Traders work on the floor at the New York Stock Exchange on Aug. 30, 2024.
Brendan McDermid | Reuters
Stocks wobbled Wednesday as Wall Street attempted to recover from a lackluster start to September.
The S&P 500 and the Nasdaq Composite slipped about 0.4% each. The Dow Jones Industrial Average slid lost 80 points, or 0.2%. All the major averages were higher earlier in the session.
“At least on the margins, you’re seeing some nibbling after that sell off yesterday,” said Truist’s co-chief investment officer Keith Lerner. “Investors are a bit on edge, it’s a low-conviction trade. Everyone’s waiting for this Friday employment report, and until then, we’re in a bit of a holding pattern.”
Nvidia fell as much as 3% following a Bloomberg report that the U.S. Justice Department sent subpoenas to the chipmaker. The move comes after Nvidia tumbled more than 9% Tuesday amid a broader pullback in semiconductors
Some megacap technology and chip stocks regained their footing Wednesday, with Advanced Micro Devices and Tesla rallying about 2% and 3%, respectively. Meta Platforms, Marvell Technology and Qualcomm edged higher.
Stocks bounced off their lows as the so-called yield curve of the Treasury market returned to a normal state. The curve had been inverted with the 10-year rate lower than the 2-year yield. This is a common recession signal and had worried investors. On Wednesday, the 10-year yield returned to even with the 2-year yield and went slightly higher.
Wall Street is coming off a losing session, with the major benchmarks posting their worst day going back to the Aug. 5th sell-off, as chip names struggled and the latest economic data implied slowing growth for the U.S. economy
Traders are bracing for more volatility in September, with many anticipating a pullback of 5% or more in this historically weak stretch for equities. Pullbacks like those experienced in recent weeks, however, shouldn’t dissuade investors, according to TD Wealth’s Sid Vaidya.
“From our standpoint, this is normal course, short-term volatility,” said the chief investment officer. “We wouldn’t change any positioning based on the last day and a half.”