20.08.202514:28:08UTC+00Selloff for Tech Giants Gain Traction

U.S. stocks turned downward on Wednesday as investors continued to question whether the recent surge in the market, driven by AI optimism, had been exaggerated. This shift came ahead of the anticipated release of minutes from the Federal Reserve's latest meeting. The S&P 500 and the Nasdaq 100 declined by 0.7% and 1.3% respectively, while the Dow Jones Industrial Average experienced a more modest dip of 50 points. The prominent tech companies, referred to as the "Magnificent 7," saw further decreases amid concerns that their stock valuations might have become inflated. This sentiment aligns with research suggesting that many AI companies may not achieve profitability, especially as Meta has already restructured its AI division. Nvidia, Meta, and Alphabet all saw their shares drop by over 1%.

In the retail sector, performance was mixed. Target's stock plummeted by 10% despite surpassing earnings expectations, as it announced a new CEO. Estee Lauder also saw a 4% loss following a cautious future outlook. Conversely, TJX and Lowe's posted increases of 7% and 3% respectively after releasing their financial results. Investors are also keenly awaiting Walmart's earnings report, due tomorrow. Meanwhile, the upcoming minutes from the Federal Open Market Committee might provide insights into how policymakers are balancing labor market risks against persistent inflation, which could influence the future direction of global interest rates.