U.S. Stocks Turn Mixed After Seeing Initial Weakness

After an early move to the downside, the major U.S. stock indexes have turned mixed over the course of trading on Wednesday. The Nasdaq has bounced well off its early lows and into positive territory, while the Dow remains firmly in the red.

Currently, the major averages continue to turn in a mixed performance. While the Nasdaq is up 62.78 points or 0.5 percent at 13,618.46, the S&P 500 is down 1.95 points or less than a tenth of a percent at 4,376.46 and the Dow is down 154.16 points or 0.5 percent at 33,772.58.

Weakness among semiconductor stocks weighed on the markets in early trading after a report from the Wall Street Journal said the Biden administration is considering new restrictions on exports of artificial intelligence chips to China.

Citing people familiar with the situation, the Journal said the Commerce Department could move as soon as early next month to stop the shipments of chips to customers in China and other countries of concern without first obtaining a license.

The Journal noted the potential restrictions come amid concerns China could use AI chips for weapon development and hacking.

Selling pressure waned shortly after the start of trading, however, with the Philadelphia Semiconductor Index bouncing back near the unchanged line.

Strength has subsequently emerged among other tech stocks, contributing to the advance by the Nasdaq. Tesla (TSLA) and Netflix (NFLX) are posting notable gains.

Meanwhile, Dow components Travelers (TRV), Amgen (AMGN) and Home Depot (HD) have come under pressure, weighing on the blue chip index.

Traders also kept an eye on remarks by Federal Reserve Chair Jerome Powell during a panel discussion at the European Central Bank Forum on Central Banking in Sintra, Portugal.

Powell reiterated that he expects additional interest rate hikes in the months ahead and said raising rates at consecutive meetings is not off the table

The Fed Chief was joined by European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey and Bank of Japan Governor Kazuo Ueda.

Sector News

While most of the major sectors are showing only modest moves on the day, gold stocks have come under pressure, dragging the NYSE Arca Gold Bugs Index down by 1.6 percent to a three-month intraday low.

The weakness among gold stocks comes amid a modest decrease by the price of the precious metal, with gold for August delivery slipping $8.30 to $1,915.50 an ounce.

Steel stocks are also seeing considerable weakness, as reflected by the 1.6 percent loss being posted by the NYSE Arca Steel Index.

Banking and utilities stocks have also moved to the downside on the day, while notable strength has emerged among software stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index spiked by 2.0 percent, while South Korea’s Kospi slid by 0.7 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index has jumped by 1.0 percent, the German DAX Index is up by 0.8 percent and the U.K.’s FTSE 100 Index is up by 0.6 percent.

In the bond market, treasuries have pulled back off their early highs but continue to see modest strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.2 basis points at 3.756 percent.

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