Indexes Slide as Tech Stocks Tumble

Tech stocks experienced a decline on Wednesday, causing a mixed performance on Wall Street and reducing the momentum of its recent five-week rally. The S&P 500 closed 0.5% lower, falling 23.02 points to 4,365.69. This marked its third consecutive pullback after reaching its highest level in over a year last week. The Nasdaq composite fell by 1.2%, outpacing the rest of the market. However, the Dow, which has less exposure to tech stocks, experienced a lesser decline. It lost 102 points, or 0.3%, closing at 33,951.52.

According to the AP, Fed Chair Jerome Powell mentioned on Wednesday that “the process of getting inflation back down to 2% has a long way to go.” He reiterated that there might be a couple more rate increases, but the speed of these hikes is likely to slow down after the rapid pace observed since early last year. In his testimony before a House committee, Powell compared it to slowing down from 75 miles per hour on a highway to 50 and then proceeding even more gradually as the destination nears.

Interest rate rises tend to have a significant impact on high-growth stocks, and many Big Tech stocks suffered as a result. Nvidia, which had experienced remarkable gains earlier this year due to Wall Street’s enthusiasm for the artificial intelligence industry, fell by 1.7% as it gave back some of its gains. Nevertheless, the chip maker is still up nearly 200% for the year so far, with expectations of substantial revenue growth from AI. Tesla dropped by 5.5%, while Microsoft lost 1.3%. FedEx also fell by 2.5% after its upcoming earnings forecast fell short of analysts’ expectations. On a positive note, Dollar Tree rose by 4.6% as it maintained its earnings forecast for this fiscal year.

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