By Stephen Culp
NEW YORK (Reuters) – All three major U.S. stock indexes lost ground on Thursday, weighed by technology stocks, as Treasury yields rose on waning recession fears and global central bank officials met at the Jackson Hole Economic Symposium.
The so-called Magnificent Seven mega-cap growth stocks weighed most heavily on the tech-laden Nasdaq.
“There doesn’t appear to be any clear catalyst driving this sell-off,” said Scott Ladner, chief investment officer at Horizon Investments in Charlotte, North Carolina.
“People may be looking to shift their positions a bit ahead of Nvidia (NASDAQ:) (earnings) next week, or risk a move ahead of (U.S. Federal Reserve Chairman Jerome) Powell’s Jackson Hole speech tomorrow.”
Central bank officials from around the world have gathered in Jackson Hole for the annual economic symposium. Investors will be focused on Powell’s speech on Friday for clues about the timing and magnitude of the Fed’s policy easing cycle.
Powell is expected to reassure markets that the Fed will cut rates in September, Ladner said. “He will be cautious about whether it will be a 25 or 50 basis point cut, but will probably try to guide the market towards 25.”
“He will say he expects to start slowly, but will also emphasize that if they see even more weakness in the labor market, they can speed things up,” Ladner added.
News of rising jobless claims in the US, following Wednesday’s sharply lower payroll revision, appears to confirm that the labor market is less robust than expected and is gradually softening. This eased recession fears while strengthening the case for a 25 basis point rate cut at the Fed’s upcoming policy meeting in September.
That sentiment was echoed Thursday in comments from Kansas City Fed President Frank Schmid, Boston Fed President Susan Collins and Philadelphia Fed President Patrick Harker, all of whom indicated a rate-cutting phase is coming soon.
“What Fed officials are saying is that a rate cut is certainly on the table, but there is still time between now and September and data could move things,” Martin said.
It fell 177.71 points, or 0.43%, to 40,712.78. Shares lost 50.21 points, or 0.89%, to 5,570.64 and fell 299.63 points, or 1.67%, to 17,619.35.
The , often seen as a barometer of investor fear, crossed 18, the highest intraday index in a week, before settling at 17.56.
Of the eleven major sectors of the S&P 500, technology suffered the largest percentage loss: a decline of 2.1%. Real estate stocks were the leaders.
Turning to individual stocks, Snowflake (NYSE:) increased its full-year product sales forecast. Still, shares of the data cloud analytics company fell 14.7%, with margin forecast unchanged.
Zoom video communication (NASDAQ:) rose 13.0% after raising its annual revenue forecast.
Advanced auto parts (NYSE:) plunged 17.5% after cutting its annual earnings forecast.
Declining issues outnumbered advancing issues on the NYSE by a 2.16-to-1 ratio; on the Nasdaq, a 2.25-to-1 ratio favored the decliners.
The S&P 500 recorded 58 new highs in the past 52 weeks and one new low; the Nasdaq Composite recorded 83 new highs and 68 new lows.
Volume on U.S. exchanges was 9.79 billion shares, compared to the full-session average of 11.89 billion over the past 20 trading days.
