US Stocks - Profit-Taking Continues as High-Flying Tech Shares Remain Under Pressure

US Stocks - Profit-Taking Continues as High-Flying Tech Shares Remain Under Pressure

Technology once again dragged indexes lower with a drop of 4.59%, the third straight decline and worst three-day performance for the sector since mid-March.

Still, market participants said they did not expect a prolonged sell-off against the backdrop of an accommodative monetary policy by the Federal Reserve, which last week indicated a higher toleration for inflation rising above 2pc.

"To the extent that "buy the dip" mentality persists, this market may possess a somewhat more stubborn bullish streak", said Mizuho Bank.

Still, some believe more volatility is in store.

The Nasdaq plunged in early trading. The DAX in Frankfurt advanced less than 0.1% to 13,249.15.

The Dow Jones Industrial Average lost 632.42 points, or 2.2%, to 27,500.89. The wider banks index lost 3.44 percent, also tracking Treasury yields. Tokyo, Shanghai, Singapore, Sydney and Taipei rose around 0.5 percent while Hong Kong was up slightly less.

Wall Street analysts and investors widely expected Tesla to join the S&P 500 after the company posted its fourth consecutive profitable quarter in July, clearing a major hurdle for its potential inclusion in the benchmark stock index. India's Sensex added 1.3% to 38,676.69.

Global markets have recovered most of this year's losses, but that was based largely on strong gains for tech stocks while other companies are lower.

Stock futures were little changed Wednesday evening, as investors assessed the regular-session rally and an at least temporary resurgence in technology shares. However, he did warn that virus concerns continue to play in the background as governments try to balance rebooting their economies against fuelling fresh waves of the disease, particularly with the northern hemisphere winter approaching.

Mairead McGuinness named as Ireland's new European Commissioner
He also paid tribute to Ms McGuinness saying: "Mairead is an excellent MEP and I have always supported her in the role". She will instead take responsibility for the Financial Services and Financial Stability and Capital Markets post.

On Wednesday, Apple, Amazon and other US tech companies that had lost momentum late last week all regained some ground.

Meanwhile, the tech-heavy Nasdaq plunged over 4 percent.

"Much like there was no real reason for the drop the past three days, there was no main driver for today's huge rally, other than stocks were quite oversold", Burt White, chief investment officer for LPL Financial, said in an email Wednesday.

That comes amid stalled congressional negotiations over additional economic measures for the coronavirus pandemic.

A Senate vote this week on a trimmed-down relief package proposed by Republicans has only a slim chance of passage as Democrats insist on more sweeping aid.

The front facade of the New York Stock Exchange is seen in New York City, New York, U.S., June 26, 2020. The contract rose $1.29 on Wednesday to settle at $38.05.

Brent crude fell 0.63 percent to $39.53 a barrel, while U.S. crude lost 0.73 percent to trade at $36.49. It added $1.01 the previous session to $40.79.

The Japanese yen weakened 0.1% to 106.18 per dollar. The euro gained to $1.1825 from $1.1823.

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