A selloff in technology stocks has dragged on the S&P 500 and Nasdaq, with investors also cautious about brewing US-China tensions at a time when policymakers are attempting to revive the global economy from a coronavirus-driven slump.
Amazon, Microsoft and Facebook, which have led a recent rally, weighed on the tech-heavy Nasdaq, while healthcare and technology stocks – which outperformed in the coronavirus-led market slump – were among the S&P 500 sector indexes in the red.
On the other hand, travel-related stocks including airlines, cruise companies and hotel operators jumped between 2.4 per cent and 4.5 per cent on Wednesday after taking a beating earlier this year due to a virtual halt in global travel.
Ed Keon, chief investment strategist at multi-asset manager QMA in Newark, New Jersey, said there were hopes the economy could turn around in the coming months.
“(Traders are focusing on) the progress made in fighting the coronavirus and optimism that we can see past this very sharp downturn and return to a more normal state sometime in the second half of the year,” he said.
The easing of lockdowns, optimism about an eventual COVID-19 vaccine and massive US stimulus have powered a recent stock market rally, helping the S&P 500 end on Tuesday at its highest level since early March.
However, Sino-US worries have kept a lid on further gains, with US President Donald Trump saying Washington would announce its response to China’s planned national security legislation on Hong Kong before the end of the week.
At 10.39am local time, the Dow Jones Industrial Average was up 177.27 points, or 0.71 per cent, at 25,172.38, the S&P 500 was down 2.28 points, or 0.08 per cent, at 2,989.49, and the Nasdaq Composite was down 116.61 points, or 1.25 per cent, at 9,223.61.
Facebook and Twitter slipped 2.6 per cent and 2.3 per cent, respectively, after Trump threatened to shutter social media companies a day after Twitter prompted readers to fact check his tweets.
Walt Disney was set to announce its proposal for a phased reopening of its Orlando, Florida, theme parks to a local task force on Wednesday. Its shares gained 1.1 per cent.
Investor attention will now turn to the US Federal Reserve’s Beige Book of economic condition scheduled for release at 2pm local time.
Advancing issues outnumbered decliners nearly 2-to-1 on the NYSE and matched them on the Nasdaq.
The S&P index recorded four new 52-week highs and no new low, while the Nasdaq recorded 27 new highs and six new lows.