WASHINGTON (dpa-AFX) - After moving sharply higher early in the session, stocks regained ground over the course of the trading day on Wednesday. The major averages climbed well off their worst levels of the day, although the Nasdaq and the S&P 500 remained in negative territory.
The tech-heavy Nasdaq ended the day down 142.10 points or 0.7 percent at 21,172.86 after plunging by as much as 1.9 percent in early trading. The S&P 500 also dipped 15.59 points or 0.2 percent to 6,395.78, while the Dow inched up 16.04 points or less than a tenth of a percent to 44,938.31
The early weakness on Wall Street largely reflected an extended sell-off by technology stocks, which led the markets lower during Tuesday's session.
Tech stocks moved lower following a report from Reuters indicating the Trump administration is looking into the federal government taking equity stakes in computer chip manufacturers that receive CHIPS Act funding to build factories in the country.
White House Press Secretary Karoline Leavitt had confirmed on Tuesday that Commerce Secretary Howard Lutnick was working on a deal to take a 10 percent stake in Intel (INTC).
'A positive spin on proceedings is that the stake taken by the US government may crowd in other investors and give them confidence to buy in,' said Danni Hewson, head of financial analysis at AJ Bell.
He added, 'Meanwhile the government taking partial ownership of a company in exchange for grants which were already offered might well send shivers down the spine of other businesses which rely on the largesse of the US state.'
Selling pressure waned over the course of the session, however, leading some traders to pick up stocks at relatively reduced levels.
Traders may also have been reluctant to make more significant moves ahead of Federal Reserve Chair Jerome Powell's highly anticipated speech at the Jackson Hole Economic Symposium on Friday.
Powell's remarks could have a significant impact on the outlook for interest rates ahead of the Fed's next monetary policy meeting in September.
CME Group's FedWatch Tool is currently indicating an 82.9 percent chance the Fed will lower rates by a quarter point next month.
Sector News
Airline stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Airline Index down by 2.3 percent.
Significant weakness was also visible among housing stocks, as reflected by the 2.3 percent slump by the Philadelphia Housing Sector Index.
Computer hardware and steel stocks also saw notable to the downside, while gold stocks moved sharply higher amid a rebound by the price of the precious metal.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index slumped by 1.5 percent, while China's Shanghai Composite Index jumped by 1.0 percent.
The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index shot up by 1.1 percent, the French CAC 40 Index edged down by 0.1 percent and the German DAX Index slid by 0.6 percent.
In the bond market, treasuries showed a lack of direction over the course of the session before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 4.296 percent.
Looking Ahead
Reports on weekly jobless claims, existing home sales and leading economic indicators may attract attention on Thursday, although activity may be somewhat subdued ahead of Powell's speech on Friday.
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