By Purvi Agarwal and Niket Nishant
Aug 24 (Reuters) – The S&P 500 and the Nasdaq fell on Monday, dragged by technology stocks, while investors assessed the potential fallout from the U.S. pledge of an “economic D-Day” against Iran and looked ahead to Nvidia’s earnings and a key inflation report later this week.
The moves mark a sober start to a week that may determine whether equities can shrug off a flare-up in Middle East tensions and worries tied to a tense bond market.
U.S. Treasury Secretary Scott Bessent, who warned of an “economic D-Day” in an opinion piece published in the Financial Times, is scheduled to hold a press conference in the afternoon. The U.S. has threatened sanctions targeting Iran’s trade partners.
Chip stocks sold off, with the Philadelphia SE Semiconductor index falling 2.64% to its lowest in three weeks.
Nvidia lost 2.03%, Micron Technology shed 5.76% and Broadcom slid 1.74%, pressuring the S&P 500 Information Technology index.
Financials, however, gained 1.19%, with JPMorgan Chase up 1.49% and Visa adding 2.64%. They also kept the blue-chip Dow afloat.
At 11:55 a.m. ET, the Dow Jones Industrial Average rose 146.59 points, or 0.28%, to 53,423.60. The S&P 500 lost 13.52 points, or 0.18%, to 7,660.85, while the Nasdaq Composite fell 99.04 points, or 0.38%, to 26,081.41.
EYES ON WARSH’S JACKSON HOLE SPEECH
Concerns over ballooning government debt had pushed the 30-year yield to a 19-year high before the Treasury announced support measures last week.
CNBC reported on Monday that Bessent could tap Treasury’s near $1 trillion General Account to help fund bond buybacks. Yet, the 30-year U.S. Treasury yield remained above the 5% threshold.
This turbulence has sharpened focus on Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole symposium on Friday, where investors will look for clues on policymakers’ reading of the Treasury’s rescue efforts.
Quarterly results from AI giant Nvidia are expected to be another key catalyst for markets. Any sign of slowing growth could reignite concerns over stretched valuations.
“Nvidia needs to impress in order to keep one leg of the stock market stable, and Warsh needs to provide clarity on interest rates in order to keep the other leg stable,” said Richard Reyle, chief investment officer, Questar Capital Partners.
“The Treasury’s unprecedented action in the bond market puts Warsh in a tough spot, especially for a Chair that seems to prefer less communication.”
Markets will also monitor the Personal Consumption Expenditures report, the Fed’s preferred inflation gauge, due on Wednesday. It will follow a benign consumer inflation report earlier this month that reduced the chances of an immediate increase in interest rates.
Traders expect one 25-basis-point hike by the end of 2026, according to LSEG data.
Separately, U.S. President Donald Trump warned that tariffs on cars, trucks and automotive parts from Canada would be increased to 50% starting January 1 after trade talks collapsed over the weekend.
Automakers Ford and General Motors lost 3.9% and 1.9%, respectively, while trucking stocks J.B. Hunt Transport slipped about 5.4%.
Declining issues outnumbered advancers by a 1.14-to-1 ratio on the NYSE and by a 1.38-to-1 ratio on the Nasdaq.
The S&P 500 posted 16 new 52-week highs and six new lows, while the Nasdaq Composite recorded 62 new highs and 70 new lows.
(Reporting by Purvi Agarwal, Niket Nishant and Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar)
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