Overview
On August 19, 2025, U.S. stock markets closed lower with major indices dropping due to profit-taking in tech stocks. The average S&P 500 index fell by 0.6%, marking its largest drop in two weeks, while the Nasdaq index decreased by 1.4%, experiencing its second-largest decline since April. Technology giant Nvidia saw its shares fall by 3.5%, marking its largest drop since April, and Palantir plummeted by 9.4%. This selling pressure revealed the market's vulnerability due to its reliance on a few large-cap stocks, offsetting gains in over 350 S&P stocks. This decline was primarily attributed to valuation pressures caused by recent gains. The price-to-earnings ratio of the Nasdaq, having driven the market by 1.6% in April, is at 27 times forward earnings, over 30% above the long-term average. Concerns over the sustainability of the AI boom and the pace of economic growth further dampened investor sentiment.
| Nasdaq Composite | S&P 500 |
| Dow Jones Industrial Average | 1 South Korean won equals |
A Major News Story
- Nvidia's share fell by 3.5%, marking its largest drop since April.
- Palantir's stock tumbled by 9.4%.
- Concerns over AI investment sustainability have grown, influencing tech sectors negatively.
- Home Depot exceeded expectations with strong earnings, boosting major retail stocks.
- Intel's stock surged following Softbank's $2 billion investment news.
- All eyes are on Jerome Powell's speech on Friday night, with investors curious about his stance on interest rates.
Tomorrow's Economic Indicators
| Time | Event |
|---|---|
| 20:00 | U.S. MBA Mortgage Applications |
| 23:30 | U.S. EIA Crude Oil Stocks Report |
| 02:00 | U.S. 20-Year Treasury Auction |
| Midnight | U.S. Federal Reserve Member Speech |
General Opinion
The market's downturn was influenced by profit-taking pressures and uncertainty about economic growth rates, leading to a cautious investment climate. There appears to be a pause in the upward momentum of tech stocks, reflecting an exhaustion from recent rallies. The focus now shifts to key economic indicators and Federal Reserve policies, which are expected to play a pivotal role in determining the market's future trajectory. Particularly, Jerome Powell's forthcoming speech is anticipated to heavily influence market directions.
