Stocks accelerated losses throughout Wednesday's session as all three major indices had their worst day in two weeks. Mega-cap tech stocks--the major market driver since the beginning of the coronavirus pandemic--declined, dragging down the rest of the market as sentiment soured towards future growth amid further economic stimulus and virus concerns.
On Wednesday, Federal Reserve Chairman Jerome Powell told Congress that further fiscal stimulus will be needed for U.S. economic recovery amid the coronavirus crisis. Lawmakers have struggled to pass a new fiscal package since the passage of the CARES Act, despite previous pandemic protections expiring.
FAANGM stocks--Facebook (NASDAQ: FB), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Netflix (NASDAQ: NFLX), Google (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT)--added to their already steep monthly losses experienced so far in September.
Meanwhile, IHS Markit's preliminary monthly purchasing managers' index (PMI) for manufacturing and services sectors showed steady activity in September over August. Manufacturing PMI matched consensus expectations by increasing to 53.5 from August's 53.1. Services PMI fell slightly to 54.6 from August's 55.0, falling slightly below consensus. However, readings above the neutral level of 50 indicate expansion for the sector.
"The question now turns to whether the economy's strong performance can be sustained into the fourth quarter," said Chris Williamson, chief business economist for IHS Markit, in a a statement. "COVID-19 infection rates remain a major concern and social distancing measures continue to act as a dampener on the overall pace of expansion, notable in consumer-facing series. Uncertainty regarding the presidential election has also intensified, cooling business optimism about the year ahead. Risks therefore seem tilted to the downside for the coming months, as businesses await clarity with respond to both the path of the pandemic and the election."
Here's how the market settled for the mid-week:
S&P 500 Index (NYSE: SPY): -2.37% or -78.64 points to 3,236.93
Dow Jones Industrial Average (NYSE: DIA): -1.92% or -525.05 points to 26,763.13
Nasdaq Composite Index (NASDAQ: QQQ): -3.02% or -330.65 points to 10,632.99
For Major Stock News, Nike (NYSE: NKE) shares lead gains to the Dow, but ultimately market sentiment soured too much for broader market gains. Tesla (NASDAQ: TSLA) shares slid slid over 10% following the electric carmaker's anticipated but ultimately lackluster Battery Day. Nikola (NASDAQ: NKLA) shares also continued to sell-off after the Wall Street Journal reported that talks between the electric-truck maker and several energy partners have stalled amid the stock's recent controversy. Peloton (NASDAQ: PTON) shares rose after Amazon disclosed that it did not produce the "Prime bike" advertised by Echelon as "Amazon's first-ever connected fitness product."
For Sector Performance, every industry fell alongside the broader market. The negative sector performance was as follows: Energy -4.55%, Information Technology -3.21%, Materials -2.93%, Real Estate -2.91%, Communication Services -2.68%, Consumer Discretionary -2.24%, Financials -2.19%, Industrials -1.76%, Utilities -1.61%, Consumer Staples -1.56%, and Health Care -1.08%.
For Commodities and Currency, the U.S. Dollar (NYSE: UUP) hit an eight-week high during Wednesday's session, slumping Gold (NYSE: GLD) prices as increased economic uncertainty continues to harm the yellow metal's outlook. Spot gold slipped 1.9% at price at $1,862.56 per ounce, while gold futures settled 2.1% lower at $1,868.40 per ounce. Crude oil prices rose Wednesday, as U.S. government data showed that crude and gas inventories dropped last week, but reignited coronavirus concerns continue to hold back any meaningful growth. International benchmark Brent Crude (NYSE: BNO) climbed 1.3% to $42.25 per barrel, while West Texas Intermediate (NYSE: USO) increased 0.3% to $39.93 per barrel.
For Thursday, investors will focus on the U.S. Labor Department's weekly jobless claims set to debut. Wall Street consensus estimates unemployment claims to total 850,000 for the week ended Sept.19.