Stocks Fall as Chipmakers Decline and Bond Yields Rise

The major indexes gave up early gains and finished lower on Wednesday, as a decline in chip stocks and a rise in bond yields weighed on the market. The S&P 500 fell 0.77%, the Dow Jones Industrials declined 0.60%, and the Nasdaq 100 dropped 1.16%. The selling was broad-based, with nine of the 11 S&P 500 sectors ending in the red.

Chip Stocks Lead the Decline

Chip stocks were among the biggest decliners on Wednesday, with Nvidia, Broadcom, and ARM Holdings Plc falling more than 5%. Intel also dropped more than 4%, while Marvell Technology, Microchip Technology, ON Semiconductor, and NXP Semiconductors declined more than 3%. The declines in chip stocks were a major contributor to the market’s decline, as the sector is a key component of the S&P 500.

The semiconductor industry is a key component of the global economy.

Bond Yields Rise

Bond yields also rose on Wednesday, which contributed to the market’s decline. The 10-year Treasury yield rose 7.8 basis points to 3.970%, while the 2-year Treasury yield rose 5.6 basis points to 4.125%. The rise in bond yields was driven by a number of factors, including a strong auction of 10-year Treasury notes and a decline in demand for safe-haven assets.

Earnings Season Continues

Earnings season is in full swing, with a number of major companies reporting their quarterly results this week. Fortinet rose more than 25% after reporting better-than-expected earnings and raising its full-year revenue forecast. Axon Enterprise also rose more than 18% after raising its revenue guidance for the year. Global Payments rose more than 6% after reporting better-than-expected earnings.

The stock market can be volatile, but it’s also a key way for companies to raise capital.

Economic Data

A number of economic data points were released on Wednesday, including the latest reading on US consumer credit. The data showed that consumer credit rose $8.934 billion in July, which was weaker than expectations. The data also showed that the average 30-year fixed mortgage rate fell to a 15-month low of 6.55%.

Economic data can be a key driver of the stock market.

Conclusion

In conclusion, the stock market fell on Wednesday, driven by a decline in chip stocks and a rise in bond yields. Earnings season continues to be a major driver of the market, with a number of major companies reporting their quarterly results this week. Economic data also played a role, with the latest reading on US consumer credit showing a weaker-than-expected increase.

The stock market can be volatile, but it’s also a key way for investors to grow their wealth.