The S&P 500 experienced its most significant single-day drop since February 2023, while the Nasdaq had its worst decline since October 2022, as small-cap and value stocks continued to outperform large-cap growth stocks.
Notable stock declines occurred following Tesla's 12.33% and Alphabet's Class C shares 5.03% drops post-earnings reports. Analysts predicted a 9.8% rise in S&P 500 earnings from the prior year.
Mixed economic data, including a slump in new home sales and a manufacturing index drop, coexisted with positive signals like durable goods orders rise, consumer spending increase, and a 2.8% annualized second-quarter U.S. economic growth rate.
Stable core PCE price index at 2.6% signified controlled inflation, potentially leading to a Federal Reserve rate cut in September. The 10-year Treasury note yield slightly decreased, while municipal bond yields and investment-grade corporate bond issuance remained steady.
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