On Wednesday, major U.S. equity indexes closed lower as investors awaited new insights into second-quarter economic growth. The Nasdaq Composite dropped 1.1%, closing at 17,556, while the S&P 500 saw a decline of 0.6%, finishing at 5,592.2. The Dow Jones Industrial Average also fell by 0.4%, settling at 41,091.4, moving back from its record close achieved during the previous trading session. The technology sector experienced the most significant downturn, showing steep losses.
Conversely, the financials and health care sectors recorded gains, while utility stocks remained largely unchanged. In anticipation of upcoming economic data, the Bureau of Economic Analysis is slated to release a second estimate on Thursday, which is expected to confirm that the U.S. economy grew at an annualized rate of 2.8% in the June quarter, a figure that mirrors the advance estimate, according to a consensus formed by Bloomberg analysts. Despite signals of slowing U.S.
economic growth, analysts at Oxford Economics expressed skepticism over recession fears in a note to their clients. They stated, "While U.S. economic growth is slowing, we think the evidence used to argue that the U.S. is entering a recession is pretty flaky. We expect growth to remain pretty close to its trend over the coming quarters." Federal Reserve Chair Jerome Powell noted on Friday that "the time has come" for potential interest rate cuts, providing reassurance that the economy continues to expand at a "solid" pace.
In related economic news, the Mortgage Bankers Association reported that mortgage application volumes in the United States returned to positive territory last week, driven primarily by purchasing activity. Additionally, the yield on the U.S. 10-year Treasury note rose by one basis point to 3.84%, while the rate for the two-year note remained relatively stable at 3.87%. Turning to corporate news, shares of Super Micro Computer ($SMCI) plummeted by 19%, making it the poorest performer on both the S&P 500 and Nasdaq indices.
This dramatic decline followed an announcement regarding expected delays in filing its annual Form 10-K report, occurring just one day after accusations from short-seller Hindenburg Research concerning possible "accounting manipulation." Meanwhile, Bath & Body Works ($BBWI) adjusted its full-year sales outlook downwards after reporting fiscal second-quarter revenues that fell significantly below expectations, resulting in a 7% drop in its stock price, making it the second-steepest decline on the S&P 500 list. Furthermore, J.M.
Smucker ($SJM) shares reduced by 5%, marking it as one of the worst performers on the S&P 500 following the company’s decision to lower its fiscal 2025 guidance amid a slowdown impacting the convenience channel. In contrast, Berkshire Hathaway (BRK.A, BRK.B) achieved a significant milestone, reaching a market capitalization of $1 trillion for the first time.
The company's class A shares saw an increase of 0.8%. In commodities, West Texas Intermediate crude oil dipped by 1.2% to $74.59 per barrel during Wednesday’s trading session, as government data indicated that commercial crude stockpiles experienced a smaller draw than what analysts had projected. Gold was also under pressure, dropping 0.5% to $2,541.40 per troy ounce, while silver saw a greater retreat, falling 2.6% to $29.20 per ounce..