WASHINGTON (dpa-AFX) - After coming under pressure early in the session, stocks have moved sharply lower over the course of the trading day on Wednesday. The major averages have all moved to the downside, with the tech-heavy Nasdaq showing a particularly steep drop.
In recent trading, the major averages have fallen to new lows for the session. The Nasdaq is down 304.06 points or 1.7 percent at 17,450.76, the S&P 500 is down 62.64 points or 1.1 percent at 5,563.16 and the Dow is down 371.14 points or 0.9 percent at 40,879.36.
The weakness on Wall Street partly reflects anxiety ahead of the release of market leader Nvidia's (NVDA) fiscal second quarter results after the close of today's trading.
Shares of Nvidia are currently tumbling by 3.3 percent, more than offsetting the 1.5 percent jump seen during Tuesday's session.
On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.64 per share on revenues of $28.7 billion for the quarter.
'Under normal circumstances, beating earnings forecasts would traditionally be a positive share price catalyst,' said Dan Coatsworth, investment analyst at AJ Bell. 'However, so many investors view Nvidia as bulletproof that an earnings beat might not be enough to move the dial. What really matters is proof that AI is still red hot.'
'The results will need to show Nvidia's order book remains strong and that rumoured delays to its new Blackwell chip are only a short-term problem,' he added. 'If it disappoints on either account, there is the potential for a new equity sell-off around the world.'
Stocks are also under pressure as traders look ahead to Friday's release of the Commerce Department report on personal income and spending in the month of July, which includes readings on inflation said to be preferred by the Federal Reserve.
Economists currently expect the annual rate of consumer price growth to inch up to 2.6 percent in July from 2.5 percent in June, while the annual rate of core consumer price is expected to tick up to 2.7 percent in July from 2.6 percent in June.
While the data is not likely to affect optimism the Fed will lower rates next month, it could impact expectations for how quickly the central bank cuts rates.
During his speech at the Jackson Hole Economic Symposium last Friday, Fed Chair Jerome Powell said the 'time has come for policy to adjust' but noted the 'timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.'
Sector News
Computer hardware stocks continue to see substantial weakness on the day, contributing to the steep drop by the tech-heavy Nasdaq. Reflecting the weakness in the sector, the NYSE Arca Computer Hardware Index has plunged by 3.3 percent.
Super Micro Computer (SMCI) has led the computer hardware sector lower, with the server maker plummeting by 23.3 percent after saying it would delay the filing of its Annual Report on Form 10-K for the fiscal year ended June 30.
Considerable weakness also remains visible among gold stocks, resulting in a 2.7 percent slump by the NYSE Arca Gold Bugs Index. The weakness in the gold sector comes amid a decrease by the price of the precious metal.
Semiconductor stocks have also shown a significant move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 2.6 percent.
Steel, oil service and airline stocks are also seeing notable weakness, moving lower along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. While Japan's Nikkei 225 Index rose by 0.2 percent, China's Shanghai Composite Index fell by 0.4 percent and Hong Kong's Hang Seng Index slumped by 1.0 percent.
Meanwhile, European stocks moved mostly higher on the day. The German DAX Index climbed by 0.5 and the French CAC 40 Index edged up by 0.2 percent, although the U.K.'s FTSE 100 Index closed just below the unchanged line.
In the bond market, treasuries are showing a lack of direction after moving modestly lower over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 3.837 percent.
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