The tech-heavy Nasdaq ended the day down 142.10 points (0.7%) at 21,172.86 after plunging by as much as 1.9% in early trading. The S&P 500 also dipped 15.59 points (0.2%) to 6,395.78 while the Dow inched up 16.04 points or less than a tenth of a percent to 44,938.31.
Wall Street opened lower on Tuesday as technology stocks faced heavy selling, following reports that the Trump administration is considering taking equity stakes in chipmakers receiving CHIPS Act funding. The news sparked concern over government involvement in private companies, despite suggestions that such stakes could encourage additional investor confidence.
Selling pressure eased later in the session, with traders buying at discounted levels. Market participants remained cautious ahead of Federal Reserve Chair Jerome Powell's speech at the Jackson Hole Economic Symposium, which could influence expectations for a potential rate cut next month, currently seen as highly likely by CME Group’s FedWatch Tool.
Airline stocks substantially moved downwards, dragging the NYSE Arca Airline Index down by 2.3%. Housing stocks was significantly weak, as reflected by the 2.3% slump by the Philadelphia Housing Sector Index. Computer hardware and steel stocks too notably moved downwards while gold stocks moved sharply higher amid a rebound by the price of the precious metal.
Asia-Pacific stocks turned in a mixed performance. Japan's Nikkei 225 Index slumped by 1.5% while China's Shanghai Composite Index jumped by 1%. The major European markets too ended the day mixed while the U.K.'s FTSE 100 Index shot up by 1.1%, the French CAC 40 Index edged down by 0.1% and the German DAX Index slid by 0.6%.
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 4.29%.