Nasdaq Composite falls 1.35% to 26,285 amid rising yields
The Nasdaq Composite fell 1.35% to 26,285.92 as Treasury yields hit multi-decade highs and inflation concerns persisted. The CNN Money Fear and Greed Index shifted to 'Neutral' at 54.3. Tech stocks like Western Digital and SanDisk led losses, while economic data showed slowing industrial production and declining pending home sales.
*this image is generated using AI for illustrative purposes only.
The Nasdaq Composite unofficially ended the trading session lower by 359.00 points, or 1.35%, finishing at 26,285.92. U.S. stocks settled lower on Tuesday amid concerns of persistent inflation, higher crude oil prices, and Treasury yields hovering near multi-decade highs.
Session performance
The following table summarises the Nasdaq Composite's closing data for the session:
| Metric: | Details |
|---|---|
| Closing level: | 26,285.92 |
| Change (points): | -359.00 |
| Change (%): | -1.35% |
The index closed unofficially at 26,285.92, reflecting a loss of 359.00 points from the prior session's close. Broader indices also declined, with the Dow Jones closing lower by around 116 points to 53,343.40 and the S&P 500 falling 0.69% to 7,691.76.
Market sentiment and sector moves
Investor sentiment weakened further as the CNN Money Fear and Greed Index moved to the "Neutral" zone on Tuesday, dropping from a prior reading of 58.4 to 54.3. Most sectors on the S&P 500 closed negative, with information technology, industrials, and materials stocks recording the biggest losses. However, energy and health care stocks bucked the trend, closing higher.
Individual stock declines were notable in the tech hardware space. Shares of Western Digital (NASDAQ: WDC) dropped 7%, while SanDisk Corp. (NASDAQ: SNDK) fell 9%. Fabrinet (NYSE: FN) shares plummeted around 19% after reporting fourth-quarter results and issuing first-quarter GAAP EPS guidance below estimates.
Economic data backdrop
On the economic data front, U.S. export prices declined 1.3% month-over-month in July, following a revised 0.7% fall in June. U.S. import prices fell by 0.4% month-over-month in July. U.S. industrial production rose by 0.2% in July, missing market estimates of a 0.3% rise after a revised 0.3% gain in June. Additionally, U.S. pending home sales declined by 2.3% month-over-month in July.
What the Numbers Show
The divergence between falling import/export prices and rising industrial production suggests mixed signals in the domestic economy. While price pressures eased slightly with export prices down 1.3%, industrial output growth slowed to 0.2% against expectations of 0.3%. This slowdown, coupled with a 2.3% drop in pending home sales, indicates potential cooling in economic activity despite the recent price declines.
How might the divergence between easing import/export prices and slowing industrial production influence the Federal Reserve's upcoming interest rate decisions?
Could the recent surge in Treasury yields near multi-decade highs trigger a broader rotation out of growth stocks and into defensive sectors like utilities or consumer staples?
What are the long-term implications for the tech hardware sector given the significant declines in companies like Western Digital and Fabrinet amid current macroeconomic headwinds?
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