Market Volatility Persists as Tech Stocks Drive U.S. Indexes Lower

U.S. stocks closed lower on Wednesday, led by a decline in technology shares. Investor concerns grew due to weak demand in a 10-year Treasury auction. Despite early gains, major indexes turned negative by the end of the day, with the S&P 500, Nasdaq, and Dow Jones all posting losses.

U.S. stocks ended lower on Wednesday as technology shares declined, with investor jitters stoked by weak demand in a 10-year Treasury auction.

Indexes started the day higher and began to lose steam in afternoon trading. With investors still nervous after a recent steep selloff in global stocks, equities pared gains further after the Treasury auction.

All three indexes then went red, and losses steepened just before the close. 'There's just a lot to worry about over the next eight weeks or so, so I'm expecting more volatility. I wouldn't be surprised if after a few days of rally you have another small selloff,' said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

Investors have been worried about a possible U.S. recession and weaker-than-expected forecasts from U.S. companies, among other factors. According to preliminary data, the S&P 500 lost 40.36 points, or 0.77%, to end at 5,199.67 points, while the Nasdaq Composite lost 167.99 points, or 1.03%, to 16,198.86. The Dow Jones Industrial Average fell 222.06 points, or 0.57%, to 38,775.60.

Stocks got early support when Bank of Japan (BOJ) Deputy Governor Shinichi Uchida said the central bank would not raise rates when financial markets are unstable, pushing the yen lower and boosting market sentiment. The BOJ's surprise rate hike on July 31 to a level unseen in 15 years had sparked a global stocks rout as investors unwound their sharp yen carry trade positions following a surge in the low-yielding currency, widely used for acquiring high-yielding assets.

Shares of Walt Disney fell as it predicted a 'moderation in demand' at its theme park business in the coming quarters. Super Micro Computer shares dropped after it reported quarterly adjusted gross margins below estimates. Rival Dell Technologies dropped 4.9%.

Markets await more commentary on monetary policy from U.S. central bank officials next week, in the run-up to the Jackson Hole, Wyoming, event where Fed Chair Jerome Powell is scheduled to speak. (Additional reporting by Shubham Batra and Shashwat Chauhan in Bengaluru; Editing by Sriraj Kalluvila, Shinjini Ganguli and David Gregorio)

(With inputs from agencies.)