Traders work on the trading floor of the New York Stock Exchange on June 14, 2024.
Brendan McDermid | Reuters
this Nasdaq Index Tech stocks edged lower on Thursday as markets rotated on hopes of easing monetary policy and continued to struggle.
The technology index fell 0.2%, S&P 500 Index and Dow Jones Industrial Average Flat flashes all around.
The moves mark a continuation of a broader trend away from technology that has emerged in recent days. Wall Street has sold off artificial intelligence stocks as the growing likelihood of a rate cut by the Federal Reserve in September has boosted optimism in the broader market. On the other hand, this has largely helped small caps and more cyclical stocks, which are seen as bigger beneficiaries of lower borrowing costs.
The trend peaked on Wednesday, when the Nasdaq plunged 2.8%, its worst day since December 2022. rise. On the other hand, the Dow closed above 41,000 points for the first time.
This rotation also explains why small-cap stocks focus on Russell 2000 It has risen about 10% in the past five trading days. The benchmark index rose 0.5% in Thursday trading, the latest sign of growing optimism surrounding these stocks. By comparison, the Nasdaq fell more than 3% last week.
“Clearly the Fed’s easing of interest rates is good for small businesses,” said Charlie Ripley, senior investment strategist at Allianz. At the same time, “there’s a certain caution and profit-taking in technology trades that have been so lucrative this year.”
In corporate news, Explore Finance Shares rose 2% after second-quarter results beat expectations. beyond meat It then plummeted nearly 11% According to the Wall Street Journal, The meat-alternative company is meeting with bondholders to begin discussions about restructuring its balance sheet, people familiar with the matter said.
