Market Recap – August 2nd
On Wednesday, a selloff in the stock market occurred, with the Nasdaq Composite experiencing its worst day since February. Fitch downgraded the long-term rating for the U.S., leading to risk-off sentiment resurfacing among investors. The Nasdaq dropped 2.17%, the S&P 500 declined 1.38%, and the Dow Jones Industrial Average tumbled 0.98%.
Fitch Ratings downgraded the long-term foreign currency issuer default rating for the U.S. to AA+ from AAA, citing expected fiscal deterioration over the next three years. This marks the first major ratings downgrade for the U.S. since 2011 when Standard & Poor’s cut the rating to AA+ from AAA. In addition to the broader market decline, individual companies also faced challenges. Qualcomm’s shares fell 7% after reporting lower-than-expected revenue for its third fiscal quarter. The company’s adjusted revenue was $8.44 billion, below analysts’ expectations of $8.5 billion. Furthermore, Qualcomm’s guidance for the fourth quarter was also disappointing. Similarly, Zillow’s stock pulled back 2% after the online real estate company issued disappointing guidance for the third quarter. Zillow forecasted revenue of $458 million to $486 million, while analysts were expecting revenue of $488.1 million. Overall, the market experienced a day of negative sentiment, with the downgrade of the U.S. rating and underwhelming performances from certain companies contributing to the decline.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.