Tech giants collapse on Wall Street: the stock that is unexpectedly soaring
Major indices on Wall Street are retreating amid concerns over inflation, as most leading technology companies record price declines, except for one giant that has introduced a new CEO.
The first trading day of September provided investors with a painful reminder of the risks that continue to hover over the global economy. Major indices on Wall Street traded lower after renewed tensions in the Middle East pushed oil prices up and brought the fear of another inflationary outbreak back to center stage. The Dow Jones index fell by about 0.7%, the S&P 500 index lost about 0.8%, and the Nasdaq index weakened by about 1.1%. Technology stocks led the negative trend, while energy companies benefited from the jump in oil prices. Conversely, airlines and cruise lines, whose operations are directly affected by fuel costs, stood out with declines.
The storm in the markets intensified following reports of damage to two large oil tankers as they were making their way out of the Persian Gulf. The reports pushed the price of a Brent barrel up by about 4% to a level of 94 dollars. WTI oil futures climbed by 3.7% and reached 89.41 dollars per barrel, the highest price since July 24. The main concern in the market is that continued escalation will lead to disruptions in oil traffic through the Strait of Hormuz and cause a prolonged rise in energy prices.
The developments also affected the debt market. The yield on the ten-year US government bond rose to 4.788%, the highest level since January 2025. The thirty-year yield reached 5.272%, while the two-year yield climbed to 4.362%. At the same time, the yield on the ten-year Japanese bond crossed the 3% threshold for the first time since 1996. The rise in yields reflects the fear that a prolonged increase in oil prices will weigh on inflation and force the Federal Reserve to raise interest rates. Market contracts gave a 66% probability of an interest rate hike as early as the central bank's next meeting.
Chip stocks and tech giants suffered significant pressure during trading. Nvidia fell by about 2% and Amazon lost about 1.5%. Almost all companies belonging to the "Magnificent Seven" group traded in negative territory. Apple's stock was an exception and rose with the official entry of John Ternus into the position of CEO instead of Tim Cook. Investors were also waiting for the publication of reports from Palo Alto Networks and Dell Technologies. Palo Alto is expected to report a profit of 0.97 dollars per share and quarterly revenue of 3.35 billion dollars, while Dell is expected to present a profit of 4.87 dollars per share and revenue of 45 billion dollars.
