The stock market dipped on Wednesday, driven by a decline in tech stocks and Target announcing the appointment of a new CEO. The Nasdaq Composite dipped around 1.3%, and the S&P 500 slipped 0.9%. The Dow Jones Industrial Average lost 75 points, or 0.2%.
Meanwhile, Target shares dropped over 11% in early trading, making the stock one of the S&P 500′s worst performers on Wednesday. Lowe’s earnings beat expectations, and the stock benefited from it.
Nvidia, Advanced Micro Devices, and Broadcom shares fell more than 3%. Shares of Palantir declined about 5.5%. Intel, Apple, Amazon, Alphabet, and Meta also declined.
Why is the stock market down today?
“It’s not a surprise to see some investors taking profits in tech stocks, which have had an incredibly strong run, with some up over 80% since the early April lows. Market volume in general is typically quite sparse in late August, leading to wider swings than fundamentals would warrant,” Carol Schleif, chief market strategist at BMO Private Wealth, told CNBC.
On the tech side, a possible contributor to the decline was a study from MIT’s Nanda Initiative that warned most corporations are not yet seeing any measurable return from their generative AI investments, Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management, tole the Associated Press.
Target’s shares dropped after the retailer named Michael Fiddelke as its next chief executive officer. The company said Wednesday the board unanimously elected Fiddelke, who currently serves as chief operating officer, to be CEO starting in February.
He will also join Target’s board, while current CEO Brian Cornell, who has led the big-box retailer since 2014, will transition to focus on his role as executive chair.
The decline in the stock market comes as investors are looking forward to July meeting minutes from the Fed. Fed Chair Jerome Powell will speak on Friday. According to CME’s FedWatch tool, Fed funds futures are pricing in a nearly 85% likelihood of the central bank cutting interest rates in September.
“Investors also remain cautious heading into Jackson Hole on Friday. If Powell’s language is more hawkish, that could pressure tech stocks even further, as a continuation of these elevated interest rates is generally a headwind for the tech sector,” Schleif further told CNBC.
