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On Wednesday, July 17, Eastern Time, the Dow Jones Industrial Average continued to hit a record high, the Nasdaq fell more than 500 points, marking the largest single-day drop since December 2022, and the S&P 500 recorded its largest single-day drop since April 30.

The sharp decline in crude oil inventories and the weakening of the US dollar boosted crude oil futures prices. WTI crude oil closed up 2.5% on Wednesday, and energy stocks rose collectively.

The Philadelphia Semiconductor Index recorded its biggest one-day drop since March 2020, with chip stocks and technology stocks falling across the board.

Federal Reserve releases Beige Book on economic conditions

As of the close, the Dow Jones Industrial Average rose 0.59% to 41,198.08 points, continuing to set a new record high; the S&P 500 fell 1.39% to 5,588.27 points, the largest single-day drop since April 30; the Nasdaq fell 2.77% to 17,996.92 points, the largest single-day drop since December 2022.

Goldman Sachs Group strategist Scott Rubner said the S&P 500 has nowhere to go but down at its current level.

That’s because Wednesday, July 17, is historically a turning point for stock returns, he said, citing data going back to 1928. Then the following month, August, is typically the heaviest outflow month from passive stocks and mutual funds.

Unfavorable seasonal factors, over-positioning and the fact that all the good news has been priced in have put the S&P 500 on the brink of a summer correction.

On Wednesday, the Federal Reserve released the Beige Book of economic conditions, which showed that economic activities in most regions have maintained a slight to moderate growth rate in the recent period, with 7 regions reporting some increase in economic activities and 5 regions indicating that economic activities were flat or declining.

Economic growth is expected to slow over the next six months due to uncertainty over upcoming elections, policies, geopolitical conflicts and inflation.

Fed's Williams said the Fed is one step closer to cutting interest rates, but is not ready to implement it yet, and the current restrictive policy stance is appropriate.

Fed Governor Waller said that the time for interest rate cuts is getting closer and closer, and recent data makes him more confident in achieving a 2% inflation rate. It is important to communicate different policy paths.

Technology stocks and chip stocks fell across the board

The Philadelphia Semiconductor Index fell 6.81%, its biggest one-day drop since March 2020.

Chip stocks fell across the board, with ASML down 12.74%, Applied Materials down 10.48%, AMD down 10.21%, Qualcomm down 8.61%, TSMC down 7.92%, Broadcom down 7.91%, Nvidia down 6.64%, Micron Technology down 6.27%, and Microchip Technology down 3.47%.

ASML's net sales in the second quarter were 6.24 billion euros, compared with 5.29 billion euros in the first quarter; net profit was 1.578 billion euros, compared with 1.224 billion euros in the first quarter; basic earnings per share were 4.01 euros, compared with 3.11 euros in the first quarter; total net sales in the third quarter are expected to be between 6.7 billion and 7.3 billion euros.

Technology stocks fell across the board, with Apple down 2.53%, Amazon down 2.64%, Netflix down 1.35%, Google down 1.58%, Facebook down 5.68%, Microsoft down 1.33%, and Tesla down 3.14%.

WTI crude oil closes higher

Energy stocks rose collectively

WTI futures for August delivery closed up $2.09, or 2.52%, at $82.85 a barrel.

The U.S. Energy Information Administration reported on Wednesday that U.S. crude oil inventories fell by 4.9 million barrels in the week ending July 12, far exceeding analysts' average expectation of 300,000 barrels.

The dollar spot index fell 0.4% on Wednesday to its lowest level since late May after the greenback fell to a 17-week low against a basket of other major currencies. Oil prices got a boost from this.

Energy stocks rose collectively, with Exxon Mobil up 1.38%, Chevron up 2.22%, ConocoPhillips up 0.79%, Schlumberger up 0.37% and Occidental Petroleum up 1.66%.

(Compiled by Zhao Xinyi)

Editor: Huang Mei

Review: Xu Wen

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