Stock Market Today: Dow ends 504 points lower, Nasdaq suffers worst day since 2022 on disappointing big-tech earnings (2024)

Wednesday's Top Reads

Ether exchange-traded funds have arrived. They emerged about six months after their bitcoin counterparts hit the market, with a total of nine new ether ETFs starting to trade on Tuesday.

They saw a “marginal success” on their first day, according to Jake Ostrovskis, over-the-counter trader at crypto trading firm Wintermute. Still, the ETFs have yet to become as popular as their bitcoin counterparts, which was in line with market expectations.

Nine newly launched ether ETFs saw total net inflows of $106.7 million on their first day of trading, which compares with $655 million of inflows to bitcoin ETFs on their first day, according to data from multiple crypto research firms.

Ether ETFs generated a total trading volume of roughly $1.1 billion on debut day, compared with $4.5 billion of volume of bitcoin ETFs on their inaugural trading day.

“The difference in performance indicates varying levels of market confidence and interest between the two leading cryptocurrencies,” Alan Goldberg, crypto analyst at BestBrokers, wrote in a Wednesday note.

U.S. stocks finished sharply lower on Wednesday, led by a 3.6% drop in the Nasdaq Composite, after disappointing earnings from megacap technology companies triggered a flight to safety by investors.

Wednesday's market moves were "very much a continuation of the rotational activity we were seeing last week, but it hasn’t turned into an outright derisking yet," said Michael Reinking, a senior market strategist for the New York Stock Exchange.

Nonetheless, "as volatility increases and fast trends begin to break, that does trigger a systematic reduction of risk and we could enter into that feedback loop," Reinking wrote in a note.

The S&P 500’s utilities sector was holding up with sharp gains on Wednesday even as the U.S stock market broadly retreated.

The utilities sector, which is viewed as a defensive area of the stock market, was up 1.1% in late-afternoon trading, according to FactSet data, at last check. The S&P 500 was down 2.2% as the U.S. stock- market index approached the closing bell.

Shares of SunPower Corp. continued their rally Wednesday, climbing 10.5% despite the turmoil surrounding the maker of solar-energy technology. The stock, which ended Monday’s session up 31.3%, is on pace for a three-day winning streak, its longest since a five-day winning streak that ended July 12.

The stock is currently up more than 50% over this period, putting it on pace for its best three-day stretch since the three days ending May 14, 2024, when it rose 85.23%, Dow Jones Market Data show.

Last week SunPower shares had their worst week on record after the company announced changes to its customer financing options, the latest development in a turbulent spell for the Richmond, Calif.-based renewable-energy specialist.

Set against this backdrop, solar-energy names SunRun Inc., Sunnova Energy International Inc., Complete Solaria Inc. and the solar division of Tesla Inc., formerly SolarCity Corp., stand to benefit, according to Raymond James.

Speculation around who might win the White House in November — and what policies they may back — shouldn’t overshadow incoming economic data or messaging from the Federal Reserve.

“I would advocate for long-term investors to not get caught up in some of this seesaw” of market volatility ahead of the election, he told MarketWatch.

Catrambone will be focused on next week's Federal Reserve policy meeting and messaging around the health of the labor market and potential timing of rate cuts.

The Nasdaq Composite extended its losses heading into Wednesday's final hour of trading, and was headed toward its biggest one-day percentage decline in nearly two years.

Wednesday's stock-market selloff, triggered by disappointing earnings results from companies like Tesla Inc., sent the Nasdaq down by 3.4%, or 610 points, to around 17,387. The index hasn't fallen by so much in one day on a percentage basis since at least Nov. 2, 2022, when it dropped 3.36%.

Meanwhile, the Dow Jones Industrial Average was down almost 400 points, or 1%, at around 39,957. It is on pace to close lower for the fourth time in the past five sessions.

The S&P 500 was off 115 points, or 2.1%, at around 5,441. If those levels hold into the close, the index will end with its worst day since at least Feb. 21, 2023, when it fell 2%.

U.S. stocks were getting hammered Wednesday, as investors rushed to safe-haven assets after disappointing earnings from megacap technology companies sparked concerns that the AI optimism that has powered stock-market gains is losing steam.

Markets were "getting punished" on Wednesday, as investors were selling risk assets and picking up safe havens while "drifting into hibernation," said José Torres, senior economist at Interactive Brokers.

"For stocks, nothing is working, not Harris or Trump, with all major U.S. equity benchmarks in the red," he said in emailed commentary on Wednesday.

However, sectoral breadth isn’t as bad as one would think, with four out of 11 sectors gaining on the session, Torres noted. The S&P 500's energy, consumer-staples, healthcare and utilities sectors were trading in the green on Wednesday afternoon, while its consumer-discretionary, information-technology and communication-services sectors were taking a beating, according to FactSet data.

Despite the recent selloff, Torres said the equity correction is "far from over" as the S&P 500 is still trading close to 22 times earnings amidst quarterly results that are not impressing investors in the aggregate.

When China’s economy is strong, that helps ensure high copper prices due to strong demand, said Adam Koos, president and senior financial adviser at Libertas Wealth Management Group. However, “recent economic ‘droughts’ in China, such as industrial slowdowns and property-market issues,” he said, have caused the flow of demand to slow.

On Wednesday, copper for September delivery fell 5 cents, or 1.2%, to settle at $4.11 a pound on Comex.

Based the most-active contract, copper prices fell for an eighth consecutive session, which marked the longest losing streak since the 13-session drop that ended on Feb. 3, 2020. They settled at their lowest since April 2, according to Dow Jones Market Data.

Shares of the ARK Innovation ETF, the exchange-traded fund run by ARK Investment Management founder Cathie Wood, was tumbling Wednesday afternoon.

The ETF, which targets disruptive innovation as an investment theme in stocks, was down 4.6% in afternoon trading, according to FactSet data, at last check.

The actively managed fund was struggling more than the Invesco QQQ Trust Series I, a popular ETF tracking the technology-heavy Nasdaq-100 index that was falling 3.1%.

Major U.S. stock indexes were down Wednesday afternoon, with the S&P falling 1.9%, FactSet data show, at last check.

The U.S. economy grew at a brisk pace in the second quarter, the most recent gross domestic product report is likely to show, suggesting little risk of recession. But not all is well.

The economy likely grew at a 2.1% annual clip from April to June, according to economists surveyed by the Wall Street Journal.

Some forecasts, such as the one from the Atlanta Federal Reserve Bank, put the estimate at an even frothier 2.6%. In either case, it would be a marked improvement over the 1.4% reading in the first quarter

Here’s what to watch for in the second-quarter GDP report, due out Thursday morning: