A bumpy few weeks pulled US stocks down from recent peaks, though equities remain in positive territory for the year amid an uptick in market volatility.
Since hitting an all-time high July 16, the S&P 500 has fallen 6.1% through Aug. 8. The US Federal Reserve's ongoing hold on lowering interest rates amid cooling inflation and rising unemployment, fears of a recession and the recent unwinding of the yen carry trade have all contributed to a broader market sell-off in recent weeks.
Still, stocks are generally up since the start of 2024 as the anticipation of Fed rate cuts and enthusiasm over artificial intelligence technologies pushed markets higher. The S&P 500 has risen 11.5% this year through Aug. 8, while the Dow Jones Industrial Average is up 4.7% and the small-cap Russell 2000 index is up 2.8%.
Sector breakdown
Most sectors were hammered by the recent pullback in equities, with only consumer staples, utilities and real estate registering gains since July 16.
The S&P 500 information technology and consumer discretionary sectors — which count Microsoft Corp., NVIDIA Corp., Amazon.com Inc. and Tesla Inc. among their respective constituents — have fared the worst since July 16; the information technology sector has fallen 12.0% and the consumer discretionary sector has dropped 11.4% through Aug. 8.
The two sectors contain much of the "Magnificent Seven," a group of technology and tech-adjacent mega-cap companies that have driven the broader market for the past year. The group has struggled in recent weeks, shedding more than $1 trillion in combined market cap.
Year to date, the information technology sector is the best performer with the S&P 500, rising 17.4%.
Market 'fear gauge' spikes
A measure of stock market volatility hit a fresh high in early August. The CBOE Volatility Index (VIX) on Aug. 5 spiked to the highest level in nearly four years and has since dipped slightly.
Before the July market downturn, the index — commonly known as Wall Street's "fear gauge" — had been trending lower since spiking during the onset of the COVID-19 pandemic in the US.