By Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., August 30, 2024.
Brendan McDermid | Reuters
Stocks wobbled Wednesday as Wall Street attempted to recover from a lackluster start to September.
The S&P 500 and the Nasdaq Composite hovered near the flatline, while the Dow Jones Industrial Average added 50 points, or 0.1%
“At least on the margins, you’re seeing some nibbling after that sell off yesterday,” said Truist’s co-chief investment officer Keith Lerner. “Investors are a bit on edge, it’s a low-conviction trade. Everyone’s waiting for this Friday employment report, and until then, we’re in a bit of a holding pattern.”
Nvidia fell slightly, clawing back a 3% loss following a Bloomberg report that the U.S. Justice Department sent subpoenas to the chipmaker. The move comes after Nvidia tumbled more than 9% Tuesday amid a broader pullback in semiconductors
Some megacap technology and chip stocks regained some footing Wednesday, with Advanced Micro Devices and Tesla rallying about 4% each. Meta Platforms and the VanEck Semiconductor ETF edged up 0.3%.
Stocks bounced off their lows as the so-called yield curve of the Treasury market returned to a normal state. The curve had been inverted with the 10-year rate lower than the 2-year yield. This is a common recession signal and had worried investors. On Wednesday, the 10-year yield returned to even with the 2-year yield and went slightly higher.
Wall Street is coming off a losing session, with the major benchmarks posting their worst day going back to the Aug. 5th sell-off, as chip names struggled and the latest economic data implied slowing growth for the U.S. economy. The 30-stock Dow fell more than 600 points, or 1.5%, while the S&P 500 slid 2.1%. The Nasdaq dropped 3.3%.
Traders are bracing for more volatility in September, historically a weak month for equities. Many investors anticipate a pullback of 5% or more in the coming weeks, although some money managers view any decline as a buying opportunity.
Corporate earnings season is largely behind investors, with Hewlett Packard Enterprise set to post earnings after the close. Dollar Tree shed nearly 19% after slashing its guidance.
