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Wall Street closed mixed on Wednesday, dragged down by tech stocks. Chip stocks continued to weigh heavy on the markets. Minutes from the last Fed meeting showed concerns over the rate cut timeline. Two of the three major stock indexes ended marginally in the green while one ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 48.44 points, or 0.1%, to close at 38,612.24. Eighteen components of the 30-stock index ended in positive territory, while 12 ended in negative.
The tech-heavy Nasdaq Composite lost 49.91 points, or 0.3%, to close at 15,580.87.
The S&P 500 added 6.29 points, or 0.1%, to close at 4,981.80. Nine of the 11 broad sectors of the benchmark index closed in the green. The Energy Select Sector SPDR (XLE), the Utilities Select Sector SPDR (XLU) and the Consumer Discretionary Select Sector SPDR (XLY) advanced 1.9%, 1.3% and 0.7%, respectively, while the Technology Select Sector SPDR (XLK) declined 0.6%.
The fear-gauge CBOE Volatility Index (VIX) decreased 0.5% to 15.34. A total of 10.5 billion shares were traded on Wednesday, lower than the last 20-session average of 11.7 billion. Decliners were in line with advancers on the NYSE. On the Nasdaq, declining issues outnumbered advancing ones by a 1.73-to-1 ratio.
Nvidia Earnings Concerns Continue to Weigh Down
Concerns over NVIDIA Corporation’s (NVDA - Free Report) fourth-quarter earnings, which were slated to be released after the bell on Wednesday, continued to dominate trade in the markets.
With the chipmakers’ shares skyrocketing more 325% in the 12 months ending February 22, there are prevalent concerns over the chipmaker being over-valued and the earnings reflecting the same. This continued to weigh on chip stocks and the tech sector in general as the tech-focused Nasdaq became the only benchmark index to lose out on the day. Nvidia stocks fell 2.9% on the day.
Fed Minutes From January FOMC Meet Show Rate Cut Concerns
The minutes from the Fed FOMC meeting from January were released on Wednesday, and it showed that most of the Fed officials present were concerned about the risks of cutting interest rates too soon. Their conversations reflected uncertainty about how long borrowing costs should remain at their present level.
While the officials mentioned that they are confident the Fed's policy rate can be brought down this year from the current 5.25-5.50% level, they expressed the need for greater confidence in falling inflation before rate cuts can commence.
This, too, had an adverse effect on the broader tech sector on the day because markets are eagerly waiting for the first rate cut announcement. As things stand, market participants are not expecting a rate cut before June.
Image: Bigstock
Stock Market News for Feb 22, 2024
Wall Street closed mixed on Wednesday, dragged down by tech stocks. Chip stocks continued to weigh heavy on the markets. Minutes from the last Fed meeting showed concerns over the rate cut timeline. Two of the three major stock indexes ended marginally in the green while one ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 48.44 points, or 0.1%, to close at 38,612.24. Eighteen components of the 30-stock index ended in positive territory, while 12 ended in negative.
The tech-heavy Nasdaq Composite lost 49.91 points, or 0.3%, to close at 15,580.87.
The S&P 500 added 6.29 points, or 0.1%, to close at 4,981.80. Nine of the 11 broad sectors of the benchmark index closed in the green. The Energy Select Sector SPDR (XLE), the Utilities Select Sector SPDR (XLU) and the Consumer Discretionary Select Sector SPDR (XLY) advanced 1.9%, 1.3% and 0.7%, respectively, while the Technology Select Sector SPDR (XLK) declined 0.6%.
The fear-gauge CBOE Volatility Index (VIX) decreased 0.5% to 15.34. A total of 10.5 billion shares were traded on Wednesday, lower than the last 20-session average of 11.7 billion. Decliners were in line with advancers on the NYSE. On the Nasdaq, declining issues outnumbered advancing ones by a 1.73-to-1 ratio.
Nvidia Earnings Concerns Continue to Weigh Down
Concerns over NVIDIA Corporation’s (NVDA - Free Report) fourth-quarter earnings, which were slated to be released after the bell on Wednesday, continued to dominate trade in the markets.
With the chipmakers’ shares skyrocketing more 325% in the 12 months ending February 22, there are prevalent concerns over the chipmaker being over-valued and the earnings reflecting the same. This continued to weigh on chip stocks and the tech sector in general as the tech-focused Nasdaq became the only benchmark index to lose out on the day. Nvidia stocks fell 2.9% on the day.
Fed Minutes From January FOMC Meet Show Rate Cut Concerns
The minutes from the Fed FOMC meeting from January were released on Wednesday, and it showed that most of the Fed officials present were concerned about the risks of cutting interest rates too soon. Their conversations reflected uncertainty about how long borrowing costs should remain at their present level.
While the officials mentioned that they are confident the Fed's policy rate can be brought down this year from the current 5.25-5.50% level, they expressed the need for greater confidence in falling inflation before rate cuts can commence.
This, too, had an adverse effect on the broader tech sector on the day because markets are eagerly waiting for the first rate cut announcement. As things stand, market participants are not expecting a rate cut before June.
Consequently, shares of Zscaler, Inc. (ZS - Free Report) and Intel Corporation (INTC - Free Report) slid 14.1% and 2.4%, respectively. Zscaler currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
No economic data was released on Wednesday.