In the latest trading session, benchmark equity indexes in the United States experienced a decline as the sell-off resumed following a brief rally on Tuesday. The Nasdaq Composite recorded a drop of 1.1%, settling at 16,195.8, while the S&P 500 decreased by 0.8%, closing at 5,199.5. The Dow Jones Industrial Average also faced a downturn, losing 0.6% and finishing at 38,763.5.
Among various sectors, consumer discretionary witnessed the sharpest decline, whereas utilities emerged as the leaders in gains. The stock markets had experienced a rebound on Tuesday, which followed a steep two-day decline attributed primarily to a less-than-expected US jobs report that fueled recession-related concerns among investors.
Despite this downturn, numerous analysts have commented that the apprehensions surrounding a recession may be exaggerated at this point. As noted by Oxford Economics in a client-oriented communication on Wednesday, market volatility in equities is likely to remain high as the US presidential election approaches.
"Historically, equity valuations have faced pressure ahead of elections, especially when the competition is tight," they stated. Turning to bond markets, the yield on the US 10-year treasury climbed by 6.3 basis points to reach 3.95%. In contrast, the two-year yield registered a slight decrease of 1.5 basis points, settling at 3.97%. In corporate news, shares of Super Micro Computer ($SMCI) saw a significant decline of 20%, marking it as the worst performer on both the S&P 500 and the Nasdaq indices.
The downturn followed the company's recent release of fiscal fourth-quarter earnings that fell short of Wall Street expectations, coinciding with the board's approval for a 10-for-1 forward stock split. Similarly, Airbnb ($ABNB) emerged as the second-worst performer, plummeting by 13%. The vacation rental platform reported a larger-than-anticipated dip in its second-quarter earnings due to escalating costs. On a more positive note, Fortinet ($FTNT) experienced a remarkable surge of 25%, claiming the title of the best performer on the S&P 500 and Nasdaq.
The cybersecurity firm enhanced its financial outlook for 2024 after reporting a robust second-quarter performance that exceeded expectations. Axon Enterprise ($AXON) also displayed impressive results, with shares climbing 18%. The company raised its revenue guidance for the year following second-quarter earnings that surpassed analyst projections. In commodities news, West Texas Intermediate (WTI) crude oil saw an uptick of 2.9%, reaching $75.34 per barrel.
Analysts at D.A. Davidson have attributed the increase to ongoing supply concerns within the market. From an economic perspective, the Mortgage Bankers Association announced a resurgence in mortgage application volume, reaching its highest level since January. This increase is notably linked to a rise in refinancing activity amid lower interest rates across various loan categories. In precious metals, gold prices experienced a slight decline of 0.4%, now priced at $2,423 per troy ounce, while silver fell by 1.7% to $26.75 per ounce..