Stocks Pull Back After August’s Dramatic Rally: Markets Wrap S&P 500 Drops After Longest Winning Streak of 2024

After a relentless rally that brought the market close to its all-time highs, stocks took a breather, with the S&P 500 dipping below 5,600. The drop interrupted what could have been the index’s longest winning streak in 20 years. This comes after a remarkable recovery in August, where the S&P 500 surged nearly 8% in just eight days, a stark reversal from the panic selling earlier in the month.

Nvidia Corp., which had gained almost 25% in six days, led losses in the megacap sector. Bank of America Corp. also declined after Warren Buffett’s Berkshire Hathaway Inc. sold more shares. In other corporate news, Lowe’s Cos. reduced its full-year guidance, Netflix Inc. reached a record high, and Palo Alto Networks Inc. climbed on a bullish outlook and an expanded buyback program.

Treasury 10-year yields fell six basis points to 3.82%. The Canadian dollar lagged behind most major currencies as inflation in Canada slowed, increasing expectations for a rate cut. Oil prices steadied as traders monitored cease-fire talks in Gaza.

Corporate Highlights:

• Johnson & Johnson (JNJ)  will pay up to $1.7 billion for V-Wave Ltd., enhancing its efforts in heart failure treatment.
• Kroger Co. (KR)  is entering the US investment-grade market to help fund its acquisition of Albertsons Cos., potentially one of the year’s biggest corporate bond deals.
• Eli Lilly & Co.’s (LLY) weight-loss shot showed a 94% reduction in diabetes risk in a three-year study, highlighting the long-term benefits of obesity treatment.
• Alaska Air Group Inc. (ALK) and Hawaiian Holdings Inc. are closer to finalizing their $1.9 billion merger after the US Justice Department decided not to challenge it.
• Boeing Co. (BA) has paused flight tests of its 777X jetliner to inspect for structural issues.
• Edgar Bronfman Jr. has submitted a $4.3 billion bid to take control of Paramount Global, competing with an existing offer from Skydance Media.