Dow Jones closes down 533.06 points after investors sell stocks

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The Dow Jones Industrial Average closed lower on Thursday (July 18), while the S&P 500 and Nasdaq fell for a second straight day as investors sold off shares amid concerns about the uncertain political situation in the United States.

The Dow Jones Industrial Average fell 533.06 points or 1.29% to 40,665.02, the S&P 500 fell 43.68 points or 0.78% to 5,544.59, and the Nasdaq Composite fell 125.70 points or 0.70% to 17,871.22.

“In recent days, investors have been moving away from high-cap stocks, including big tech companies, into mid- and low-cap stocks, but they have been selling broadly as they look to hold on to cash amid continued political uncertainty,” said Tim Griskey, a portfolio strategist at Ingalls & Snyder in New York.

“Investors have been selling off stocks broadly after absorbing the good news, including the expectation that the Federal Reserve will cut interest rates in September and that the United States is likely to survive a recession,” said Gene Goldman, an analyst at Cetera Investment Management in New York. “Now investors are concerned that Republican presidential candidate Donald Trump will make more negative remarks after he threatened to impose tariffs on Chinese imports if he wins the White House again.”

Ten of the 11 sectors that make up the S&P 500 index ended in the red, led by a 2.3% drop in healthcare stocks, followed by a 1.28% drop in luxury goods stocks. The energy sector bucked the market trend, rising 0.33%.

The Nasdaq Composite Index continued to fall after falling 2.8% on Wednesday, its biggest one-day decline since December 2022, hit by sell-offs in technology and semiconductor stocks after reports that President Joe Biden's administration was considering tougher measures against tech companies if they continued to allow China access to US technology.

The CBOE Volatility Index (VIX), a gauge of investor anxiety about the US stock market, has continued to rise, recently hitting its highest level since early May this year.

Domino's Pizza shares plunged 13.6% after the company reported lower-than-expected sales.

Warner Bros. Discovery shares jumped 2.4% after reports the company is planning to spin off its digital streaming and studio businesses from its TV networks.

In economic data released last night, the US Department of Labor reported that initial jobless claims rose by 20,000 to a seasonally adjusted 243,000 last week, the highest level since August 12, 2013, and above the analysts' forecast of 229,000.

The Philadelphia Federal Reserve Bank said its Mid-Atlantic manufacturing index rose 13 points to +13.9 in July, beating analysts' expectations of +2.9.

Meanwhile, the positive manufacturing index indicates that manufacturing in the Mid-Atlantic region is expanding, driven by increases in new orders and employment.