Tech Stocks Tumble Amid Rising Treasury Yields and Jackson Hole Symposium

U.S. stock indexes fell on Thursday, primarily affected by declining technology shares and rising Treasury yields, as investors await the Jackson Hole Economic Symposium. Weakness in major tech stocks impacted the Nasdaq. Central bank officials’ remarks and jobless claims suggest a potential rate cut in September.

All three major U.S. stock indexes lost ground on Thursday, weighed down by technology shares, as Treasury yields rose on easing recession fears and global central bank officials convened at the Jackson Hole Economic Symposium.

The tech-heavy Nasdaq was particularly impacted by losses in major tech stocks, commonly referred to as the Magnificent Seven. "There doesn't appear to be any kind of clear catalyst driving this sell-off," said Scott Ladner, chief investment officer at Horizon Investments in Charlotte, North Carolina.

Investors are likely adjusting positions ahead of Nvidia's earnings next week and Federal Reserve Chair Jerome Powell's speech in Jackson Hole tomorrow. The central bank's annual Economic Symposium has drawn officials from around the world, with investors keenly awaiting Powell's address for signals on the timing and extent of the Fed's policy easing cycle.

Market expectations are that Powell will announce a rate cut in September, said Ladner. "He'll be careful about committing to a 25 or 50 basis point cut, but will likely nudge the market towards a 25 basis point cut. He is also expected to indicate that a weakening labor market could accelerate rate reductions," Ladner added.

News of increasing jobless claims, following a downward revision in payroll benchmarks, suggests the labor market is gradually softening. This has alleviated recession fears and bolstered the case for a 25 basis point rate cut at the Fed's meeting in September. Fed Presidents Frank Schmid, Susan Collins, and Patrick Harker echoed this sentiment on Thursday, suggesting a phase of rate cuts is imminent.

"What Fed officials are saying is that a rate cut is definitely on the table, but there's still time between now and September and data can move things," Martin said. Preliminary data showed the S&P 500 lost 48.66 points, or 0.87%, to end at 5,572.19 points, while the Nasdaq Composite fell 292.92 points, or 1.63%, to 17,626.07. The Dow Jones Industrial Average dipped 161.02 points, or 0.39%, to 40,729.47.

In individual stock news, Snowflake revised its full-year product revenue forecast upward but saw shares decline as its margin outlook remained steady. Zoom Video Communications shares rose after the company raised its annual revenue forecast. Conversely, Advance Auto Parts shares dropped after it cut its annual profit forecast.

(With inputs from agencies.)