4:16pm: Tech stocks in the red
Stocks finished Wednesday’s session mixed, as a pullback in tech stocks saw the Nasdaq fall 0.7%. The index closed at 21,171 points, while the S&P 500 was down 0.2% at 6,400 points and the Dow Jones added 0.1% at 44,985 points.
“It has been a miserable week for tech stocks in the US, which have caught a bad case of the AI chills,” IG chief market analyst Chris Beauchamp said.
“The mini-panic induced by Altman’s comments and the MIT article have not yet subsided, though in most cases this is still a trimming of recent gains rather than any bigger rout. It is August, after all, and as thoughts turn to Jackson Hole on Friday we are bound to see some prudent derisking.”
3:52pm: Proactive news headlines
- Sonoro Gold is raising C$525,000 through a non-brokered private placement as it continues work on its Cerro Caliche gold project in Sonora, Mexico.
- Graphene Manufacturing Group is raising fresh investment via a C$5 million bought deal, giving investors a new entry point into the Australia-based clean-tech firm as it works to commercialize its graphene-based products.
- Excellon Resources told investors it has now closed an offtake and financing agreement with Glencore subsidiaries to support the restart of the Mallay silver mine in Peru.
- Baselode Energy has moved a step closer to closing its all-share merger with Forum Energy Metals after Forum shareholders overwhelmingly backed the deal in a vote held Tuesday.
- Nano One Materials told investors it has installed and commissioned a proprietary agitator in the full‑scale One‑Pot reactor at its Candiac facility in Québec.
3:17pm: Market movers
- James Hardie shares tumbled as much as 35% on Wednesday, marking their steepest one-day drop since 1973, after the building materials company posted weaker-than-expected quarterly results and sharply cut its outlook for the year.
- Hertz shares jumped more than 5% after it announced it has partnered with Amazon Autos to sell a portion of its used vehicle inventory through Amazon's automotive retail platform.
- Artificial intelligence stocks, including Palantir Technologies, Nvidia, and Advanced Micro Devices, traded lower on Wednesday amid a broader tech-sector selloff, highlighting growing investor caution after an extended run-up in valuations.
- Guess? shares surged as the American clothing company revealed it will go private in a deal with Authentic Brands that values it at $1.4 billion.
- Estee Lauder shares tumbled as the beauty giant’s fiscal year 2026 outlook fell short of expectations amid tariffs and consumer weakness in its major markets.
- TJX shares rose after the off-price retail giant beat expectations for the second quarter and raised its full-year outlook.
- Lowe's delivered a solid quarterly performance and announced a major acquisition aimed at deepening its reach into the professional construction market, sending its shares higher.
2:42pm: Fed divided
Federal Reserve officials expressed diverging views at their July 29–30 policy meeting, with two governors dissenting from the decision to leave interest rates unchanged, minutes released Wednesday showed.
The Federal Open Market Committee (FOMC) voted to keep its benchmark federal funds rate in the 4.25%–4.5% range, where it has remained since December 2024.
Governors Michelle Bowman and Christopher Waller opposed the decision, arguing instead for a quarter-point cut to cushion what they saw as growing risks to employment.
It was the first time in more than three decades that multiple governors dissented from a rate decision.
The minutes highlighted a central debate within the Fed: whether inflation or labor market weakness poses the greater risk.
“Participants generally pointed to risks to both sides of the Committee’s dual mandate, emphasizing upside risk to inflation and downside risk to employment,” according to the minutes.
A majority of officials judged inflation risks as more pressing, while “a couple” viewed labor market deterioration as the greater concern.
Tariffs introduced by President Donald Trump featured prominently in the discussions, with policymakers warning about their potential to drive up prices.
1:27pm: Jackson Hole speech eyed
Federal Reserve Chair Jerome Powell will deliver his highly anticipated Jackson Hole speech on Friday at 10 am Eastern Time, with markets focused on the outlook for interest rates amid mixed signals from the labor market and inflation.
Deutsche Bank analysts expect Powell to strike a more balanced tone than at July’s FOMC meeting, when he called the labor market “solid” and inflation still too high.
On inflation, Powell is expected to maintain a hawkish tilt, suggesting it is still early to fully assess the impact of tariffs, while recent data point to persistent core goods inflation through year-end, the analysts believe.
The key for markets will be whether Powell leans toward weaker payrolls or stable slack indicators when signaling the potential for rate cuts.
Deutsche Bank predicts he will remain open to easing in the near term but stop short of committing to a September move, with a 50 basis point cut seen as unlikely to gain committee support.
Powell may also address the Fed’s policy framework, with analysts expecting him to propose rolling back 2020 changes and restoring a primary role for preemption in inflation and labor market policy.
Investors will have to wait until Powell speaks on Friday for clarity. In the meantime, they will get another look at the Fed’s thinking when the minutes from the July meeting are released on Wednesday afternoon.
12:22pm: Tech buying opportunity?
Wedbush analysts argued that sell-offs such as Wednesday’s should be seen as opportunities to own “the core winners” in AI.
“Skeptics of the tech rally will be proven wrong (again) as AI use cases multiply,” the firm wrote, emphasizing that the current cycle is fueled by “the biggest transformational tech spending cycle in the last 40 years.”
The analysts pointed to Nvidia’s central role in the AI ecosystem ahead of its August 27 earnings report, noting that demand for its chips still outpaces supply by a ratio of 10 to 1.
“There is one chip in the world fueling the AI Revolution and that is Nvidia,” Wedbush wrote, adding that recent developments around partial reopening of US chip exports to China could be “very bullish” for Nvidia and AMD.
11:25am: Valution concerns prompt AI selloff
Artificial intelligence stocks, including Palantir, Nvidia and Advanced Micro Devices, traded lower on Wednesday amid a broader tech-sector selloff, highlighting growing investor caution after an extended run-up in valuations.
Palantir led the declines, tumbling 7.5% in early trading, after a 9% drop on Tuesday, to trade hands at about $145.
The reversal was attributed to profit taking, concerns about stretched valuations, and shifting investor sentiment toward defense-linked AI companies.
Easing US-China tensions and progress in talks to resolve the Russia-Ukraine conflict have tempered enthusiasm for Palantir’s defense-heavy business model.
Sentiment was further pressured by a Citron Research report arguing Palantir is overvalued given its reliance on long-term government contracts versus more scalable AI subscription models.
Meanwhile, Nvidia was down 3.1% at $170 while Advanced Micro Devices was down 3.9% at $160.
9:55am: Tech stocks extend losses
US stocks started Wednesday with more selling.
The S&P 500 dropped almost 0.6% and the Nasdaq Composite is down 1.2%, with the Dow Jones just below flat.
Nvidia was down almost 2%, while Apple, Alphabet, Amazon, Meta, Broadcom and Tesla all fell at least 1%.
The biggest fallers on the S&P are Target and Intel, down 8.6% and 6.6% respectively, while Palantir dropped another 5% to extends its losses over the past week to around 20%.
7.40am: Modest stock falls expected
Wall Street's major stock indexes are expected to extend losses on Wednesday morning, with worries about the durability of the AI spending boom.
Stock futures were pointing to modest declines following Tuesday’s tech-led sell-off.
Dow Jones and S&P 500 futures were down 0.1%, while those for the tech-heavy Nasdaq 100 dipped 0.2%.
The Nasdaq led yesterday’s pullback, with the wider Composite index shedding 1.5%, as names like Palantir dropped more than 9%, while Nvidia and ARM also retreated.
Pressure was sparked by growing concern over AI overvaluations, amplified by comments from OpenAI CEO Sam Altman, who warned investors may be getting “over-excited,” and a fresh report from MIT that found that 95% of corporate generative AI pilots fail to scale, feeding investor anxiety over near-term returns in the sector.
Market analyst Danni Hewson at AJ Bell said this “looks like a mild and possibly necessary correction after an extremely strong run,” while traders now turn their attention to upcoming Nvidia earnings next week and Fed commentary for direction.
Later today, the minutes from the Federal Reserve’s July meeting are due, with added anticipation following the first dual dissent at a policy meeting since 1993.
Analyst David Morrison at Trade Nation said markets are most focused on what Fed Chair Powell says in his Jackson Hole speech on Friday, with a rate cut in September already 85% priced in.
Retail earnings are in focus this week, with updates from Lowe’s, Target, and TJX following a solid showing from Home Depot on Tuesday and ahead of numbers from Walmart tomorrow.
Crude oil prices were firmer in early trade, with front-month WTI trading back around Friday’s close, just under $63 a barrel.
Crude prices fell at the beginning of this week after President Donald Trump and Ukrainian counterpart Volodymyr Zelenskyy appeared to have positive conversations over ending the war between Russia and Ukraine.
"But the situation is far more complicated, and President Trump has already suggested that Mr Putin may be in no mood to compromise in any future peace talks," said Morrison.
"In other words, it’s unlikely that the war will be over anytime soon."
Trump's proposal to bring Zelenskyy and Vladimir Putin together for head-to-head discussions as has not been confirmed by Moscow.
"Whether this proves to be a base from which crude can rally, or if this is simply a pause before prices continue lower, looks likely to depend on any data that can throw some light on the outlook for global demand and supply," Morrison added.
"Many oil analysts are forecasting that supply will outstrip demand growth for the rest of this year, and into 2026."
Gold made back some of yesterday’s losses, holding $3,331, while the dollar index was flat at just over 98 points as it has been for most of the month.