The three major stock indices of the New York Stock Exchange started lower. The performance of the U.S. retail giant Walmart has disappointed, which is believed to have dampened investor sentiment.
However, the technology-centered Nasdaq Composite Index is hovering near the lower end, suggesting that the recent selling pressure has eased somewhat.
As of 9:50 a.m. local time on the 21st, the Dow Jones Industrial Average on the New York Stock Exchange recorded a decline of 267.45 points (0.60%) from the previous session, reaching 44,670.86. The Standard and Poor's (S&P) 500 index dropped 22.59 points (0.35%) to 6,373.19, while the Nasdaq Composite Index pointed to a decrease of 55.91 points (0.26%) at 21,116.94.
The selling trend in technology stocks that swept the market this week is currently taking a breather. While major tech companies with market capitalizations above $1 trillion are mostly declining except for Alphabet, most are fluctuating within a narrow range near the lower end.
The Philadelphia Semiconductor Index, centered on artificial intelligence (AI) and semiconductor stocks, is experiencing a limited drop of about 0.25%. As concerns about an AI bubble are highlighted and investor sentiment weakens, attention is now turning to Jackson Hole.
The annual Jackson Hole symposium will start today and last for three days in Wyoming, USA, with Federal Reserve Chair Jerome Powell's speech scheduled for the 22nd.
While the stock market has already reflected expectations for interest rate cuts in its prices, the Fed remains cautious, as confirmed in the minutes of the July Federal Open Market Committee (FOMC) meeting. The positions of FOMC Commissioners appear to be evenly split between hawks and doves following the release of the July non-farm payroll figures.
This suggests that it may not be easy for interest rate cuts to proceed smoothly as the market desires. If Powell makes hawkish statements during his Jackson Hole speech, the market will inevitably have to readjust stock prices.
By sector, only consumer staples are down more than 1%. Other sectors are moving within a narrow range near steady levels.
Walmart, the largest retail chain in the U.S., saw its stock price drop more than 4%. Although its second-quarter revenue exceeded expectations, the earnings per share (EPS) fell short, disappointing the market. While Walmart had raised its annual earnings forecast based on solid consumer spending, the reality was different. Walmart's underperformance has also pulled down large retail chains like Costco and Target by more than 1%. Walmart is also dragging down the Dow Jones Industrial Average.
However, weekly unemployment claims have increased, exceeding expectations. The slowdown in the labor market supports the possibility of interest rate cuts. According to the U.S. Department of Labor, for the week ending on the 16th, the number of new unemployment claims was reported at a seasonally adjusted 235,000, an increase of 11,000 compared to the previous week.
U.S. semiconductor company Intel continues to decline by more than 2% today.
European markets are weak. The Euro Stoxx 50 index is down 0.40% compared to the previous day. The French CAC 40 index has fallen by 0.59%, while the British FTSE index is down 0.04%. The German DAX index is down by 0.21%.
International oil prices are widening their losses. As of 9:52 a.m., the price of West Texas Intermediate (WTI) for September delivery is recorded at $62.56 per barrel, down 0.24% from the previous session.