Stocks fall to session lows as comeback rally falters, Dow lower by 200 points

Hakyung Kim, CNBC and Brian Evans, CNBC and Rob Wile
Michael M. Santiago

Stocks slipped into the red, losing gains from earlier in the session as the market failed to continue recouping its losses from Monday’s sell-off.

The Dow Jones Industrial Average fell 194 points, or 0.5%. The S&P 500 declined 0.5%, while the Nasdaq Composite dropped 0.7%.

Nvidia pulled back around 3% and shares of Super Micro Computer tumbled 18.5% after the server company’s fiscal fourth-quarter earnings missed analyst estimates. Airbnb slipped nearly 15% after issuing disappointing second-quarter results. Meanwhile, Apple climbed 1.5%..

The benchmark 10-year Treasury yield continued its climb and rose 5 basis points to 3.94%. This marked a return to its level prior to the weak jobs numbers on Friday that raised concerns of an economic downturn.

The Cboe Volatility Index, known as Wall Street’s “fear gauge,” was last trading at 28.3 after falling to as low as 22 earlier on Wednesday. The sharp decline from near 65 on Monday indicates investors’ fears are abating, but still remain elevated from their initial levels at the start of the month.

“There’s been some reassurance over the last couple days that things have calmed down a bit. But there are still quite a few unknowns on the horizon, such as how much more unwind there is on the yen carry trade, as well as geopolitical headwinds,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.

On Tuesday, the S&P 500 and the Nasdaq each advanced 1%, while the 30-stock Dow added nearly 300 points on Tuesday. On Monday, the Dow and the broad-market S&P 500 posted their worst session since 2022, fueled by recession worries and the unwinding of the yen carry trade.

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