Key Takeaways:
Semiconductor shares dragged the Nasdaq to a seventh straight session of declines, the tech sector's longest losing streak since 2022, as falling Treasury yields failed to offset the selloff.
The Nasdaq Composite fell 0.77% to 25,980.19 on Aug. 24, while the S&P 500 slipped 0.28% to 7,652.86 and the Dow Jones Industrial Average rose 0.26% to 53,417.16. Nvidia dropped 2.91%, extending its slide to seven consecutive sessions — the longest since September 2022 — after reports the company plans to raise AI-related memory prices by more than 15% for some major customers.
"The Treasury's attempt to suppress long-term rates by issuing more short-term debt will tie the U.S. government's interest costs more closely to Federal Reserve policy rate movements," said Peter Boockvar, chief investment officer at One Point BFG Wealth Partners. "It has become a new variable that will need to be dealt with going forward."
Semiconductor weakness spread across the sector. Micron Technology fell 5.83%, AMD dropped 3.49%, and Broadcom lost 2.63%, while the iShares Semiconductor ETF (SOXX) declined 2.7%. Storage and optical names led losses, with SanDisk down 6.45%, Seagate Technology off 6.51%, and Coherent and Lumentum each falling more than 4%. Financial stocks including JPMorgan Chase and Visa rose, supporting the Dow.
Long-term Treasury yields fell after a CNBC report that the Treasury Department could deploy roughly $1 trillion from its Treasury General Account toward bond buybacks. The 10-year yield slipped more than 3 basis points to 4.704%, and the 30-year yield — which breached 5.3% last week for the first time in about two decades — fell 4 basis points to 5.234%. Treasury Secretary Scott Bessent said last week the department would at least double its long-term buyback program beyond the initially announced $4 billion per auction, though he stopped short of confirming new debt-management changes on Monday.
Market participants remain skeptical the expanded buybacks can sustainably lower long-term rates. Following the initial announcement, long-term yields fell only temporarily before resuming their climb, suggesting the effect was short-lived. Gold rose 0.9% to near $4,695 an ounce, hovering around levels last seen in May, as the Treasury's intervention revived concerns about fiscal policy and the U.S. dollar.
The U.S. expanded economic sanctions against Iran on Aug. 24, with Bessent announcing "Operation Economic Outcast" to block the Iranian regime's access to digital assets, technology, gold, aviation, and maritime sectors. More than 60 individuals, entities, and vessels aiding Iran's nuclear and missile programs were added to the list. Separately, President Donald Trump said tariffs on Canadian automobiles, trucks, auto parts, and steel would rise to 50% effective Jan. 1.
Crude oil finished lower on profit-taking after recent geopolitical gains. West Texas Intermediate for October delivery settled at $85.01 a barrel, down 2.35%, while Brent for October delivery closed at $92.17, also down 2.35%. The declines snapped a six-day rally.
Nvidia's valuation has compressed alongside the share slide, with its forward price-to-earnings ratio falling to roughly 18 times — a multi-year low — though the normalized multiple, stripping out unrealized gains on its equity holdings, sits near 60 times. Wall Street analysts have raised earnings estimates by a cumulative 13% over the past three months, with fiscal 2027 profit expected to reach $228 billion, and the average price target implies more than 50% upside. The company's data center business generated $193.7 billion in revenue for fiscal 2026, and it announced an additional $80 billion buyback authorization.
Attention now shifts to the Federal Reserve's preferred inflation gauge — the July Personal Consumption Expenditures price index — and Nvidia's earnings, both due Aug. 26, with Marvell Technology reporting the following day. Fed Chair Kevin Warsh's speech at the Jackson Hole symposium this week remains a key focus for markets.
This article is for informational purposes only and does not constitute investment advice.
