The S&P 500 slid 0.33% to 5,813.67 on Wednesday. The Dow Jones Industrial Average lost 91.51 points, or 0.22%, to close at 42,141.54. The tech-heavy Nasdaq Composite declined 0.56% after earlier rising to a fresh record high.
It closed at 18,607.93. Google parent Alphabet exceeded analysts’ expectations due to strong performance from its cloud business. Shares jumped almost 3%.
In contrast, shares of chipmaker Advanced Micro Devices (AMD) slid more than 10% as its fourth-quarter results failed to impress investors. It looks as if technology results are still providing encouragement to investors who are overweight on the space,” said CFRA Research chief investment strategist Sam Stovall. The U.S. economy grew at an annualized rate of 2.8% in the third quarter, according to gross domestic product figures, slightly below economists’ expectations of 3.1%.
However, payroll data pointed to a stronger-than-expected labor market, with private-job creation jumping to its highest level in more than a year. Matt Stucky, chief portfolio manager at Northwestern Mutual, believes the market’s reaction to the upcoming presidential election will be more muted compared to 2016. “Things are uncertain, but I don’t think that this is a repeat of the volatility that we saw in 2016,” Stucky said.
Bank of America analysts believe the Federal Reserve remains on track for a 25 basis point cut at its meeting next week.
Tech stocks drive market declines
About 96.7% of traders are forecasting a 25 basis point cut.
Super Micro Computer saw its shares sink 32% on Wednesday, heading for their worst day since 2018. The decline came after the company disclosed that its auditor, Ernst & Young, had resigned, citing concerns about Super Micro’s accounting practices and the independence of its board. Financial advisory firm Janney Montgomery Scott warned that the S&P 500 could be due for a notable retreat in the not-so-distant future.
Dan Wantrobski, associate director of research, said the broad index is “vulnerable to a bigger correction,” which could occur by year-end or in the first quarter of 2025. “Betting on Trump — too many people are falling into this trap,” said Freedom Capital Markets chief global strategist Jay Woods, noting that betting odds do not necessarily correlate with election outcomes. Options traders are preparing for heightened volatility around next week’s election.
John Marshall of Goldman Sachs’ derivatives research team noted that options market pricing suggests a significant move, with S&P 500 options implying a +/- 2.1% shift on election day. Garmin’s shares surged nearly 24% in afternoon trading after the company reported robust third-quarter results. The stock hit a fresh intraday all-time high of $207.11 and is on track for a record close.
This year, Garmin shares have jumped more than 60%. The major averages ended Wednesday’s trading session in the red. The Dow Jones Industrial Average slipped 91.51 points, or 0.22%.
The S&P 500 and Nasdaq Composite declined 0.33% and 0.56%, respectively.
