On Wednesday, U.S. equity markets faced downward pressure, culminating in a notable 1% decline in the Nasdaq Composite index. This downturn coincided with heightened investor apprehension as market participants awaited an upcoming Supreme Court ruling concerning the legality of tariffs implemented by President Donald Trump.
The technology sector bore the brunt of the decline, particularly semiconductor companies. Shares of Broadcom Inc. (NASDAQ:AVGO), Nvidia Corp. (NASDAQ:NVDA), and Micron Technology Inc. (NASDAQ:MU) all concluded the trading day lower, reflecting broader concerns within the chip industry.
Financial institutions' stock performances were similarly subdued despite some positive corporate earnings reports. Bank of America Corp. (NYSE:BAC) and Citigroup Inc. (NYSE:C) both saw their shares end lower on the day even though their recent quarterly results contained encouraging metrics.
Amid these market movements, economic data released on Wednesday presented a mixed picture. Retail sales in the United States increased by 0.6% month-over-month in November, marking the strongest growth since July. This contrasted with a revised 0.1% decline observed in October. Additionally, the U.S. current account deficit narrowed by 9.2%, reaching $226.4 billion in the third quarter, outperforming market estimates that projected a $238 billion gap.
Producer prices rose 0.2% month-over-month in November, maintaining pace with October's 0.1% growth and aligning with analysts' expectations. These figures suggest a moderate uptick in wholesale inflation pressures during the month.
Sector performance on the S&P 500 diverged, with most industries finishing in positive territory. Energy, consumer staples, and real estate sectors recorded notable gains. In contrast, consumer discretionary and information technology stocks posted losses, diverging from the broader market trend.
Comprehensively, the Dow Jones Industrial Average declined approximately 42 points, closing at 49,149.63. The S&P 500 registered a decrease of 0.53%, ending at 6,926.60, while the Nasdaq Composite dropped 1% to settle at 23,471.75 on Wednesday.
Looking ahead, investors are anticipating earnings reports from Goldman Sachs Group Inc. (NYSE:GS), Morgan Stanley (NYSE:MS), and BlackRock Inc. (NYSE:BLK) later in the day, which could influence market direction further.
Adding context to investor sentiment, the CNN Business Fear & Greed Index moved into the “Neutral” range with a reading of 55 on Wednesday, down from 59.5 previously. This index, which gauges overall market mood utilizing seven equally weighted indicators, operates on the principle that increased fear tends to depress stock prices, while heightened greed encourages price rises. The scale runs from 0 to 100, where 0 indicates extreme fear and 100 signals extreme greed.
The index’s shift to neutrality suggests investors are balancing cautiousness with selective optimism amid mixed signals in both corporate earnings and economic data.
Notably, individual stock movements included Nvidia Corp. at $182.75, Broadcom Inc. at $338.75, Bank of America Corp. at $52.47, BlackRock Inc. at $1087.99, Citigroup Inc. at $112.35, Goldman Sachs Group Inc. at $928.99, Morgan Stanley at $181.00, and Micron Technology Inc. at $330.95. All these stocks, except Morgan Stanley which showed a slight increase, ended the session lower.
Overall, Wednesday's trading reflected an environment of investor prudence amid pending judicial decisions, mixed economic releases, and uneven sector performances. Technology and financial sectors displayed vulnerabilities even amid generally positive economic indicators and certain sectors’ gains.