THE GIST (“THE WHAT”)
Weakness in technology stocks weighed down on the broader S&P 500 index for the third session in a row as investors remain nervous about the prospects of the Fed keeping interest rates higher for longer. Gains in defensive sectors like utilities, health and real estate helped limit the day’s losses. Opening lower, the index managed to recoup some of the losses, closing the choppy session off of the day’s lows at 4415.14, down 14.34 points (-0.32%) over the previous session.
Note: Our daily “S&P 500 Trading plan” will be posted around 9:30/10:00am EDT, every trading day.
Trading Plans for THU. 09/07 – Back to the Basics
For the last published Results of the Morning Trading Plans, please click here
THE DETAILS (The “How & Why”):
In economic news, initial unemployment claims data came in at its lowest level since February, confirming the strength in the labor market by a surprise jump in U.S. Aug ISM services index that was released in the previous session that spooked investors. Dovish comments by Fed officials helped lift sentiment and contain losses. The 10-year Treasury yield took a breather, falling slightly by 2.2 basis points to settle at 4.258%.
Apple extended its recent declines, falling another 2.92% and leading the technology sector lower after China reportedly banned the use of iPhones by government-backed agencies. Suppliers of the iPhone giant also fell sharply on this news. Qualcomm, Qorvo and Skyworks Solution were sharply lower by more than 7% each. Bucking the day’s trend, Intel rallied 3.24% to register its longest winning streak in nearly 9 years on the back of AI optimism.
Amongst the worst decliners of the session was Seagate Technology Holdings, tumbling 10.9% following stock downgrade by Barclays citing weaking hard disk drive business. Align Technology and Insulet were the other major decliners, down 7.8% and 7.7%, respectively.
Capping the day’s losses were gains in health and utility stocks as investors favored defensive stocks in today’s risk-off sentiment. Centene, Eli Lilly, Amgen, Cigna Group were some of the gainers of the session, all jumping more than 2%.