The Nasdaq Composite experienced a significant downturn on Wednesday, dropping 314.82 points or 1.46% to close at 21,314.95. The decline was largely attributed to investors repositioning their portfolios ahead of Federal Reserve Chair Jerome Powell's highly anticipated speech at the Jackson Hole economic symposium.

Tech Sector Leads the Decline

Technology stocks, particularly the megacaps, bore the brunt of the sell-off. Nvidia, the chip giant that has been at the forefront of the AI boom, saw its stock price plummet by 3.5%, marking its most substantial single-day decline in nearly four months.

The broader market also felt the impact, albeit to a lesser extent:

• The S&P 500 fell 0.59% to 6,411.37
• The Dow Jones Industrial Average remained relatively stable, closing at 44,922.27

Market Expectations and Concerns

Investors are closely watching for signals about the future direction of monetary policy. Current interest rate futures suggest market expectations for two 25 basis point rate cuts this year, with the first potentially coming as soon as September.

Adding to market jitters were comments from OpenAI CEO Sam Altman, who suggested that AI stocks might be in a bubble, amplifying concerns about the tech sector's valuation.

Sector Performance

The market saw divergent performances across different sectors:

Notable Stock Movements

Several individual stocks made significant moves:

As the market braces for Jerome Powell's speech, investors remain cautious, particularly in the tech sector. The coming days may provide more clarity on the Federal Reserve's stance on interest rates and its potential impact on various market segments.

The U.S. stock market ended on a high note, with the Nasdaq Composite reaching a record closing high for the second consecutive day. The tech-heavy index climbed 0.98% to close at 21,450.02, propelled by strong performances in the technology sector.

Tech Giants Lead the Charge

Apple Inc. was at the forefront of the rally, with its shares surging 4.20%. The tech giant posted its most significant weekly gain since 2020, climbing an impressive 13.30%. The company's stock received an additional boost following an announcement that Apple would invest an extra $100 billion in the United States, bringing its total commitment to $600 billion over four years.

Broader Market Performance

The positive sentiment wasn't limited to the Nasdaq:

For the week, all major indices posted substantial gains:

Rate Cut Expectations Fuel Optimism

Investor optimism was largely centered around potential Federal Reserve rate cuts. Market expectations for at least a 25 basis point cut by September have reached 89.40%, indicating strong confidence in the Fed's dovish stance.

Corporate Highlights

Several companies saw significant movements based on positive news:

• Gilead Sciences jumped 8.30% after raising its full-year outlook
• Expedia Group rose 4.10% on improved forecasts

Earnings Growth Projections

Earnings growth estimates for over 450 S&P 500 companies have been revised upwards to 13.20%, a substantial increase from the 5.80% projection on July 1. This positive revision has contributed to the overall market optimism.

Federal Reserve Board Nomination

In related news, a new nomination for the Federal Reserve board was announced. Stephen Miran has been nominated to fill the position following Adriana Kugler's departure.

The combination of strong tech performance, positive earnings revisions, and expectations of accommodative monetary policy has created a bullish environment in the U.S. stock market, driving indices to new heights.