In a worrying trend observed in the financial markets, the widely followed SPDR S&P 500 ETF Trust ($SPY) experienced a notable decrease of 3.1%, while the Invesco QQQ Trust ($QQQ) suffered an even greater setback, plummeting 4.7% in premarket activity on Monday. This decline comes as traders react to escalating fears of a potential recession in the United States, prompting widespread sell-offs across stock sectors. The declines were echoed in futures trading where US stock indices also faced downward pressure.
The S&P 500 futures were down by 3%, futures for the Dow Jones Industrial Average fell by 2%, and the Nasdaq futures experienced a troubling drop of 4.5% before the commencement of regular trading. Investors are bracing themselves for significant economic data releases, highlighted by the S&P Global July PMI composite final due at 9:45 ET, followed by the July ISM Services Index at 10 am ET.
Furthermore, San Francisco Federal Reserve President Mary Daly is scheduled to speak at 5 pm ET, which may provide further insights into the current economic climate. In the cryptocurrency sphere, premarket activity saw bitcoin tumbling 14% while the ProShares Bitcoin Strategy ETF ($BITO) faced an even steeper decline of 18%.
This reflects a broader uncertainty among traders as market conditions remain volatile. Power Play: Technology stocks took a hit as well, with the Technology Select Sector SPDR Fund (XLK) retreating by 5.8%. The iShares US Technology ETF ($IYW) followed suit with a decline of 5.6%, and the iShares Expanded Tech Sector ETF ($IGM.US) posted a 5.3% drop.
In the semiconductor sector, the SPDR S&P Semiconductor ETF ($XSD) saw a 6.1% decline, while the iShares Semiconductor ETF ($SOXX) dropped nearly 7%. On the news front, shares of Apple ($AAPL) were down nearly 7% in recent premarket activity after Berkshire Hathaway (BRK.A, BRK.B) significantly reduced its stake in Apple, bringing it down to $84.2 billion in Q2, a notable decline from $135.4 billion at the conclusion of the previous quarter. Winners and Losers: In the energy sector, the iShares US Energy ETF ($IYE) gained slightly, up 0.04%, but this was overshadowed by the decline of the Energy Select Sector SPDR Fund ($XLE), which fell by 1.4%.
Golar LNG ($GLNG) experienced a 6.3% drop, while BP ($BP) declined by 3.6% as both companies announced the execution of commercial reset agreements for a floating liquefied natural gas vessel named Gimi. Turning to healthcare, the Health Care Select Sector SPDR Fund ($XLV) retreated by 0.6%. The Vanguard Health Care Index Fund ($VHT) and the iShares US Healthcare ETF ($IYH) remained inactive, while the iShares Biotechnology ETF ($IBB) fell by 2.5%.
Notably, Tenet Healthcare ($THC) stock decreased by 5% premarket after the company disclosed plans to divest its 70% ownership stake in Brookwood Baptist Health to Orlando Health for approximately $910 million in cash. In the consumer sector, the Consumer Staples Select Sector SPDR Fund ($XLP) dipped by 0.3%.
The Vanguard Consumer Staples Fund ($VDC) fell by 1.5%, and the iShares US Consumer Staples ETF ($IYK) remained inactive. The Consumer Discretionary Select Sector SPDR Fund ($XLY) lost 3.2%, with the VanEck Retail ETF ($RTH) also inactive. Meanwhile, the SPDR S&P Retail ETF ($XRT) declined by 2.8%. However, Freshpet ($FRPT) shares rose by 3% pre-bell after reporting a narrowed loss in Q2 along with increased revenue, prompting the company to raise its sales guidance for 2024. In the financial sector, the Financial Select Sector SPDR Fund (XLF) fell by 2.1%.
Direxion Daily Financial Bull 3X Shares ($FAS.US) dropped by 6.6%, whereas its bearish counterpart, Direxion Daily Financial Bear 3X Shares ($FAZ), was up by 6.5%. Banco Bradesco SA ($BBD) shares decreased by nearly 3% pre-bell despite the company reporting improved Q2 financial results. Looking into industrials, the Industrial Select Sector SPDR Fund ($XLI) retreated by 1.4%, and the Vanguard Industrials Index Fund ($VIS) saw a decline of 1.8%.
The iShares US Industrials ETF (IYJ) fell nearly 1%. Timken Co. ($TKR) shares dropped 3.3% before the opening bell following the announcement of its agreement to acquire CGI, a producer of precision drive systems that include those designed for medical robotics. Commodities faced downward pressure too; the front-month US West Texas Intermediate crude oil price retreated 2.2% to $71.93 per barrel on the New York Mercantile Exchange.
Natural gas prices fell by 3.5%, reaching $1.90 per million British Thermal Units. The United States Oil Fund (USO) plummeted nearly 3%, while the United States Natural Gas Fund (UNG) was down 3.8%. Gold futures for December dropped by 1.8%, settling at $2,425.80 an ounce on the Comex. Silver futures suffered a larger loss, down 5.4% to $26.87 an ounce.
The SPDR Gold Shares ($GLD) and iShares Silver Trust ($SLV) retreated by 2.1% and 3.3% respectively, reflecting a challenging environment for precious metals. The market landscape presents a complex picture, underscored by significant movements in various ETFs and a cautious sentiment directed towards stocks in light of potential economic uncertainties..