Today’s Market Wrap Up and a Glimpse Into Thursday

Stocks sold off in a big way, with the Dow Jones Industrial Average closing lower by nearly 400 points for a 1% decline. The S&P 500 and Nasdaq were down by similar percentages as investors ran for the hills. Trading volume remains light as the summer draws to a close and August takes a dramatic turn.

The boiling point was a combination of minutes from the Federal Reserve revealing policymakers might taper bond purchases sooner than later coupled with a less sanguine picture out of corporate America. Until now, second-quarter earnings have been a bright spot in the markets, but some cracks are beginning to show. Stocks such as Target and Krispy Kreme were under pressure after reporting their Q2 results.

Stocks to Watch

• Target’s stock fell nearly 3%, off its lows of the session. The retailer reported better-than-expected fiscal Q2 earnings, fueled by strong sales across departments, and announced a USD 15 billion share repurchase program. Nonetheless, the stock got caught up in the selling in what could perhaps just be a case of bad timing.
• Chipmaker Nvidia reported better-than-expected fiscal Q2 earnings thanks largely to sales of its graphics cards. Revenue reached a new record for the company at USD 6.5 billion, but its cryptocurrency-related segment lagged expectations.
• Trading app Robinhood’s Q2 revenue soared more than 100% to USD 565 million in its maiden quarter as a publicly traded company, thanks largely to cryptocurrency trading, particularly in meme-coin Dogecoin. The company was not profitable and is bracing for “seasonal headwinds” in Q3, including “lower trading activity.” The stock rallied ahead of the earnings results but in the after-hours shares are tanking by 7% on the outlook.
• Tech entrepreneur Jack Dorsey, who is at the helm of Twitter and Square, is venturing into bitcoin mining with Compass Mining. Dorsey is a bitcoin bull and holds bitcoin on Square’s balance sheet.

Look Ahead

Housing starts for the month of July will be released on Thursday morning. After a stronger-than-expected June, Wells Fargo economists are predicting a cooldown in the annual rate to 1.602 million units.

As earnings season winds down, Applied Materials and Ross Stores are on tap to report their quarterly results on Thursday.