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Stock Market News for Aug 22, 2023

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The Nasdaq and the S&P 500 ended their five-day losing streak on Monday even though Treasury yields reached their highest levels in more than a decade, while concerns grew over China’s economy. However, the Dow ended in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) declined 0.1% or 36.97 points to close at 34,463.69 points. The blue-chip index dropped as much as 252.2 points at one point of the day.  

The S&P 500 rose 0.7% or 30.06 points to end at 4,399.77 points. Consumer staples, real estate and utility stocks were the biggest losers.

The Consumer Staples Select Sector SPDR (XLP) lost 0.7%, while the Real Estate Select Sector SPDR (XLRE) fell 0.9%. The Utilities Select Sector SPDR (XLU) declined 0.6%. Six of the 11 sectors of the benchmark index ended in negative territory.

The tech-heavy Nasdaq jumped 1.6% or 206.81 points to finish at 13,497.59 points.

The fear-gauge CBOE Volatility Index (VIX) was down 0.98% to 17.13. Decliners outnumbered advancers on the NYSE by a 1.44-to-1 ratio. On Nasdaq, a 1.08-to-1 ratio favored declining issues. A total of 9.75 billion shares were traded on Monday, lower than the last 20-session average of 10.99 billion.

Concerns Gow on Rise in Treasury Yields

Stocks ended lower last week as concerns grew over the rise in long-term treasury yields. The concerns were back on Monday as the 10- and 30-year Treasury yields hit new multi-year highs. The 10-year Treasury yield ended the New York session at 4.339%, its highest level since Nov 6, 2007. The 30-year Treasury yield closed at 4.445%, hitting its highest level since Apr 11, 2007.

Yields, which rise when bond prices decline, generally have an adverse impact on tech and other growth stocks because higher yields reduce the present value of their promised future earnings. The bond selloff comes just days ahead of Fed Chair Jerome Powell’s Jackson Hole speech, which hints at how the markets want to position themselves before the speech.

Rising yields have been impacting big tech companies as they tend to make stocks look less attractive to investors. Tech stocks have been largely responsible for the rally in 2023. On Monday, tech stocks held their ground but they have had a disappointing August so far and are down 5.9% for the month. 

NVIDIA Corporation ((NVDA - Free Report) ), which will announce its quarterly results on Wednesday, saw its shares jump 8.5% on Monday. NVIDIA carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Experts believe that NVIDIA’s results could rule the market sentiment for some time given that the chipmaker has been one of the biggest success stories of the 2023 rally after it sparked a frenzy for AI-oriented stocks following an upside earnings surprise earlier this year.

Other major tech stocks also gained on Monday. Shares of Apple Inc. ((AAPL - Free Report) ) rose 0.8%, while Alphabet Inc. ((GOOGL - Free Report) ) gained 0.7%.

Investors are also keeping a close watch on China’s economy, which has raised concerns lately as the situation continues to deteriorate. On Monday, Wall Street had a subdued response to China's central bank's decision to lower interest rates, with China's CSI 300 index closing down 1.4% to start a fresh week.

No major economic data was released on Monday.


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