On Thursday, US stocks closed sharply lower for the third consecutive session as the August gloom continued on Wall Street.
The leading Dow Jones Industrial Average (^DJI) is down about 0.8%, while the S&P 500 (^GSPC) is down about the same amount. The technology-heavy Nasdaq Composite (^IXIC) lost more than 1% for the third day in a row.
Meanwhile, the 10-year US Treasury yield settled just below 4.3%, staying near recent highs. Globally, yields are at highs not seen since the depths of the Great Recession.
Healthcare stocks, most notably CVS (CVS), were criticized by a report that insurer Blue Shield of California is looking to reduce its reliance on CVS for its pharmacy services and instead shift more to drugmaker Amazon and Mark Cuban. CVS stock finished down more than 8%.
Meanwhile, concerns about the Fed’s path on interest rates have returned to the markets. Stocks closed firmly in the red on Wednesday after the release of minutes from the Fed’s latest policy meeting indicated that the committee remains focused on reining in inflation and would not rule out further hikes in September.
On the earnings front, Walmart Inc (WMT) took center stage to end a busy week in retail. The retailer posted a strong quarter that saw sales and traffic increase in its stores as Americans continued to look for discounts. However, its stock fell more than 2% on Thursday.
The highlight of Thursday’s economic data came in the form of weekly jobless claims, which fell last week, indicating continued resilience in the labor market.
Investors are closely watching the ongoing rise in bond yields, with the 10-year US Treasury yield remaining near recent highs at just below 4.3%. This trend is causing concerns in the stock market, leading to the third consecutive day of losses for major indices.
The technology sector, in particular, has been hit hard, with the Nasdaq Composite losing more than 1% for the third day in a row. Healthcare stocks also took a hit, with CVS facing criticism over a report that Blue Shield of California is looking to shift its pharmacy services away from the company and towards Amazon and Mark Cuban. As a result, CVS stock finished down more than 8%.
The Federal Reserve’s stance on interest rates is also weighing on investor sentiment, with the release of minutes from the Fed’s latest policy meeting indicating a continued focus on reining in inflation. The possibility of further rate hikes in September has added to the uncertainty in the market.
On the earnings front, Walmart Inc. reported a strong quarter with increased sales and traffic in its stores. Despite the positive results, Walmart’s stock fell more than 2% on Thursday, reflecting broader market concerns.
In economic news, weekly jobless claims fell last week, signaling continued strength in the labor market. However, the overall market sentiment remains cautious as investors navigate the impact of rising bond yields and the Fed’s monetary policy decisions.
As the stock market continues to face challenges, investors are advised to stay informed and closely monitor developments that could impact their portfolios. With volatility likely to persist in the coming days, it is important to have a diversified investment strategy and to be prepared for potential market fluctuations.
