US Stocks: Nasdaq tumbles as Jackson Hole jitters hit tech stocks
The Nasdaq fell as megacaps lost, after having rallied for much of the year. Nvidia fell 3.5%, the biggest drop in nearly four months.
The key event this week is the Fed's annual symposium at Jackson Hole, Wyoming, from Aug. 21-23, where Powell's comments will be scrutinized for any clues on the central bank's outlook on the economy and monetary policy.
"It seems like folks are hedging a little going into Jackson Hole, thinking Powell might be more hawkish than markets currently appreciate," said James Cox, managing partner at Harris Financial Group.
Interest rate futures point to a total of two rate cuts this year worth 25 basis points each, with the first expected in September, according to data compiled by LSEG.
Some market participants also expressed some concerns about AI-related stocks after OpenAI's CEO Sam Altman said they are in a bubble in an interview with "The Verge" late last week.
The Dow Jones Industrial Average rose 10.45 points, roughly flat, to 44,922.27, the S&P 500 lost 37.78 points, or 0.59%, to 6,411.37 and the Nasdaq Composite lost 314.82 points, or 1.46%, to 21,314.95.
Steve Sosnick, chief strategist at Interactive Brokers, said some investors are taking some profits from tech stocks and rotating into other sectors. "(This move) spills into the broader market because of those stocks' weight in major indices," he added.
Still, six of the S&P 500 sectors rose. Real estate led the pack, up 1.8%, helped by better-than-expected housing data. On the other hand, technology and communications services lost over 1.9% and 1.2%, respectively.
A Reuters poll showed on Tuesday that the S&P 500 will end 2025 just below current near-record levels, at 6,300 points, reflecting tempered optimism amid ongoing concerns over the economic impact of President Donald Trump's global tariffs and uncertainty surrounding Fed rate cuts.
The blue-chip Dow briefly hit a record high on Tuesday, aided by a rise in Home Depot's shares after the retailer kept its annual forecasts intact.
Home Depot rose 3.17% despite missing quarterly results estimates, while rival home-improvement chain Lowe's also gained 2.18%.
Earnings from Lowe's and big-box retailers Walmart and Target later this week are now in focus as investors await more insight on the health of the American consumer.
"Consumers are still not really spending at full speed ahead, they're a little bit cautious," said Peter Cardillo, chief market economist at Spartan Capital Securities.
"They're waiting to see the full results of the tariffs' impact on the upcoming holiday sales in a couple of months from now."
Intel jumped roughly 7% after the chipmaker got a $2 billion capital injection
from Japan's SoftBank Group.
Palo Alto Networks rose 3.06% after the cybersecurity company forecast fiscal 2026 revenue and profit above estimates.
Medtronic lost 3.13%, after the company said it would add two new directors to its board after Elliott Investment Management took a large stake in the medical-device maker.
Advancing issues outnumbered decliners by a 1.06-to-1 ratio on the NYSE. There were 205 new highs and 62 new lows on the NYSE.
The S&P 500 posted 13 new 52-week highs and one new low while the Nasdaq Composite recorded 56 new highs and 88 new lows.
(Reporting by Carolina Mandl, in New York, Johann M Cherian and Sanchayaita Roy in Bengaluru; Additional reporting by Saeed Azhar; Editing by Devika Syamnath and Aurora Ellis)
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