- Stock sales continue - tech stocks suffer most
The selling wave on U.S. markets continued on Monday, with the previously strong tech-heavy Nasdaq index initially extending its decline. However, there was at least a temporary recovery later in the day.
Concerns about an impending U.S. recession had already overshadowed growing hopes for a September interest rate cut. A weak U.S. jobs report on Friday further fueled investors' fears that the economy could cool faster than expected.
The Dow Jones Industrial Average fell 2.58% to 38,713.93 points, putting it on track for a third consecutive day of losses. Other indices fared similarly: the broad-based S&P 500 dropped 2.87% to 5,193.29 points, while the Nasdaq 100 plummeted to 17,435 points before rebounding 600 points. The Nasdaq 100 ultimately finished down around 2.3% at about 18,000 points.
The Nasdaq 100 was particularly weighed down by the ongoing weakness of chip stocks like Nvidia. After surging in recent months on artificial intelligence (AI) hype, these stocks are now coming under significant pressure.
Investors once again sought refuge in safe-haven assets at the start of the week. Ten-year U.S. Treasury yields rose to their highest level since June 2022.
Shares of AI pioneer Nvidia fell 6.1%. A media report suggesting that the chipmaker is delaying the launch of new AI chips due to design flaws weighed on sentiment. Despite this, Nvidia's stock has still nearly doubled year-to-date. Other semiconductor stocks like Intel, Micron Technology, and Broadcom also faced significant pressure on Monday. Following disappointing quarterly results and guidance, Bank of America withdrew its previous positive recommendation for Intel.
Tesla shares fell 3.9%, while Apple shares dropped 3.3%. Over the weekend, it was revealed that Warren Buffett's investment firm Berkshire Hathaway had sold nearly half of its stake in the company in the second quarter, worth around $75.5 billion.
Shares of BioNTech, listed in New York, fell 5.4%. The German vaccine maker reported a high triple-digit million loss in the second quarter as it works towards approval for new products, such as cancer treatments. Moderna shares, the U.S. competitor, fell 4.7% in sympathy and due to a downgrade by RBC.
The ongoing decline of Bitcoin pulled Coinbase shares lower, with the crypto trading platform's stock falling 6.3%.
Against the general market weakness, Kellanova shares surged 12.3%. According to Bloomberg, the breakfast cereal maker is being courted by industry peer Mars.
The S&P 500, comprising various U.S. sectors, mirrored the market trend and decreased by 2.87% on Monday, reaching 5,193.29 points. Investors' fears of an accelerated economic slowdown following a weak jobs report continued to impact the performance of major indices.
