[New York Stock Market] Mixed Close Amid Weakness in Major Tech Stocks... Nasdaq Down 1.46%

Semiconductor Stocks Including Nvidia Fall Across the Board
Nasdaq Up 40% Since April
"AI Trades Taking a Breather"
Focus on Powell's Jackson Hole Speech on August 22

The three major U.S. stock indexes closed mixed on August 19 (local time) in New York. The S&P 500 and Nasdaq indexes declined as technology stocks broadly weakened. With no clear catalyst, investors are awaiting Federal Reserve Chair Jerome Powell's speech at Jackson Hole scheduled for this week.

Reuters Yonhap News

On this day at the New York Stock Exchange, the blue-chip Dow Jones Industrial Average rose 10.45 points (0.02%) to close at 44,922.27. The large-cap S&P 500 index fell 37.78 points (0.59%) to 6,411.37, while the tech-heavy Nasdaq index slid 314.822 points (1.46%) to finish at 21,314.952.

Major technology stocks performed poorly, dragging down both the S&P 500 and Nasdaq indexes. Among individual stocks, semiconductor shares were particularly weak. Nvidia dropped 3.5%, AMD fell 5.44%, and Broadcom declined 3.55%. Tesla lost 1.75%, and Meta, the parent company of Facebook, dropped 2.07%. Palantir, an AI-based data analytics firm, plunged 9.35%. In contrast, Intel surged 6.97% after news broke that Japan's SoftBank would invest $2 billion to acquire about a 2% stake. Home Depot rose 3.19% despite second-quarter results missing market expectations, as the company maintained its annual outlook.

Jason Bronchetti, Chief Investment Officer (CIO) at Lincoln Financial, commented, "AI-related trades have not collapsed, but may be taking a breather," adding, "After the Nasdaq rose 40% since April, it is normal for the market to pause as it readjusts to recent economic indicators and anticipated Fed policy changes."

Investors are now focused on Jerome Powell's Jackson Hole speech, scheduled for 10 a.m. on August 22. Global financial markets are watching closely for the messages Powell will deliver regarding the economic outlook and monetary policy direction. With recent signs of a cooling labor market and mixed inflation forecasts, whether he signals a rate cut will be key. However, some predict that if Powell's remarks are more hawkish (favoring monetary tightening) than expected, the stock market could turn weaker.

The market currently sees a high likelihood of a rate cut in September. According to CME FedWatch, as of this day, there is an 84.8% probability that the Fed will lower the current federal funds rate of 4.25-4.5% by 0.25 percentage points in September.

Richard Saperstein, CIO at Treasury Partners, said, "The Fed is likely to use the Jackson Hole meeting as an opportunity to prepare the market for a rate cut in September and signal an easing stance through the end of the year." He added, "Since this will be Powell's last Jackson Hole meeting as chair, he is likely to emphasize the central bank's independence."

On August 20, one day later, the minutes from the July Federal Open Market Committee (FOMC) meeting will be released. With two members voting against last month's majority decision to hold rates steady, the minutes are expected to provide insight into the Fed's internal discussions on interest rates.

Corporate earnings announcements also continue. In addition to Home Depot, major retailers such as Walmart, Target, and Lowe's will report results this week. Amid aggressive tariff policies and conflicting inflation outlooks, the market is looking to these companies' earnings to gauge the health of U.S. consumer demand.

Geopolitical factors, such as efforts to arrange a summit between Russia and Ukraine to end the war, are also drawing investor attention.

U.S. Treasury yields are slightly lower in response to expectations of a rate cut. The yield on the benchmark 10-year U.S. Treasury note fell 3 basis points (1bp = 0.01 percentage point) from the previous session to 4.3%, while the 2-year Treasury yield was down 1bp at 3.75%.