Tech Stocks In Focus As Nasdaq Bounces From Lows: Markets Wrap

Technology stocks dropped Wednesday with the Nasdaq 100 index declining for a second consecutive day Wednesday. A gauge of the so-called ‘Magnificent Seven’ large cap tech firms fell for a fourth consecutive day, the longest losing streak since mid April.

US stocks are “in the early days” of a bubble, although the critical point for a correction has yet to come, Oaktree Capital Management LP co-founder Howard Marks cautioned. 

Declines for US megacaps dragged down the S&P 500 for a fourth straight session Wednesday, despite a bounce off session lows. While most major groups in the US equity benchmark finished higher, some strategists warned that the extra-heavy weighting of tech giants may turn the “rotation” out of the sector into a broader rout.

“Rotation can only take place if the tech stocks hold up,” said Matt Maley at Miller Tabak. “If they decline, the only rotation we’ll see will be into cash.”

Meanwhile, minutes of the Federal Open Market Committee’s July 29-30 meeting showed most Fed officials highlighted inflation risks as outweighing concerns over the labor market at their meeting last month, as tariffs fueled a growing divide within the central bank’s rate-setting committee.