On Wednesday, the Nasdaq experienced a decline for the second consecutive day as market participants persisted in realizing profits, especially within the technology sector. The Fed Chairman’s comment also negatively impacted investor sentiment. Investors expressed apprehension regarding the significantly inflated valuations of technology giants concentrated on artificial intelligence. All three major stock indexes concluded the trading session in negative territory.

The Dow Jones Industrial Average fell 0.4%, a decline of 171.50 points, concluding at 46,121.28. It is noteworthy that 11 components of the 30-stock index concluded in positive territory, whereas 19 ended in negative territory. At the intraday high, the blue-chip index recorded an increase of 160.29 points. The tech-heavy Nasdaq Composite concluded at 22,497.86, declining by 0.3%, influenced by the lackluster performance of major technology firms. At its intraday peak, the technology-focused index experienced an increase of 84 points, while at its intraday trough, it recorded a decline of 176.50 points. The S&P 500 experienced a decrease of 0.2%, concluding the session at 6,637.97. During the trading session, the benchmark index reached a peak of 15.74 points above its previous close, while it also experienced a decline of 35.16 points at its lowest point. Among the 11 broad sectors of the market index, seven concluded in negative territory, whereas four recorded gains. The Energy Select Sector SPDR advanced 1.3%. On the other hand, the Materials Select Sector SPDR and the Real Estate Select Sector SPDR recorded increases of 1.2% and 1%, respectively.

The fear gauge, the CBOE Volatility Index, experienced a decline of 2.8%, settling at 16.18. On Wednesday, trading volume reached 18.04 billion shares, surpassing the 20-session average of 17.75 billion shares. On the NYSE, the ratio of decliners to advancers stood at 1.88-to-1. On the Nasdaq, a ratio of 1.35-to-1 indicated a preference for declining issues. On September 23, during his address in Providence, Rhode Island, Fed Chairman Jerome Powell articulated apprehensions regarding the current overvaluation of asset prices, especially in the realm of risky equities. Reports says that the Fed Chair was queried on whether the central bank prioritized elevated market prices. In response, Powell stated, “We do look at overall financial conditions, and we ask ourselves whether our policies are affecting financial conditions in a way that is what we’re trying to achieve.” However, it is accurate to state that, by various metrics, equity prices are indeed quite elevated.

The remarkable bull run driven by artificial intelligence that began in 2023 and 2024 has persisted into 2025 as well. The enthusiasm surrounding AI appears robust, with hyperscalers increasingly choosing data center installations to accommodate the substantial expansion of cloud computing. In the interim, firms that have integrated AI extensively into their end products have experienced substantial increases in their valuations over the past 33 months. The stock prices of certain companies have experienced remarkable increases of 200-300% during this timeframe. Investors express apprehension regarding the monetization prospects associated with this substantial investment by hyperscalers. As a result, the AI rally encountered a challenge. The stock prices of NVIDIA Corp., Oracle Corp., and Micron Technology Inc. decreased by 0.8%, 1.7%, and 2.8%, respectively. Micron Technology currently holds a Zacks Rank of #1, indicating a Strong Buy. The comprehensive list of today’s Zacks #1 Rank stocks is available here.

Reports says that new home sales in August reached 800,000, surpassing the Zacks Consensus Estimate of 655,000. This represented the peak level since January 2022. The July metric was adjusted upward to 664,000 from the previously reported figure of 642,000. In August, new home sales experienced a year-over-year increase of 15.4%. U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, experienced a sequential decline of 0.6 million barrels for the week ending September 19.