<--- Back
Today’s Financial Markets Summary – July 18, 2024
Today’s Stock Market Activity: Winners and Losers
Stocks fell Thursday as investors continued to pare positions in high-flying technology names while taking profit on recent runs elsewhere.
The Dow Jones Industrial Average slid 544 points, or 1.3%. The S&P 500 dropped 0.6%. The technology-heavy Nasdaq Composite lost 0.5%.
Thursday brought more dumping of megacap tech plays, a pattern seen in recent days as the growing likelihood of a September interest rate cut from the Federal Reserve bolstered optimism in the broader market. On the other hand, this excitement has largely helped small caps and more cyclical names, which are seen as bigger beneficiaries of lower borrowing costs.
This shift away from tech came to a head on Wednesday, when the Nasdaq tumbled 2.8% in its worst day since December 2022. Wednesday also marked the first session since 2001 where the Nasdaq posted a loss exceeding 2.5%, while the blue-chip Dow registered a gain.
But Thursday’s sell-off appeared broader than tech alone. All but one of the 11 sectors that comprise the S&P 500 traded lower, while more than two out of every three Dow members also headed for losses. Even the small-cap focused Russell 2000, which has run up amid expectations for forthcoming interest rate cuts, dropped close to 2%.
“There’s some profit taking,” said Keith Buchanan, senior portfolio manager at Globalt Investments. “I kind of cringe a bit if the profit taking occurs five days into a trade, but that just shows us the magnitude of what we’ve seen as far as the rotation.”
Despite Thursday’s declines, the Russell 2000 has jumped 7% in the last five trading days. But the Nasdaq has slipped more than 4% in the same period, underscoring the bigger theme of traders rotating out of tech.
With Thursday’s moves, the Dow was the only of the three major indexes tracking for week-to-date gains with an advance of more than 1%. Additionally, the Russell 2000 has popped 2% on the week.
The S&P 500 has slipped around 1.2% since the start of the week, while the Nasdaq Composite has slipped almost 3% amid the tech sell-off.
“Obviously, Fed easing rates is going to be good for small businesses,” said Charlie Ripley, senior investment strategist at Allianz. Meanwhile, there’s “some prudence and profit taking with the tech trade that’s been so profitable this year.”d headwinds. Investors remain cautious amidst ongoing economic uncertainties and sector-specific challenges. (CNBC)