still don’t feel confident buying, especially ahead of July US inflation data next week,” said Fawad Razakzada of City Index and Forex.com.
Strategists at JPMorgan Chase & Co caution that despite the correction, there is little evidence that stocks have entered oversold territory, as they did in October 2023.