Wall Street mostly declines as tech names pull back from highs

[NEW YORK] Wall Street’s stocks finished mostly lower on Tuesday (Aug 19), dragged down by tech companies retreating from record highs, while a Home Depot earnings report lifted retailers.

The broad-based S&P 500 Index fell 0.6 per cent to 6,411.37, while the tech-focused Nasdaq Composite Index fell 1.5 per cent to 21,314.95.

The Dow Jones Industrial Average rose a marginal 10.5 points to 44,922.27, pulling back after hitting a record high on the back of Home Depot’s quarterly report.

Shares of the home improvement company rose 3.2 per cent after slightly missing analyst expectations but maintaining its full-year forecast.

Target, Walmart and Lowes report later in the week, with all eyes on potential impacts on consumers from US President Donald Trump’s tariffs.

“The consumer makes up two-thirds of the economy and retail earnings give you a good sense of the strength of the consumer,” Adam Sarhan of 50 Park Investments said.

AI chip-maker Nvidia led a slew of tech stocks facing pressure, falling 3.5 per cent, while Advanced Micro Devices dropped 5.5 per cent and software provider Palantir slid over 9 per cent.

Microsoft fell 1.4 per cent.

Shares of Facebook-parent Meta also fell over two per cent after The New York Times reported a major shakeup was forthcoming in its AI division.

“Considerable losses in mega-cap tech names have the S&P 500 and Nasdaq Composite facing pressure,” according to Briefing.com analysts.

Sarhan said that after hitting all-time highs last week, “the market is pulling back as investors digest a very big … move up”.

Traders are also anxiously awaiting US Federal Reserve chair Jerome Powell’s remarks on Friday at the Jackson Hole financial gathering, where he may offer clues as to how recent inflation and jobs data impact decision making on rate cuts in September.

Powell is expected to be “cautious about the economy because since the last time he spoke … economic data has deterred, has gotten weaker”, said Sarhan.

Traders currently price in an over 80 per cent likelihood that the Fed will cut, after resisting intense pressure from Trump and holding rates steady since last December.

“Just about everybody is saying that the Fed should cut rates … so now it’s just a matter of when,” added Sarhan.

Policymakers have been cautiously monitoring the effects of Trump’s wide-ranging tariffs on the world’s biggest economy.

Tuesday’s decline followed a tepid session a day earlier, when stocks ended mostly flat as traders awaited the outcome of high-level talks at the White House on the Ukraine-Russia war. AFP