- After gaining as much as 1.5%, the S&P 500 Index turned negative Wednesday morning.
- The technology-heavy Nasdaq Composite Index plunged 2.1%.
- FAANG stocks are down across the board.
U.S. stocks turned negative Wednesday morning, weighed down by plunging technology shares and negative virus headlines.
S&P 500, Nasdaq Decline; Dow Holds Gains
The large-cap S&P 500 Index reached an intraday high of 3,021.72 before pulling back sharply mid-morning. It bottomed at 2,969.75 for a decline of 1.7% from its intraday peak.
The S&P 500 Index suffered a sharp pullback Wednesday morning but has since pared most of its losses. | Chart: Yahoo Finance
Losses are concentrated in five of 11 primary sectors, with information technology leading the declines. Health care, communication services, and discretionary shares also fell sharply.
The technology-focused Nasdaq Composite Index declined by as much as 2.1% before paring losses. It was last down 1.6%.
Surging bank shares helped the Dow Jones Industrial Average buck the downtrend. The industrials benchmark rallied by as much as 360 points.
Tech Stocks Lead Declines
The S&P 500 and Nasdaq are being weighed down by volatile technology shares, with all five FAANG constituents reporting declines.
As CNBC reports, shares of Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX), and Google-parent Alphabet (NASDAQ:GOOGL) are all down at least 0.5%.
The S&P 500 briefly eclipsed 3,000 on Wednesday, a significant psychological and technical milestone for investors. The 3,000 level represents the index’s average price over the past 200 days.
Stocks have rebounded more than 30% from their March lows, but not everyone believes the rally can last. Analysts at JPMorgan have warned investors to brace for a significant pullback heading into the summer due to the lingering effect of government lockdown orders.
Although the U.S. economy is entering a recession, some analysts believe a “depression” is less likely:
The U.S. economy showed tentative signs of recovery midway through the second quarter, but surging unemployment claims suggest a deep recession is all but inevitable.
On Thursday, the Department of Labor is expected to show another 2.1 million jobless claims for the week ending May 23, bringing the ten-week total to over 40 million.
This article was edited by Josiah Wilmoth.
Last modified: May 27, 2020 3:31 PM UTC