News

The Nasdaq (QQQ) ended sharply lower on Thursday as investors rotated out of Big Tech stocks and into smaller companies following softer-than-expected inflation data. The S&P 500 (SPY) also lost ground, while the Dow finished with modest gains. Interest rate futures suggest a strong likelihood of a Fed rate cut in September, buoyed by the latest Consumer Price Index report showing inflation eased in June.

Despite the easing inflation, major tech stocks saw significant declines. Nvidia (NVDA), Apple (AAPL), and Tesla (TSLA) led the losses, with Tesla experiencing its biggest one-day percentage drop since January. In contrast, the Russell 2000 index of small-cap companies surged, reflecting investor optimism that rate cuts would benefit smaller firms struggling with higher financing costs.

Market Overview:

• Nasdaq ended sharply lower, S&P 500 lost ground, Dow gained modestly.


• Interest rate futures suggest strong likelihood of Fed rate cut in September.


• Consumer Price Index report shows inflation eased in June.

Key Points:

• Major tech stocks, including Nvidia, Apple, and Tesla, saw significant declines.


• Russell 2000 (RUT) of small-cap companies surged.


• Investors optimistic about rate cuts benefiting smaller firms.

Looking Ahead:

• Upcoming Producer Price Index data and second-quarter earnings reports from major banks.


• Citigroup (C) slipped after being fined by U.S. regulators.


• Conagra Brands fell following a disappointing revenue and profit forecast.

The declines in tech stocks ended a streak of record high closes for both the Nasdaq and the S&P 500. The S&P 500 real estate index surged, trimming year-to-date losses, while the communication services and information technology indexes each fell more than 2%. Delta Airlines (DAL) and other major airline stocks slumped, attributed to consumer financial pressure from inflation.

Investors are now turning their attention to upcoming Producer Price Index data and second-quarter earnings reports from major banks. Citigroup slipped after being fined by U.S. regulators, while Conagra Brands fell following a disappointing revenue and profit forecast. Advancing issues outnumbered falling ones within the S&P 500 by a 3.7-to-one ratio.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.