Wall Street Ends Lower as Technology Stocks Weigh on Market Despite Strong Corporate Earnings

BY EMMANUEL OGBONNA

U.S. stocks closed mixed on Wednesday, with losses in several major technology companies offsetting gains across much of the broader market and leaving the main indexes under pressure.

The S&P 500 slipped 0.2%, marking its eighth decline in the past 11 trading sessions, as weakness in heavyweight artificial intelligence-related stocks overshadowed strong performances from several consumer-focused companies. The Dow Jones Industrial Average edged lower by just 13 points, while the Nasdaq Composite, which is heavily weighted toward technology companies, dropped 0.7%.

Although the major indexes finished in negative territory, market breadth remained relatively healthy. Nearly three out of every five companies in the S&P 500 advanced during the session, helping the benchmark recover from steeper losses earlier in the day.

One of the strongest performers was General Mills, whose shares surged 8.5% after the food manufacturer delivered quarterly earnings that exceeded Wall Street expectations. The company, known for household brands including Cheerios and Progresso, also unveiled a four-year restructuring initiative aimed at reducing costs by approximately $3 billion. Investors welcomed the plan as a significant step toward improving profitability and strengthening long-term financial performance.

Another bright spot came from Nike, which reversed early losses to finish 4.9% higher after reporting quarterly results that surpassed analysts’ forecasts. The athletic apparel giant continues to implement a turnaround strategy under Chief Executive Officer Elliott Hill. While Hill acknowledged that revenue growth continues to face several challenges, investors were encouraged by stronger-than-expected financial results and signs that the company’s recovery efforts are gaining traction.

Shares of Kroger also recovered from early declines to close 1.3% higher after the supermarket chain announced an agreement to acquire grocery and pharmacy retailer Giant Eagle in a transaction valued at $1.25 billion in cash. As part of the deal, Kroger will also assume approximately $400 million in liabilities. The acquisition will expand Kroger’s footprint across several Midwestern and Mid-Atlantic states, where Giant Eagle operates numerous supermarkets and pharmacy locations.

Despite those gains, the broader market was dragged lower by renewed selling in several of the largest technology companies that have benefited from the artificial intelligence boom over the past two years.

Micron Technology tumbled 10.6%, making it one of the day’s biggest losers among major technology stocks. Advanced Micro Devices (AMD) fell 6.9%, while Nvidia declined 1.3%. These companies have experienced significant volatility in recent weeks as investors reassess lofty valuations following their substantial rallies driven by enthusiasm surrounding AI-related investments.

Because these technology giants account for a large share of the market’s total value, their declines had an outsized impact on major indexes, particularly the Nasdaq Composite and the S&P 500.

Investor sentiment also shifted throughout the day following the release of new economic data showing that U.S. manufacturing continued to expand in June, although at a slower pace than economists had expected. A survey released by the Institute for Supply Management indicated that manufacturing activity remained in growth territory while price pressures eased compared with previous months.

The report was viewed positively by many investors because slower increases in prices could help reduce inflationary pressures across the economy. Lower inflation may lessen the need for the Federal Reserve to raise interest rates aggressively later this year, providing support for financial markets.

Following the economic data, U.S. Treasury yields retreated from their morning highs. The yield on the benchmark 10-year Treasury note briefly approached 4.50% before easing to 4.47% by the end of trading.

Lower Treasury yields generally improve borrowing conditions for businesses and consumers while making stocks relatively more attractive to investors. Rising bond yields in recent weeks had weighed on equities, particularly growth and technology companies, as higher borrowing costs can slow economic activity and reduce corporate earnings potential.

Treasury yields had climbed sharply following the outbreak of conflict involving Iran, as investors worried that higher energy prices could fuel inflation. However, Wednesday’s manufacturing report helped ease some of those concerns and contributed to the pullback in bond yields.

Gold prices also experienced significant swings during the trading session. The precious metal initially fell sharply, briefly dropping below $3,980 per ounce after retreating from record highs reached earlier this year. Investors had previously shifted toward interest-bearing assets as Treasury yields climbed.

As bond yields retreated later in the day, gold recovered much of its earlier losses and settled 1.1% higher at $4,082.40 per ounce, reflecting renewed demand for traditional safe-haven assets.

Oil prices moved lower as optimism grew that tensions between the United States and Iran could eventually ease, potentially allowing shipping through the Strait of Hormuz to resume without disruption. The strategic waterway remains one of the world’s most important routes for global crude oil exports.

Brent crude, the international benchmark for oil prices, declined 1.9% to settle at $71.57 per barrel as traders weighed the possibility of improved supply conditions if geopolitical tensions continue to ease.

By the closing bell, the S&P 500 had fallen 16.13 points to finish at 7,483.23. The Dow Jones Industrial Average slipped 13.96 points to 52,305.24, while the Nasdaq Composite lost 173.69 points to close at 26,040.03.

International markets delivered mixed performances. European indexes finished with modest gains and losses, while trading across Asia was similarly uneven.

South Korea’s Kospi index recorded one of the region’s largest declines, falling 2%. The benchmark has been among the world’s strongest-performing stock indexes this year, fueled largely by optimism surrounding artificial intelligence and semiconductor companies such as SK Hynix. Despite Wednesday’s decline, the Kospi remains up roughly 97% since the beginning of the year.

In Japan, the Nikkei 225 advanced 0.6% after the Japanese yen weakened to its lowest level against the U.S. dollar in four decades, a move that generally benefits Japan’s export-oriented companies by making their products more competitive in overseas markets.