Dow, S&P 500, Nasdaq Fall; Tesla, Beyond Meat, Plug Power, Nvidia, More Movers; Gold Selloff Continues
A selloff in speculative parts of the stock market turned into a broad market slide on Wednesday.
The Nasdaq Composite dropped 0.9%. The S&P 500 fell 0.6%. The Dow Jones Industrial Average dropped 334 points, or 0.7%. All three indexes pared some losses from their lows of the day.
Wall Street was in risk-off mode, buying consumer staples and Treasury bonds. The yield on the 10-year Treasury note fell to its lowest level since Oct. 3, to 3.95%. The 2-year yield was down to 3.44%. Energy stocks also rallied as WTI crude oil futures perked up after a recent skid.
Mizuho’s Daniel O’Regan told Barron’s that stocks that benefited from artificial intelligence enthusiasm were getting hit as the debate raged on between bears and bulls. He notes bears are worried about return on investment, while bulls argue AI is still in the early innings.
“Regardless, given the move a lot of these names have had, we are seeing profit taking across anything high beta: Meme stocks, Quantum, Crypto levered and even some AI themes,” O’Regan says.
There was relatively low volume earlier in the afternoon despite frantic moves, which O’Regan says could suggest they are driven by quantitative traders rather than active managers.
Netflix and Texas Instruments, which both reported results Tuesday after the close, were two of the S&P 500’s biggest laggards. Tesla will kick off Magnificent Seven earnings season within the hour.
Five of the other Mag 7 stocks will report next week, followed by Nvidia in November. Given the recent jitters, investors will pay close attention to how large tech firms such as Meta Platforms are handling AI spending.
