U.S. Stocks Regain Ground But Remain Mostly Lower

After showing another significant move to the downside early in the session, stocks have regained some ground over the course of the trading day on Thursday. The major averages have climbed off their lows of the session, although the tech-heavy Nasdaq continues to post a steep loss.

Currently, the Nasdaq is down 186.29 points or 1.6 percent at 11,629.92, and the S&P 500 is down 24.73 points or 0.6 percent at 3,930.27. Meanwhile, the narrower Dow has shown a more notable recovery attempt and is down just 27.70 points or 0.1 percent at 31,482.73.

The early weakness on Wall Street reflected lingering concerns about higher interest rates and the impact on the global economy, which have weighed on the markets for the past several sessions.

Disappointing manufacturing data out of Europe and Asia has added to worries about the potential for a global recession.

A steep drop by shares of Nvidia (NVDA) also contributed to the early sell-off, with the graphics chipmaker plunging by 10.7 percent.

The decline by Nvidia comes after the company warned approximately $400 million in potential sales to China could be impacted by new U.S. licensing requirements on shipments of some of its most advanced chips.

Fellow chipmaker Advanced Micro Devices (AMD) has also moved notably lower after saying some of its chips would also be impacted by the new requirements.

The extended sell-off on Wall Street also came as the latest labor and manufacturing data was seen as confirming the Federal Reserve’s stance that it can remain aggressive with the tightening of policy.

With the more closely watched monthly jobs report looming, the Labor Department released a report this morning unexpectedly showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended August 27th.

The report showed initial jobless claims edged down to 232,000, a decrease of 5,000 from the previous week’s revised level of 237,000.

The dip came as a surprise to economists, who had expected jobless claims to inch up to 248,000 from the 243,000 originally reported for the previous week.

A separate report released by the Institute for Supply Management showed its reading on U.S. manufacturing activity remained at a two-year low in August.

The ISM said its manufacturing PMI came in at 52.8 in August, unchanged from July. Economists had expected the index to edge down to 52.0.

While the index remained at its lowest level since hitting 52.4 in June 2020, a reading above 50 still indicates growth in the manufacturing sector.

Sector News

While most of the major sectors have climbed off their worst levels of the day, semiconductor stocks continue to see substantial weakness.

With Nvida and AMD leading the way lower, the Philadelphia Semiconductor Index is down by 3.5 percent after hitting its lowest intraday level in well over a month.

Steel stocks also remain sharply lower amid concerns about the global economy, with the NYSE Arca Steel Index slumping by 3.5 percent to a one-month intraday low.

A steep drop by the price of crude oil also continues to weigh on energy stocks, as crude for October delivery is tumbling $2.50 to $87.05 a barrel.

Gold, computer hardware and networking stocks also continue to see notable weakness, while considerable strength has emerged among pharmaceutical and utilities stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index tumbled by 1.5 percent, while China’s Shanghai Composite Index fell by 0.5 percent.

The major European markets also showed significant moves to the downside on the day. While the U.K.’s FTSE 100 Index plunged by 1.9 percent, the German DAX Index and French CAC 40 Index slumped by 1.6 percent and 1.5 percent, respectively.

In the bond market, treasuries remain sharply lower after an early sell-off. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 13 basis points at 3.263 percent.

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