Dow Jones, other US benchmarks fall for second day in a row; Selling continues in Nvidia, Oracle

Benchmark indices on Wall Street fell for the second day in a row on Wednesday, September 24, as investors continued booking profits in recent outperformers ahead of important macro data to be reported over the next two sessions.

The Dow Jones fell 170 points, taking the fall from Tuesday's high to over 600 points, while the S&P 500 and Nasdaq also ended lower as selling continued in Nvidia and Oracle.

Market participants are choosing to take some money off the table after Federal Reserve Chair Jerome Powell remarked that equities are "fairly highly valued" in an address on Tuesday. BofA Securities noted that the US markets are indeed statistically expensive on 19 out of the 20 market parameters.

At its peak earlier this week, the S&P 500 was valued at a one-year forward price-to-earnings multiple of 22.9 times, a level only surpassed previously during the recent post-Covid rally and the dot-com boom of 1999-2000.

Piper Sandler wrote in its note that although the trend of major gains in the US markets is not over yet, the risk-reward for the short-term appears unfavourable. Nomura advised bullish investors to continue hedging their bets.

Intel though, emerged as an outperformer yet again after Bloomberg reported that the company has approached Apple for a potential investment. This follows a recent $5 billion investment by Nvidia and another $2 billion by SoftBank, in addition to the Trump administration acquiring some stake, in exchange of rebate provided under the CHIPS Act. The stock ended 6% higher, taking the year-to-date advance to 55%.

Wall Street on Wednesday also saw another stock double in a single session, when Lithium Americas surged over 100% on reports of the Trump Administration seeking an equity stake in the Canadian-based miner as it negotiates terms of a $2.2 billion loan with the US Energy Department for a mine in Nevada, it co-owns (62:38) with General Motors. The stock eventually closed the session with gains of 95%.

Later today, as many as seven Fed officials are set to speak at various platforms through the day. Additionally, the third revised estimates of the Q2 GDP, along with initial jobless claims, Durable Goods orders, advanced wholesale and retail inventories are also be reported.