Key points:

  • The Nasdaq, Dow Jones Industrial Average and S&P 500 ended lower.
  • The Nasdaq, which tracks tech companies, was the biggest loser.
  • The selloff may have peaked, but experts advise investors to remain cautious.

The US stock market showed negative dynamics following the trading session on Wednesday. The most noticeable decline was observed on the Nasdaq technology index, which lost 1% of its value. This decline was due to the weakening of tech companies’ quotes, which caused investor concern and led to increased volatility in the market.

The Dow Jones Industrial Average index fell by 234.21 points, which corresponds to a drop of 0.6%, closing at 38,763.45 points. The S&P 500 index also ended trading in the red, losing 40.53 points or 0.77% of its value and amounting to 5,199.5 points. The most significant losses were recorded on the Nasdaq Composite index, which fell by 171.05 points, which is equivalent to a drop of 1.05%, and closed at 16,195.81 points.

Despite the positive start to trading, all three major indices fell

Stock market trading opened on a positive note, with technology sector asset prices rising. However, a downward trend was observed during the trading session. The recent large-scale sell-offs in global markets have kept investors’ uncertainty high, which was exacerbated by the Treasury auction.

As a result, all three major indices ended trading in the negative zone, with the most significant decline recorded in the technology sector of the S&P 500 index, which fell by 1.4%.

Investors are expressing concern about the likelihood of a recession in the United States, as well as the publication of more pessimistic forecasts by large American companies.

Recall that on Monday, the Nasdaq and S&P 500 indices experienced a significant decline, losing at least 3% each.

Markets were buoyed early Wednesday by Bank of Japan Deputy Governor Shinichi Uchida’s statement that the central bank doesn’t plan to raise interest rates amid high volatility in financial markets. However, the positive momentum was unable to reverse the overall negative trend.

Who suffered losses?

Walt Disney shares fell 4.5% after forecasting “moderate demand” for its theme parks in the coming quarters.

Super Micro Computer shares lost 20.1% after reporting adjusted gross profit for the quarter that missed analysts’ expectations. Rival Dell Technologies also fell, losing 4.9%.

Airbnb shares fell significantly, losing nearly 14% in the session. The company attributed the decline to lower-than-expected revenue guidance for the third quarter, which it attributed to slower demand in the U.S. domestic market and shorter stays.

The decline in domestic travel within the U.S. is attributed to growing caution among American consumers about spending on tourism due to concerns about the state of the economy.

The market’s worst sell-off may be behind us

After a turbulent week in global financial markets, experts are inclined to believe that the peak of the major asset sell-off has probably passed. However, Tony Pasquariello, head of hedge fund coverage at Goldman Sachs, advises investors to remain cautious and avoid large directional bets in the current market environment.

Market participants are currently actively analyzing the situation, trying to determine whether the broad stock market collapse triggered by fears of a slowdown in the U.S. economic growth and adjustments in investment strategies related to the weakening Japanese yen is over.

“The most acute phase of the de-risking is probably behind us, but I think the trading community as a whole remains cautious and continues to sell assets,” Pasquariello said.