S&P 500 Drops for Fourth Straight Day Amid Tech Weakness

Investors Stay Cautious Ahead of Nvidia Earnings and Fed Chair Powell’s Jackson Hole Speech

Wall Street Wobbles as Tech Falters Again

The S&P 500 closed lower for a fourth consecutive trading session, dragged down once more by large-cap technology stocks. Although the Dow Jones Industrial Average edged up slightly by 15 points (0.04%), both the S&P 500 dropped by 0.3% and the NASDAQ Composite fell by 0.7%, indicating a broader risk-off sentiment in the market.

Tech giants, including Apple and Amazon, led the downturn, extending recent losses as investor confidence wavered ahead of Nvidia’s upcoming results.

Nvidia Keeps Traders on Edge

Nvidia – a key player in the AI and semiconductor boom – saw its share price fluctuate throughout the session. Although it managed to close roughly flat, this followed a 3.5% fall on Tuesday as traders moved into wait-and-see mode ahead of the chipmaker’s next earnings report.

Why Nvidia Matters:

• It’s seen as a bellwether for AI-driven growth.
• A strong report could reignite momentum in the tech sector.
• A miss, however, could reinforce current caution and extend declines.

Fed Stays Cautious Amid Tariff Concerns

Minutes from the US Federal Reserve’s July meeting revealed a “wait and see” attitude towards further interest rate changes. Policymakers flagged early signs of inflation linked to recent tariffs imposed by President Trump and stressed the importance of understanding their full impact before acting.

All eyes now turn to Fed Chair Jerome Powell, who is due to speak at the Jackson Hole symposium on Friday. Many investors are expecting signals about a potential rate cut in September, spurred on by softer labour market data and easing inflation.

Key points from the Fed:

• The policy rate remains at 4.25%–4.50%.
• Officials remain concerned about inflation resurging.
• Uncertainty over trade tariffs adds complexity to policy decisions.

Trump Pressures Fed, Calls for Resignation

Adding to the drama, President Trump called for the resignation of Federal Reserve Governor Lisa Cook amid allegations of mortgage fraud. He also repeated his criticism of Powell, accusing him of acting "too late" on rate cuts.

This political tension continues to feed market uncertainty, particularly regarding the Fed’s independence and future decision-making.

Mixed Earnings From Major Retailers

Investors also weighed a series of mixed results from US retail giants:

Disappointments:

• Target shares dropped following a CEO change and sluggish sales.
• Estée Lauder fell after missing earnings estimates and issuing a downbeat forecast.

Bright spots:

• Lowe’s rallied after beating earnings and lifting guidance.
• TJX Companies also gained on better-than-expected sales.
• Analog Devices surged following strong quarterly results and a positive outlook.

Meanwhile, Hertz shares jumped 6% after announcing a partnership with Amazon to sell used vehicles via Amazon Autos – an unexpected win for the car rental firm.

Market Outlook: What Could Happen Next?

With Nvidia earnings looming and Powell’s Jackson Hole address imminent, markets are likely to remain volatile. Tech stocks, in particular, are in the spotlight, and any sign of softness in Nvidia’s numbers could extend the current downturn.

Investors should watch for:

• A bounce if Nvidia delivers strong results.
• Renewed pressure if Powell maintains a hawkish tone on interest rates.
• Further instability if political interference in the Fed increases.

Conclusion: Volatility Likely to Persist

Markets are entering a crucial few days. Between Fed policy signals, tariff worries, and Nvidia’s performance, investor sentiment could swing sharply. The S&P 500’s recent dip may be a sign of broader consolidation, or a pause before another rally – much depends on the signals from Washington and Wall Street.

Investors may benefit from:

• Reducing overexposure to tech in the short term.
• Diversifying across sectors.
• Keeping an eye on earnings momentum and macro signals before making bold moves.

Sources: (Investing.com, Reuters.com)