Big Tech stocks drag Wall Street down again

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NEW YORK (AP) — Wall Street is sinking again on worries that a too-warm economy will push the Federal Reserve to keep interest rates higher for longer. The S&P 500 fell 0.7% early Thursday, on track for a third straight loss. Big Tech stocks were particularly weak, and the Nasdaq composite was down 1.5%. The Dow was holding up better than the rest of the market, rising 0.2%, because it has less of an emphasis on tech. Stocks were feeling pressure from the bond market, where yields rose a day before due to a report showing growth for services industries accelerated more than economists expected last month.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Wall Street is pointing toward a third straight day of losses and global markets are falling as well with more signs of an economic slowdown in China despite efforts by Beijing to turn it around.

Futures for the S&P 500 slipped 0.4%, while the Dow Jones Industrial Average lost 0.1%. Nasdaq futures are off 0.8%.

China said its exports fell 8.8% in August from a year earlier — a fourth straight monthly decline — while imports were down 7.3%. The declines were smaller than the double-digit drops in July, however, and were better than most forecasts.

On Thursday, the U.S. releases data on weekly jobs numbers and an update on mortgage rates arrives midday.

Toro, the lawnmower and snowblower maker, reports its latest financial results before the bell, while electronic signature company DocuSign reports after the bell.

ChargePoint Holdings, the electric vehicle charging network, fell nearly 11% in premarket after it posted nearly double the loss Wall Street had projected.

Artificial intelligence software company C3.ai fell 10% after it missed revenue targets and offered up a weak forecast.

Video game retailer GameStop rose about 3.5% early after it beat sales targets and posted a much smaller loss than analysts were expecting.

Lingering in the background are inflation and interest rates, which the Fed has boosted in an effort to bring down prices. Investors have been hoping that the Fed might moderate interest rate increases going forward with inflation trending downward for months.

The Institute for Supply Management’s latest survey Wednesday showed that the sector, which employs most Americans, grew at a faster pace than economists expected in August. It has remained resilient throughout 2023 despite persistent inflation and rising interest rates squeezing consumers.

“Paradoxically, however, what’s good news for the economy is bad news for markets,” Stephen Innes of SPI Asset Management said in a commentary. “Currently, we are seeing the downside risk associated with positive growth news, especially when paired with investors fretting about the possible persistent inflationary impacts of higher oil prices.”

Wall Street expects the Fed to hold its benchmark interest rate steady at its next meeting later in September. Investors are mostly betting that the central bank will maintain that pause through the rest of the year. Economic updates last week on consumer confidence, jobs and inflation had reinforced those hopes.

Inflation has been easing for months under the weight of the Fed’s aggressive rate hikes that started in 2022 and brought its main interest rate to the highest level since 2001. The policy raised concerns that the central bank might be too aggressive and hit the brakes on economic growth with enough force that the economy would be thrown into a recession.

A strong jobs market and consumer spending have propped up the broader economy and staved off a recession, so far. Wall Street will get several more economic updates on inflation and retail sales later in September ahead of the Fed’s next meeting.

In Europe at midday, Germany’s DAX lost 0.2%, the FTSE 100 dipped 0.5% and the CAC 40 in Paris inched 0.1% higher.

Hong Kong’s Hang Seng, which has yoyoed this week on news about possible policy changes for China’s troubled property sector, declined on selling of tech shares. It fell 1.3% to 18,202.07.

The Shanghai Composite index lost 1.1% to 3,122.35, while Tokyo’s Nikkei 225 shed 0.8% to 32,991.08.

In Seoul, the Kospi sank 0.6% to 2,548.26. Australia’s S&P/ASX 200 was off 1.2% at 7,171.00.

Shares in most other regional markets fell.

In other trading Thursday, U.S. benchmark crude oil fell 47 cents to $87.07 a barrel in electronic trading on the New York Mercantile Exchange. It gained 85 cents on Wednesday.

Brent crude, the pricing basis for international trading, was down 40 cents to $90.20 a barrel.

The U.S. dollar fell to 147.35 from 147.66 Japanese yen late Wednesday. The euro edged down to $1.0703 from $1.0725.

Treasury yields inched back down after climbing a day earlier.

On Wednesday, the S&P 500 dropped 0.7% and the Dow industrials shed 0.6%. The Nasdaq gave back 1.1%.

Big technology stocks were among the biggest drags on the market, with Apple and Nvidia each losing more than 3%.

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