Nasdaq Plunges 1.33% to 26,289.71 as Chipmakers Crash and 30-Year Treasury Yield Hits 19-Year High

Mumbai, Aug 19: US stock markets closed sharply lower on Tuesday, with the technology-heavy Nasdaq Composite leading the declines as a brutal sell-off in semiconductor stocks and surging long-term government bond yields rattled investor confidence. The Nasdaq Composite dropped 355.20 points, or 1.33%, to settle at 26,289.71, marking its worst session in over two weeks.  

The broader S&P 500 fell 53.30 points, or 0.69%, closing at 7,691.76, while the Dow Jones Industrial Average showed relative resilience, declining just 116.38 points, or 0.22%, to end the session at 53,343.40. The primary catalysts driving the market lower were escalating geopolitical tensions in the Middle East that pushed oil prices to three-week highs, and a global bond rout that sent the 30-year Treasury yield to 5.323%, its highest level since 2007, intensifying concerns over borrowing costs and persistent inflation. 

Dow Jones Sheds 116 Points as Caterpillar Plunges 4.39% While Healthcare Stocks Surge 

The Dow Jones Industrial Average opened at 53,354.43 and traded within a daily range of 53,256.34 to 53,478.76, before closing at 53,343.40. The index’s decline was relatively contained compared to its peers, as gains in healthcare and energy stocks partially offset weakness in industrials and technology.  

Caterpillar (CAT) emerged as the worst performer on the Dow, plunging 4.39%, as the industrial giant faced selling pressure amid concerns about rising input costs and a potential slowdown in global infrastructure spending. Boeing (BA) fell 1.31%, extending its recent losses following the US Army’s temporary grounding of Apache helicopter flights after a fatal crash, while Goldman Sachs (GS) declined 1.20%, weighing on the financial component of the index. 

On the positive side, Johnson & Johnson (JNJ) surged 3.38%, leading the gainers as healthcare stocks benefited from defensive positioning amid market volatility. Chevron (CVX) advanced 1.55%, reflecting the positive impact of higher crude oil prices on energy companies, while IBM (IBM) gained 1.62% and Visa (V) rose 1.61%. Apple (AAPL) bucked the broader tech weakness, climbing 1.45%. The Dow’s mixed performance highlighted the rotation away from cyclicals and into defensives and energy names, with six of the 30 components closing in positive territory. 

S&P 500 Falls 0.69% to 7,691.76 as Technology and Industrials Lead Broad-Based Decline 

The S&P 500 opened at 7,700.04 and traded between an intraday high of 7,713.95 and a low of 7,688.63, before closing at 7,691.76. The benchmark index’s decline was broad-based, with eight of the 11 sectors closing in negative territory.  

The Information Technology sector was the worst performer, plummeting over 2% as rising bond yields weighed on high-valuation growth stocks. The Industrials sector also faced significant pressure, falling 1.2%, while Materials and Communication Services declined 0.4% and 0.3%, respectively. 

Within the S&P 500, Coherent (COHR) was the worst-performing stock, sinking over 12%, followed by Ciena (CIEN) and Teradyne (TER), which both dropped more than 10%. The energy sector was the sole bright spot, with the Energy Select Sector SPDR Fund (XLE) advancing as oil prices climbed.  

The healthcare sector also showed resilience, hitting a record high during the session as investors sought safety in defensive names. The S&P 500 has now retreated nearly 1.5% since closing at an all-time high just below 7,800 last Thursday, with declining issues outnumbering advancers by a 1.74-to-1 ratio on the NYSE. 

Nasdaq Composite Crashes 1.33% to 26,289.71 as PHLX Semiconductor Index Plunges 4.98% 

The Nasdaq Composite bore the brunt of Tuesday’s selling, opening at 26,346.88 and falling to an intraday low of 26,266.68 before closing at 26,289.71. The index’s decline was driven by a brutal sell-off in semiconductor stocks, with the PHLX Semiconductor Index (SOX) plunging 628.54 points, or 4.98%, to close at 11,992.46. The SOX was on track for its worst day since July 1, with all 30 components closing lower for the first time since July 29. 

Semiconductor heavyweights were decimated. Micron Technology (MU) tumbled 6.93%, Intel (INTC) plunged 6.66%, and Advanced Micro Devices (AMD) sank 4.39%. Sandisk (SNDK) cratered 9.33%, while Western Digital (WDC) dropped 7.45% and Seagate Technology (STX) fell 9.07%. Nvidia (NVDA) fell 2.42%, Broadcom (AVGO) declined 3.43%, and Applied Materials (AMAT) sank 4.16%. The selling was not limited to chips; other technology giants also suffered. Meta Platforms (META) tumbled 4.45%, while Tesla (TSLA) fell 0.83% and Amazon (AMZN) declined 0.79%. 

However, some technology names bucked the trend. Intuit (INTU) surged 4.41%, Adobe (ADBE) gained 3.57%, and Netflix (NFLX) rose 2.28%. Apple (AAPL) added 1.48%, and Microsoft (MSFT) edged up 0.19%. The sharp divergence within the tech sector underscored the rotation away from AI and semiconductor names into more defensive software and consumer-focused technology stocks, as investors repositioned amid rising borrowing costs. 

Also Read: How to Invest in the US Stocks From India

Russell 2000 Falls 1.16% to 3,022.19 as Small Caps Retreat from Near-Record Highs 

The Russell 2000 Index, which tracks small-cap stocks, declined 35.35 points, or 1.16%, to close at 3,022.19. The index opened at 3,049.32 and traded within a range of 3,019.39 to 3,049.32. The decline came as small caps retreated from near-record highs, with the index sitting just 12 points below its all-time high of 3,069.71 reached on Friday. The selling was broad-based, with technology and industrial names leading the declines. 

Within the Russell 2000, Credo Technology (CRDO) was the worst performer, plunging 13.22%, followed by MXL which dropped 14.20%, and AAOI which fell 14.78%. Fabrinet (FN) also tumbled 20% after the company’s fiscal first-quarter profit forecast came up short of estimates. On the positive side, Amylyx Pharmaceuticals (AMLX) skyrocketed over 60% after announcing positive late-stage trial results for its GLP-1 receptor antagonist avexitide, which reduced hypoglycemia events by 55%. The sharp decline in small caps reflected broader risk-off sentiment, as investors rotated out of riskier assets amid rising geopolitical and inflationary concerns. 

S&P 100 Dips 0.59% as Mega-Cap Tech Names Weigh on the Index 

The S&P 100 Index, which comprises 100 leading US stocks, declined 0.59% on Tuesday, closing at 3,789.25. The index opened at 3,783.23 and traded between a high of 3,795.53 and a low of 3,780.93. The index’s performance was dragged down by weakness in mega-cap technology names, including Meta Platforms, which fell 4.45%, Nvidia, which declined 2.42%, and Amazon, which dropped 0.79%. The decline in the S&P 100 mirrored the broader market weakness, though the index’s losses were less severe than the Nasdaq Composite, reflecting the presence of more defensive and value-oriented names in the index. 

Dow Transports Plunge 1.60% as Utilities Edge Higher in Defensive Rotation 

The Dow Jones Transportation Average was the worst performer among the Dow averages, plunging 349.20 points, or 1.60%, to settle at 21,495.23. The index opened at 21,856.62 and traded within a range of 21,489.23 to 21,879.55. The sharp decline in transports reflected concerns about rising fuel costs and a potential slowdown in economic activity, as higher oil prices weighed on airlines, railroads, and trucking companies. 

The Dow Jones Utility Average showed resilience, edging up 0.09 points, or 0.0081%, to close at 1,108.81. The index opened at 1,115.32 and traded between a high of 1,122.13 and a low of 1,107.15. Utilities outperformed as investors sought safety in defensive, dividend-paying stocks amid market volatility. The Dow Jones Composite Average declined 90.87 points, or 0.53%, to close at 16,895.04. The mixed performance across the Dow averages highlighted the rotation away from cyclicals and into defensives. 

PHLX Semiconductor Index Plunges 4.98% to 11,992.46 as AI Chip Stocks Bear Brunt of Selling 

The Philadelphia Semiconductor Index (SOX) was the hardest-hit major index on Tuesday, plunging 628.54 points, or 4.98%, to close at 11,992.46. The index opened at 12,166.12 and traded within a range of 11,828.46 to 12,228.06. The sell-off was broad-based, with all 30 components of the index closing lower for the first time since July 29. 

The decline was driven by a combination of factors, including rising bond yields, which reduced the present value of future earnings for high-growth tech companies, and profit-taking after a strong rally in semiconductor stocks. The iShares Semiconductor ETF (SOXX) fell more than 5%, breaking below its 38.2% Fibonacci retracement level near $538. Micron Technology (MU) plunged over 7%, Intel (INTC) shed 6.66%, and Advanced Micro Devices (AMD) fell 4.39%. Sandisk (SNDK) cratered 9.33%, while Western Digital (WDC) dropped 7.45%. Nvidia (NVDA) fell 2.42%, Broadcom (AVGO) declined 3.43%, and Marvell Technology (MRVL) plunged 8.09%. The SOX has now more than doubled off its 52-week low of 5,480.05, making it vulnerable to further profit-taking. 

NYSE Composite Drops 0.31% to 24,641.39 as Market Breadth Remains Weak 

The NYSE Composite Index declined 76.42 points, or 0.31%, to close at 24,641.39. The index opened at 24,717.81 and traded within a range of 24,641.39 to 24,752.03. Declining issues outnumbered advancers by a 1.74-to-1 ratio on the NYSE, reflecting broad-based weakness across the exchange. The NYSE Composite’s decline was less severe than the Nasdaq’s, as energy and healthcare stocks provided some support. The index recorded 10 new 52-week highs and four new lows, indicating that while overall sentiment was negative, some sectors continued to show strength. 

S&P MidCap 400 Falls 1.54% as SmallCap 600 Drops 1.47% in Broad-Based Sell-Off 

The S&P MidCap 400 Index fell 60.33 points, or 1.54%, to close at 3,856.78. The index opened at 3,917.11 and traded within a range of 3,855.60 to 3,917.11. The S&P SmallCap 600 Index declined 26.72 points, or 1.47%, to settle at 1,793.53. The index opened at 1,816.37 and traded within a range of 1,793.40 to 1,816.37. The underperformance of mid and small caps relative to large caps reflected the broader risk-off sentiment, as investors rotated out of riskier assets amid rising geopolitical and inflationary concerns. The declines in both indices were broad-based, with technology and industrial names leading the selling. 

Also Read: How to Invest in S&P 500 Stocks Through Index Funds 

VIX Surges 5.6% to 16.04 as Market Volatility Spikes to Over One-Week High 

The CBOE Volatility Index (VIX), often referred to as the “fear gauge,” surged 0.85 points, or 5.6%, to close at 16.04, its highest level in over a week. The spike in the VIX reflected the sharp increase in market uncertainty driven by escalating geopolitical tensions in the Middle East, surging oil prices, and a global bond rout that sent long-term Treasury yields to multi-year highs. The VIX’s rise indicated that investors were pricing in higher levels of risk and volatility in the near term, as concerns over inflation, borrowing costs, and geopolitical instability weighed on sentiment. 

Energy Sector Gains 0.9% as Technology Sector Plunges 2% in Sector Rotation 

The Energy sector was the only S&P 500 sector to close higher, advancing 0.9% as oil prices climbed to their highest level in more than three weeks. The sector benefited from rising crude prices amid escalating geopolitical tensions in the Middle East and fading hopes for a US-Iran peace deal. ExxonMobil rose more than 2%, while Chevron gained 1.55%. Refiners also reached record levels, with Valero trading at an all-time high and Marathon Petroleum at its highest level since 2011. 

Information Technology was the worst-performing sector, plunging more than 2% as rising bond yields pressured high-valuation growth stocks. Semiconductor shares led the decline, with Nvidia falling 2.42%, Broadcom dropping 3.43%, and Intel plunging 6.66%. Concerns over the sustainability of AI-related spending and higher borrowing costs further weighed on technology valuations. 

Industrials fell 1.2%, dragged down by Caterpillar and Boeing, while Materials declined 0.4% and Communication Services slipped 0.3%. Healthcare reached a record high during the session, while Consumer Staples, Real Estate and Utilities also outperformed as investors favoured defensive and dividend- 

Amylyx Pharmaceuticals Soars 60% as Fabrinet and Credo Technology Plunge Over 20% 

Amylyx Pharmaceuticals soared more than 60% in heavy volume after reporting positive late-stage trial results for its GLP-1 receptor antagonist avexitide, which reduced hypoglycemia events by 55% in patients who had undergone gastric bypass surgery. Intuit gained 4.41%, while Adobe rose 3.57%, as investors rotated towards software stocks. Netflix advanced 2.28%, and Johnson & Johnson climbed 3.38%. 

Fabrinet plunged more than 20% after its fiscal first-quarter profit forecast fell short of estimates. Credo Technology dropped 13.22% amid a broader sell-off in chip stocks, while Sandisk declined 9.33% following its sharp gain on Monday. Micron Technology fell 6.93%, threatening its five-day winning streak, while Intel shed 6.66%, extending its recent losses. 

Semiconductor and AI Stocks Plunge as Financials and Energy Show Divergent Performance 

Semiconductor stocks were the weakest performers, with the PHLX Semiconductor Index plunging 4.98% amid rising bond yields, profit-taking and concerns over the sustainability of AI-related demand. Micron Technology fell more than 7%, Intel declined 6.66%, Advanced Micro Devices dropped 4.39%, while Sandisk and Western Digital fell 9.33% and 7.45%, respectively. The Roundhill Memory ETF also declined nearly 9%. 

Financial stocks delivered mixed results, with JPMorgan Chase rising 0.70%, Visa gaining 1.61% and Mastercard advancing 2.29%, while Goldman Sachs fell 1.20%. Energy stocks outperformed, with the Energy Select Sector SPDR Fund gaining 0.9%. ExxonMobil rose more than 2% and Chevron advanced 1.55%, supported by higher oil prices and disruptions to refinery capacity. 

AI and growth stocks also weakened as higher bond yields pressured valuations. Nvidia fell 2.42%, Meta Platforms dropped 4.45% and Amazon declined 0.78%. Neocloud stocks faced steeper losses, with CoreWeave falling 11%, Nebius declining 8% and TeraWulf plunging 12% amid concerns over AI spending. 

30-Year Treasury Yield Hits 19-Year High as Fed Minutes Await 

Investors focused on the Federal Reserve’s July meeting minutes, due on Wednesday, for clues on policymakers’ economic assessment and interest-rate outlook. Market pricing indicated a 65.4% probability of the Fed holding rates steady in September, while the probability of a December rate hike stood at 67%. Former St. Louis Fed President Jim Bullard said it would be a good time for the Fed to raise rates to bring inflation below 2%. 

The bond market was a key driver of Tuesday’s stock-market decline. The 30-year Treasury yield climbed to 5.323%, its highest since 2007, while the 10-year yield rose to 4.744%, its highest since January 2025. The 2-year yield increased to 4.198%. Rising oil prices and a global bond sell-off pushed long-term yields higher, weighing on technology and growth stocks as higher discount rates reduced the value of future earnings. 

Also Read : US Stock Market Timings 

Oil Hits Three-Week High as Gold Slides on Surging Bond Yields 

Crude oil prices climbed to their highest level in more than three weeks as Middle East tensions escalated. Brent crude rose 0.17% to $91.02 a barrel, while WTI gained 0.52% to $84.94, with both settling at their highest levels since July 24. Gains followed fading hopes of a US-Iran peace deal and concerns over disruptions around the Strait of Hormuz.  

Gold prices declined 1.5% to $4,410 an ounce as rising Treasury yields and a stronger dollar reduced demand for the non-interest-bearing metal. Spot gold fell 1% to $4,369.82. Silver also declined, while copper fell on concerns over global growth. Natural gas prices dropped as milder weather forecasts reduced demand expectations.  

In currency markets, the US Dollar Index was little changed at 99.63. EUR/USD traded near 1.12, USD/JPY around 145 and GBP/USD near 1.30, reflecting mixed bond-market signals and geopolitical uncertainty. 

Housing Starts Miss Estimates as Building Permits Beat Expectations 

US housing starts fell more than expected in July to a seasonally adjusted annual rate of 1.239 million, down from 1.427 million in June and below economists’ estimate of 1.345 million. Higher mortgage rates, which reached their highest level of the year, and elevated home prices weighed on construction activity.  

Pending home sales also declined 2.3% month-on-month and 2.2% year-on-year. In contrast, building permits rose to 1.443 million from 1.367 million in June, surpassing the 1.37 million estimate. The mixed data highlighted continued housing-market challenges, with high borrowing costs and affordability constraints weighing on demand despite stronger future construction approvals. 

Rising Treasury yields and Middle East tensions are creating headwinds for US equities, particularly technology and growth stocks. Semiconductor weakness highlights risks to AI-related names. Investors should monitor Federal Reserve signals, economic data and geopolitical developments, especially around the Strait of Hormuz. 

Source 

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