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The S&P 500 fell 0.6%, the Dow Jones Industrial Average fell 0.6%, or 221 points, and Nasdaq fell 0.9%.
Moody’s downgraded the ratings of 10 banks by one notch and placed six banks including US Bancorp (NYSE:USB), and State Street (NYSE:STT) on review for downgrades.
The ratings agency said second-quarter results from the banks showed “growing profitability pressures that will reduce their ability to generate internal capital.”
Bank of America Corp (NYSE:BAC), Huntington Bancshares (NASDAQ:HBAN), and Citizens Financial (NYSE:CFG) were among the top declines falling 3%.
Big tech including Meta Platforms Inc (NASDAQ:META) and Microsoft (NASDAQ:MSFT) were a drag on tech as recent concerns about valuation and a rise in Treasury yields persist.
As well as weakness in big tech, a more than 1% fall in semiconductor stocks was paced by declines in Advanced Micro Devices Inc (NASDAQ:AMD), Marvell Technology Group Ltd (NASDAQ:MRVL) and Novanta.
Novanta Inc (NASDAQ:NOVT) fell more than 11% after the semiconductor equipment maker cut its annual guidance as headwinds including reduced IT infrastructure spending and weakness in China are expected to intensify in the second half of the year.
Chegg Inc (NYSE:CHGG) reported a beat on quarterly revenue and stoked investor optimism by detailing plans to make a further push into generative artificial intelligence to ward off the threat from ChatGPT. Its shares were up more than 5%.
Some on Wall Street, however, want to see further evidence that a further push into AI will help demand rebound as the widespread use of AI tools such as ChatGPT poses a threat to Chegg’s business.
“While we agree that embracing generative AI aggressively and immediately is the right call and will likely result in a bigger market opportunity and an even better user experience, the reduced near-term visibility is keeping us on the sidelines,” Barrington Research said in a note.
Beyond Meat Inc (NASDAQ:BYND) fell more than 16% after the plant-based meat company reported second-quarter revenue that fell short of estimates as demand for plant-based meat waned in the U.S.
“Given Beyond Meat’s focus on cutting costs, we think it will be increasingly hard for the company to invest the necessarily level to spur demand on their own and will thus need assistance from competitors,” UBS said in a note.
DISH Network Corporation (NASDAQ:DISH) said it would merge with satellite operator EchoStar to create a wireless connectivity company valued at about roughly $6 billion.
The move, which reunites the two companies following the spinoff of Dish from Echostar (NASDAQ:SATS) in 2008, will combine Dish’s satellite, streaming services and 5G network with EchoStar’s satellite infrastructure.
