Stocks fell on Wall Street, extending weakness into a holiday-shortened week. The S&P 500 fell 0.7% on Wednesday. The Dow Jones lost 198 points, or 0.6%, and the Nasdaq Composite lost 1.1%. Falls in several large tech stocks, including Apple, weighed on the market. Treasury yields rose after data showed the U.S. services sector remained strong. The 10-year Treasury yield rose to 4.30%. Roku rose after it said it would cut 10% of its workforce. The company also raised its quarterly revenue forecast. GameStop and Dave & Buster’s will post updated results after the close.
This is a breaking news update. An early AP report follows.
Stocks were broadly lower on Wall Street in afternoon trading Wednesday, extending weakness in a week that was shortened by the holiday.
The S&P 500 fell 0.8%, heading for losses for the week after two straight weeks of gains. The Dow Jones Industrial Average was down 202 points, or 0.6%, to 34,439 as of 2:30 p.m. ET. The Nasdaq Composite fell 1.2%.
Big tech stocks were one of the biggest drags on the market. Apple fell 3.9 percent and Nvidia fell 3.3 percent.
Healthcare stocks fell the most. Johnson & Johnson fell 1.2 percent and Pfizer fell 3 percent.
Several companies made big moves after reporting earnings and other updates. Drone maker AeroVironment raised its sales forecast for the year, sending shares up 21.8%. 0.9% annual increase It came after it gave investors an encouraging financial update and said it would cut 10% of its workforce.
European markets fell, while Asian markets were mixed.
GameStop and Dave & Buster’s will release their latest results after the close.
Investors are in for a relatively quiet week after the U.S. Labor Day holiday and a busy month of August.
The U.S. service sector remains healthy, according to a survey by the Institute for Supply Management.
The industry, which employs the majority of Americans, is growing faster than economists expected in August, surveys showed. The industry, one of the largest components of the U.S. economy, remains resilient in 2023 even as persistent inflation and rising interest rates squeeze consumers.
“It shows that there’s still a lot of demand in the services sector,” said Tom Helin, national investment strategist at US Bank Wealth Management.
Bond yields rose sharply following the report. The yield on the 10-year Treasury note, which affects mortgage and other lending rates, rose to 4.30% from about 4.25% before the survey.
The two-year Treasury yield, which tracks Fed expectations, rose to 5.04% from 4.96% before the poll.
The dominant economic theme remains inflation and interest rates, which the Federal Reserve has raised to lower prices. Investors Hope Fed Will Raise Rates Moderately Inflation has slowed in the coming months.
Wall Street expects the Fed to keep its benchmark interest rate unchanged at its next meeting in late September. Investors are mostly betting the central bank will maintain that pause for the rest of the year. Last week’s economic updates on consumer confidence, employment and inflation reinforced those hopes.
“It looks like we’re all rallying around a potential timeout,” Helin said.
Inflation has been moderating for months after the Federal Reserve aggressively raised interest rates starting in 2022, with its key rate rising to its highest level since 2001. The policy has fueled concerns that the central bank could be too aggressive and put the brakes on the economy. The strength of the growth is enough to tip the economy into recession.
A strong job market and consumer spending have supported the overall economy and avoided recession so far. Later in September, ahead of the Fed’s next meeting, Wall Street will get more economic updates on inflation and retail sales.
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