NEW YORK (AP) — Stocks fell on Wall Street on Wednesday as weakness in technology companies continued to drag down the market.
The S&P 500 was down 0.5% in afternoon trade. The tech-heavy Nasdaq gave up 1.1 percent and the Dow Jones Industrial Average fell 178 points, or 0.5 percent, as of 2:43 p.m. ET.
Palo Alto Networks was a big loser and a particularly heavy weight in the technology sector. The network security company sank 27.2% after it gave forecasts for future payments that were well below analysts’ expectations. Its rival Fortinet fell 4.6%.
Amazon rose 0.1% after announcing it would be added to the Dow. Walgreens Boots Alliance, which is leaving the Dow, fell 3.3%
Bond yields remained relatively stable. The yield on the 10-year Treasury note rose to 4.32 percent from 4.28 percent late Tuesday.
Markets were mostly higher in Europe and mixed in Asia.
Profits remain the big focus for Wall Street. Nvidia will report its highly anticipated results later in the day. The chip maker has tripled in size over the past year thanks to a surge in investor enthusiasm for artificial intelligence.
Tech stocks led much of the market’s rally, which took it to new highs just last week. The sector is also showing some of the strongest revenue growth. But the lopsided contributions of some of the sector’s bigger companies have raised questions about whether gains have been overstated.
“In February, we’re seeing some of that settle down as we try to get a better forecast of how the full year is going to play out,” said Rob Howarth, senior portfolio manager at US Bank Wealth Management.
Several other companies made big moves following the release of their financial results. Electronic measurement technology company Keysight Technologies fell 7.3% after its profit forecast missed analysts’ expectations. Garmin, which makes personal navigation devices, jumped 10% after beating profit estimates.
Toll Brothers rose 4.1% after giving investors an encouraging financial update as it sees strong demand. That helped support gains in the housing sector.
Energy companies gained ground after natural gas prices jumped 9%. Exxon Mobil rose 1.9%.
The Federal Reserve publishes minutes since its last meeting in January, which showed most officials were wary of moving too quickly to cut their benchmark. The central bank left interest rates alone for the fourth time in a row at this meeting. Investors have all but given up hope that the central bank will cut rates at its March meeting and expect the first rate cut to come in June.
Investors should wait until next week for other key inflation data. That’s when the government will release its monthly report on personal consumption and spending, the Fed’s preferred measure of inflation. The central bank’s aim is to tame inflation back to 2% and analysts expect this report to show it cooled to 2.3% in January. Inflation by this indicator peaked at 7.1% in June 2022.
“As long as the labor market holds up, the Fed can afford to hold off on gradual rate cuts,” said Jamie Cox, managing partner at Harris Financial Group. “Fighting inflation is much easier when the labor market cooperates.”
Separate measures for consumer and wholesale prices in January show that inflation has not cooled as much as expected. This prompted investors to shift their expectations for a rate cut from March to June. Poor report on retail sales added to disappointing inflation data and raised concerns that stubborn inflation is causing more pain for consumers. Tighter consumer spending could put more pressure on businesses in 2024.
