On Wednesday, key US benchmark equity indexes closed lower as market participants awaited fresh insights on the second-quarter economic growth figures. The Nasdaq Composite index experienced a drop of 1.1%, finishing at 17,556, while the S&P 500 index lost 0.6%, closing at 5,592.2. Furthermore, the Dow Jones Industrial Average saw a slight decline of 0.4%, ending the session at 41,091.4, marking a retreat from its record close achieved in the previous trading day. Among the sectors, technology faced the most significant downturn, while financials and health care managed to post gains.
Utilities remained relatively unchanged in the trading session, demonstrating stability amid the fluctuations observed in other sectors. Looking ahead, a second estimate by the Bureau of Economic Analysis is expected to indicate that the US economy grew at an annual rate of approximately 2.8% during the June quarter, which aligns with the preliminary estimate as per consensus data aggregated by Bloomberg. "We believe that recent jitters about US growth prospects are overdone," noted economists from Oxford Economics in a communication to their clientele.
“While we expect a slight deceleration in US gross domestic product growth, we do not anticipate this will significantly hinder global growth dynamics.” In remarks made on Friday, Federal Reserve Chair Jerome Powell emphasized that the "time has come" for interest rate reductions, affirming that the economy is expanding at a "solid" pace despite the underlying concerns. In the realm of economic news, the Mortgage Bankers Association reported a return to positive territory in mortgage application volume last week, which was primarily driven by purchase activity.
Also noteworthy, the US 10-year yield experienced a marginal increase of one basis point, settling at 3.84%. Conversely, the two-year yield remained relatively static at 3.87%, indicating a stable short-term interest rate environment. In company-specific news, Super Micro Computer (commonly known as $SMCI) witnessed a staggering 19% decline in its shares, making it the worst performer within both the S&P 500 and Nasdaq indices.
This decline followed the announcement from the artificial intelligence server manufacturer about the anticipated delay in filing its annual Form 10-K report, which came just a day after short-seller Hindenburg Research leveled accusations of "accounting manipulation" against the company. In a concerning turn for Bath & Body Works ($BBWI), the company revised its full-year sales outlook downward following fiscal second-quarter revenues that fell short of expectations, resulting in a 7% drop in shares, marking it the second-steepest decline on the S&P 500. J.M.
Smucker ($SJM) also faced a significant blow, with its shares decreasing by 5%, ranking among the worst performers on the S&P 500, after the food company reduced its guidance for fiscal 2025 in light of a slowdown observed in the convenience channel. In a positive development for Berkshire Hathaway, the company reached a market capitalization milestone of $1 trillion for the first time.
Class A shares experienced a rise of 0.8%, while class B shares saw an increase of 0.9%, reflecting strong investor confidence in the conglomerate’s diversified portfolio. Turning to commodities, West Texas Intermediate crude oil prices slipped by 1.1%, trading at $74.73 per barrel on Wednesday. Data from the government revealed that commercial crude stockpiles in the US experienced a smaller-than-expected draw last week. In the precious metals sector, gold prices fell by 0.4%, settling at $2,541.50 per troy ounce, while silver suffered a 2.5% slump, closing at $29.24 per ounce.
The stocks falling under notable mentions include $SMCI, $BBWI, and $SJM, along with general market indexes $US30 and $US500..