U.S. stocks witnessed a decline with the Nasdaq falling 1.05 percent amid weak demand in a 10-year Treasury auction which raised investor concerns in a volatile trading environment this week.
The S&P 500 technology index declined 1.36 percent, marking the session’s largest decline. The Dow Jones Industrial Average dipped 0.60 percent to 38,763.45 while the S&P 500 declined 0.77 percent to 5,199.50. The Nasdaq Composite Index also dropped 1.05 percent to 16,195.81.
Tech stocks dip
Investors have raised their concerns about a possible U.S. recession and weaker forecasts from some big U.S. companies, among other factors. Therefore, analysts expect U.S. stocks and global markets to remain volatile in the next eight weeks, with some selloffs following rallies.
On Monday, the Nasdaq and S&P 500 fell by at least 3 percent each. However, following the Bank of Japan‘s comments regarding not raising rates when financial markets are unstable, stocks rose in early trading on Wednesday.
The Bank of Japan’s surprise rate hike on July 31 sparked a global stock dip.
Super Micro Computer shares lost 20.14 percent after it reported quarterly adjusted gross margins below estimates. Meanwhile, Dell Technologies declined by 17.6 percent.
Nvidia also witnessed a 5.12 percent decline to $98.91 per share while Apple shares remained resilient, gaining 1.25 percent to $209.82. However, Microsoft dipped 0.30 percent to $398.43 per share.
Read: Japanese stocks rebound after biggest slip since 1987 Black Monday, Nikkei up 10.23 percent
Investors cautious
Markets now await more commentary on monetary policy from U.S. central bank officials next week for more insight into the size of the next rate cut. The volume on U.S. stock exchanges reached 12.93 billion shares, up from the 12.63 billion average for the full session over the last 20 trading days.
Investors who were previously unsure of investing in tech stocks will likely do so, benefitting from the dip. However, they are proceeding with caution. While valuations have declined, the tech sector is still trading well above its 10-year average of 20.7. Despite the dip, uneven earnings from tech giants including Alphabet and Microsoft have raised investor concerns.
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