Wall Street Drops As Tech Selloff Persists, European Shares Steady
Shares on Wall Street dropped for a second successive day on Wednesday as weakness in the tech sector persisted while a key meeting of central bankers later this week remained in focus for currency and rates traders.
The S&P 500 declined 0.8 per cent and the tech-heavy Nasdaq Composite dropped nearly 1.5 per cent in early trade, as the pressure persisted after a steep fall on Tuesday. The Dow Jones Industrial Average was down 0.2 per cent.Analysts pointed to a confluence of factors behind weakness in tech stocks, including concerns over steep valuations, investors exiting profitable positions and a general mood of risk aversion.
“I think we were priced for perfection in the U.S. and there was quite a lot of complacency in markets, so some summer volatility should have been expected,” said Ben Laidler, head of equity strategy at Bradesco BBI.Wariness over U.S. President Donald Trump’s growing influence over the sector has also been in focus for investors. U.S. Commerce Secretary Howard Lutnick is looking into the government taking equity stakes in Intel as well as other chip companies, two sources told Reuters.
The potential moves follow other unusual revenue-sharing deals Washington has recently struck with U.S. companies, including AI chip giant Nvidia and Advanced Micro Devices.
While the individual developments may be brushed aside by markets, they fall into the broader bucket of concerns over the institutional framework in the United States, Laidler said.
European shares managed to hold on to their gains from earlier in the day, and the pan-European STOXX 600 index was up 0.2 per cent. Britain’s FTSE 100 climbed to a record high, boosted by gains in consumer and healthcare companies.
The U.S. dollar weakened slightly against a basket of peers after Trump called on Federal Reserve Governor Lisa Cook to resign.
Reuters
