American financial backers retain a watchful attitude
Following a strong bounceback the day prior, U.S. stock markets managed to stabilize, albeit with a muted investor enthusiasm. The spotlight remains firmly on the frequently pricey tech stocks.
Anxieties about U.S. economic growth persist among investors on Wall Street. On Wednesday, the U.S. indices meandered near their previous closing figures, trading marginally above or below. The Dow Jones Industrial Average added 0.1 percent to end at 40,974 points. Meanwhile, the tech-centric Nasdaq slipped 0.3 percent to 17,084. The broad-based S&P 500 dipped 0.2 percent, finishing at 5,520.
Due to weak economic data, the indices recorded their largest daily decline since early August on Tuesday. Investors are now eagerly anticipating Friday's jobs report, which could suggest whether the Federal Reserve will commence its anticipated interest rate increase by half or a quarter percentage point. However, Michael Brown, chief research strategist at Pepperstone, expressed that the report is unlikely to alleviate persistent worries about the well-being of the U.S. job market.
This apprehension was echoed in the July jobs report from the U.S. Department of Labor, which indicated a decline in job openings (JOLTS) to a 3.5-year low of 7.673 million. Market stakeholders are debating whether the decrease is substantial enough for a substantial interest rate increase. Weak data from China's service sector also dampened sentiments. Oil prices continued their descent, with Brent crude decreasing 1.9 percent to $72.38 per barrel, following a nearly 5 percent drop on Tuesday.
Nvidia dives
The shares of AI chip pioneer Nvidia protracted their losing streak after a 10 percent tumble, ultimately closing 1.7 percent lower. Other chip stocks such as Micron, Broadcom, and Qualcomm climbed between 0.8 and 1.3 percent. The enthusiasm for AI technology growth has fuelled this year's stock surge and boosted the valuations of chip companies to levels some analysts deem inflated. Since its June 18 peak, Nvidia's stock has shed around 20 percent of its value. Concerns about the gradual write-off of substantial AI investments have intensified after the chipmaker's performance fell short of elevated expectations. "The attention is currently focused on the valuations of the U.S. stock market in general, and some tech names have accrued quite a premium," said Tai Hui of J.P. Morgan Asset Management in Hong Kong.
AMD saw a nearly 3 percent gain after recruiting a former top Nvidia executive. Keith Strier was named vice president of AMD's international AI business. Meanwhile, shares of cybersecurity company Zscaler plummeted more than 18 percent after issuing a disappointing outlook. For fiscal 2025, the company forecasted adjusted earnings per share of $2.81 to $2.87, lower than analyst projections of $3.33. Shares of Dollar Tree also plunged more than 22 percent after lowering its sales forecast. The Virginia-based discount retailer reduced its annual revenue projection to $30.6 to $30.9 billion from the previous range of $31 to $32 billion.
The Dow Jones Industrial Average showed resilience despite market uncertainties, managing to add 0.1 percent and reach 40,974 points. Investors closely watch the Dow Jones, along with other U.S. indices, for indications of the market's health and potential trends.
