Stock market live Wednesday: Tech sell-off again, Dow drops 500, Interactive Brokers raises margin levels

This is CNBC's markets live blog that will be updated throughout the day. 

Stocks erased an early gain on Wednesday as the September slide for tech stocks resumed. Nike's stock rose after a strong earnings report, but Tesla's slipped after the company's "battery day." Commentary from Federal Reserve officials including Chair Jerome Powell also gave investors insight to how the central bankers view the state of the economic recovery.

Wednesday's sell-off by the numbers

  • S&P 500 closed down 2.37% for its fifth negative day in six and its worst day since Sept. 8
  • S&P 500 is up 0.19% year to date
  • S&P 500 is 9.79% below its intraday all-time high of 3,588.11 from Sept. 2
  • Eleven out of 11 sectors were negative Wednesday led by energy down 4.54%
  • Nasdaq Composite closed down 3.02% for its fifth negative day in six and its worst day since Sept. 10
  • Nasdaq is up 18.51% year to date
  • Nasdaq is 11.94% below its intraday all-time high of 12,074.07 from Sept. 2
  • Dow closed down 525 points, or 1.92%, for its fourth negative day in five and its worst day since Sept. 8
  • Dow is down 6.22% year to date
  • Dow is 9.49% below its intraday all-time high of 29,568.57 from Feb. 12. — Gina Francolla

Stocks close near session lows

The market was unable to shake off its losses in the final hour of trading and finished near session lows. The Nasdaq Composite was the worst performer, falling 3%. The Dow notched a loss of 525 points, or 1.9%, while the S&P 500 sank 2.4%. — Jesse Pound

S&P 500 retesting Monday sell-off after bounce in tech and momentum fails

As the market sells off into the close, traders are watching 3,229 on the S&P 500, Monday's low. If the index breaks that level and closes below it, the next big level technicians are watching is the 200-day moving average at 3,106.

Scott Redler of T3Live.com said the S&P's big test is how it deals with the Monday low. "If it breaks it and closes below it, the market will likely make a bigger move to the 200-day," he said.

Tech stocks and momentum names sold off Wednesday, after Tuesday's rebound failed. Apple was down 4%, and the level to watch on the tech bellwether is $103. If that support level fails, the next level to watch is below $92 per share.

Redler said Apple is giving clues to the overall market's performance.

"It usually leads the tape sentiment,' he said. The stock is part of the Dow, S&P 500 and Nasdaq. — Patti Domm 

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Interactive Brokers braces for election volatility by telling clients to put up more cash

Market action around the election is expected to be so volatile that Interactive Brokers is forcing clients to put up more money in order to trade using leverage. The retail broker is increasing margin requirements — how much money an investor using leverage and derivatives has in their brokerage account after a stock purchase — by 35%  heading into the November presidential election between incumbent President Donald Trump and Democratic nominee Joe Biden, according to a clients letter obtained by CNBC. 

"Elevated option implied volatilities indicate that the markets will be confronting elevated volatility both before and after the November 2020 election," the note said. "IBKR shares that sentiment and believe it's appropriate to start controlling leverage in a measured fashion in advance."

The Cbeo volatility index, an gauge of investor fear, currently sits around 29, but is expected to jump above 32 in November, according to futures pricing. The chances of a contested election are also on the rise, as more people are expected to vote by mail because of the coronavirus pandemic. — Maggie Fitzgerald 

'Fear gauge' climbs to near 30

The CBOE Volatility Index has jumped more than 2 points so far on Wednesday. The index, often called the market's "fear gauge," was on track to close at its highest level since Sept. 10. The index, which hasn't closed above 30 since Sept. 8, is still much lower than it was during the sell-off in March. — Jesse Pound

Final hour of trading

The sell-off gained steam in afternoon trading and with roughly an hour left in trading, the Dow was down about 540 points, or 2%. The S&P 500 and Nasdaq Composite dropped 2.3% and 3%, respectively. Shares of Apple and Amazon extended their losses to more than 4%. — Jesse Pound

Fed's Quarles sees 'patient' approach to future rate moves

Fed Vice Chairman Randal Quarles advocated patience with future rate increases, even when inflation rises above the level that policymakers consider healthy. In a speech Wednesday afternoon, Quarles expressed optimism about the economy as well as a commitment to the Fed's new inflation approach in which it will allow levels higher than 2% for a period of time in furtherance of getting the economy back to full employment. He noted that "modest deviations of any particular measure of inflation around 2 percent are not a first-order concern in my decision framework. In fact, I likely will be even more patient in reacting to small upward deviations, given the Committee's move to focus on shortfalls of employment from maximum employment rather than deviations." Quarles' comments came on a day when eight Fed officials voiced views on monetary policy and other central bank issues. — Jeff Cox

Markets sink in afternoon trading

The major indexes extended their losses in afternoon trading as major tech stocks continued to churn lower. The Dow was down about 220 points, or 0.8%, while the S&P 500 and the Nasdaq Composite lost 1.1% and 1.8%, respectively. Shares of Apple and Amazon were both down about 3%, while Alphabet fell 2.5%. — Jesse Pound

GoodRx pops in debut

Shares of GoodRx jumped 46% in the opening minutes of trading after the company's initial public offering. The company, founded by veteran Doug Hirsch, helps users find prescription drugs at a discount. The stock trades under "GDRX" on the Nasdaq and priced its IPO at $33 per share. — Jesse Pound, Jessica Bursztynsky

Companies making headlines in midday trading

Stitch Fix – Shares of the online clothing styling company plunged more than 16% after a wider-than-expected loss during the fourth quarter. 

Twitter – Shares of Twitter jumped more than 8% after Pivotal Research upgraded the social media platform to buy from hold. 

Western Digital — Shares of Western Digital soared more than 9% after the chipmaker announced it will split its flash and hard disk drive groups into separate business units.

Nike — Shares of the apparel giant surged 8.3% after the company reported better-than-expected results for its fiscal first quarter. 

Check out more stocks making the biggest moves around midday.Yun Li

Fed's Rosengren sees a slower economic recovery ahead

Boston Federal Reserve President Eric Rosengren said his fellow central bankers' expectations for economic recovery are too rosy. Projections released last week showed the median expectation for unemployment is a drop to 7.6% this year and ultimately to 4% by 2023. GDP is estimated to increase by 4% in 2021 after a 3.7% decline in 2020, and inflation is projected to rise to 2% by 2023. "Unfortunately, my own forecast is less optimistic," Rosengren said in remarks Wednesday to the Boston Economic Club. Concerns over a surge in coronavirus cases, dimming hopes for fiscal stimulus and long-lasting virus-related damages to the jobs market inform his forecast. He stressed the importance of continuing policy support from the Fed and Congress. "Monetary policy is pursuing new and imaginative ways to deal with the effects of this pandemic. However, my view is that additional fiscal policy is probably the more effective tool at this time, since it can directly allocate money to firms and businesses most impacted by COVID-19 without requiring them to take on additional debt that must be repaid," he said. — Jeff Cox

Markets at midday: Dow drops more than 100 points as tech sell-off picks up

The major averages were under pressure in midday trading as tech's September swoon continued. The Dow slid 105 points, or 0.4%. The S&P 500 dropped 0.8% and the Nasdaq Composite lost 1.3%. —Fred Imbert

A bright spot for the U.S. energy industry

U.S. gasoline demand is still off by close to a million barrels a day, but there's one source of demand for U.S. oil that looks to be fairly stable – the export market.

Total exports of crude and finished product totaled 7.995 million barrels a day last week, down slightly from 8.095 million at the same time last year, according to the Energy Information Administration's weekly data. The U.S. is now producing 10.7 million barrels a day, down sharply from the March high of 13.1 million barrels a day.

The U.S. exported about 3 million barrels of oil a day last week, up from 2.6 million the week before. The U.S. also exported another 4.97 million barrels of products, including 1.1 million barrels of diesel and 746,000 barrels of gasoline.

"If there's a place where China is living up to its trade agreements, it's crude oil and they continue to be a buyer," said John Kilduff of Again Capital. "It's an outlet the industry definitely needs. They're filling a gap that's been left by Venezuela and Iran. We'll see how these numbers hold up when Libya coms back on line."

U.S. gasoline demand, typically 10% of daily world oil demand, was about 8.5 million barrels a day last week, about the same as the prior week but down from 9.35 million barrels a day in the same week last year. —Patti Domm 

Powell calls for more policy stimulus: 'There's a long way to go'

More policy help will continue to be needed as the U.S. economy continues its recovery, Fed Chairman Jerome Powell said Wednesday during an appearance before Congress. As lawmakers haggle over whether to provide more fiscal help, the central bank leader cited the ongoing need for support on all levels. "We've come a long way pretty quickly, and that's great. But there's a long way to go. So I just would say we need to stay with it, all of us. The recovery will go faster if there's support coming both from Congress and from the Fed," Powell said. — Jeff Cox

Powell says corporate bond purchases have saved jobs

Federal Chairman Jerome Powell defended the central bank's efforts to buy corporate bonds, which he said may have saved hundreds of thousands of jobs. In questioning before a congressional panel on the coronavirus, Powell said efforts to buy billions in the debt of big companies such as Apple and Microsoft was essential in keeping markets open. "When we set the facility up, borrowers and lenders started lending again because we were an effective backstop. These were big American companies that were under tremendous strain and they could have laid off hundreds of thousands of people and didn't because of this facility," he said. "I would say it's been a success." The Fed has yet to buy a bond on the primary market but has loaned $12.5 billion in the second market. However, Powell said the purchases are down to $20 million a day. "We're barely present in the market at all," he said. — Jeff Cox

Early earnings reports show big year-over-year growth

The third-quarter earnings season may just be starting, but the early reporters are showing massive profit growth from the year-earlier period, according to data from The Earnings Scout. Overall, eight S&P 500 companies have reported earnings for the calendar third-quarter period. The Earnings Scout found that those companies — which include Cintas and General Mills — have seen collective profit growth of 42.4%. "These early reporters are crushing it," said Nick Raich, CEO of The Earnings Scout, in a note. "The average EPS surprise for these 8 companies has been +29.05%. Keep in mind, the S&P 500 EPS beat rate has averaged between +3% to +6% over the past decade." —Fred Imbert

Lithium stocks under pressure following Tesla's 'Battery Day'

Shares of lithium producers came under pressure on Wednesday after Tesla made production announcements at its "Battery Day" that will reduce the amount of lithium needed for electric vehicle batteries. Albemarle Corporation fell more than 11%, while Chile-based Sociedad Quimica Y Minera de Chile slid 8%. Shares of Livent Corporation declined more than 4%. 

Morgan Stanley called Tesla's announcements "bad news for lithium stocks. "Lithium stocks are driven by lithium price expectations and should underperform, in our view," the firm said. Raymond James, however, expressed reservations that Tesla will actually become involved in mining operations. "Whether Tesla will actually want to become its own miner remains an open question. Could this be the latest of Musk's PR stunts? To state the obvious, mining entails a totally different skill set versus battery manufacturing," the firm said. - Pippa Stevens

Preliminary PMI shows continued expansion

The September flash reading for IHS Markit's manufacturing purchasing manager's index came in at 53.5, slightly below the 53.8 expected by economists, according to Dow Jones. The service sector reading was 54.6, matching expectations. This data follows concerning numbers for Europe released earlier on Tuesday, with Markit's composite PMI showing 50.1 for the euro zone. Readings above 50 for PMIs represent expansion. — Jesse Pound

Here are Wednesday’s biggest analyst calls of the day: Tesla, Nike, Twitter, Apple & more

  • KeyBanc downgraded KB Home to sector weight from overweight.
  • JPMorgan downgraded Waste Management to underweight from equal weight .
  • Bank of America downgraded American Express to underperform from neutral.
  • BMO upgraded Hasbro to outperform from market perform.
  • Deutsche Bank upgraded Nike to buy from hold.
  • Pivotal upgraded Twitter to buy from hold.
  • UBS assumed coverage of Apple as neutral.
  • Baird named Tesla a fresh bearish pick.
  • Deutsche Bank upgraded Tesla to buy from hold.
  • Craig-Hallum upgraded Western Digital to buy from hold.

Pro Subscribers can read more here. - Michael Bloom

S&P 500 goes red as tech sell-off continues

The S&P 500 turned negative within 30 minutes of the market open as the declines in technology stocks weighed on the broad equity benchmark. Shares of Amazon, Netflix, Alphabet and Apple all fell about 1% in morning trading, dragging the Nasdaq Composite down 0.6%. — Yun Li

Quarter-end could create more cross currents for stocks

The stock market could see more volatility next week, as fund managers shift their holdings to rebalance for month end and quarter end.

The S&P 500 is up 7.1% for the quarter, so that could force some selling by managers who need to get their equity holdings in line with their allocation target. But the S&P is down 5.1% for the month of September, and that means some managers will have to buy, and that may provide a tailwind for stocks next week, say JPMorgan quant strategists.

But Wells Fargo strategists see pressure on stocks, as the quarter end adjustments by U.S. pension funds mean those managers will havre to sell about $10 billion of U.S. stocks and buy $12 billion of fixed income securities. —Patti Domm 

Clarida say the Fed won't 'even begin thinking about' hikes until inflation goal reached

Federal Reserve Vice Chairman Richard Clarida underlined the central bank's commitment to stimulating inflation, stating firmly Wednesday that short-term interest rates are staying at zero until the goal has been met. "We expect that rates will stay at the current level, which is basically zero, until actual observed PCE inflation has reached 2%," Clarida told Bloomberg News. "That's at least. We could actually keep rates at this level beyond that, but going to even begin thinking about lifting off until we actually get observed inflation ... equal to 2%." Clarida added that this is a "whites of their eyes" approach for an inflation level that could "even exceed 2% for some time. ... We don't want it to be a fleeting one quarter and done." The statements come a week after the policymaking Federal Open Market Committee affirmed its switch to an "average inflation targeting" regime that dovetails with a commitment to full employment. — Jeff Cox

Dow jumps 140 points at the open

The Dow and the S&P 500 traded higher out of the gate on Wednesday amid rising hope for a coronavirus vaccine. The 30-stock average jumped 140 points, boosted by a 10% gain in Nike shares. The S&P 500 gained 0.1%, while the Nasdaq Composite lagged, dipping about 0.2%.— Yun Li

Deutsche Bank upgrades Tesla

Shares of Tesla have struggled in premarket trading, down more than 3%, but Deutsche Bank said investors should buy into that weakness. The firm upgraded the stock to buy from hold and said shares have nearly 25% upside after the company's "battery day." Deutsche Bank also increased its long-term delivery outlook for the electric vehicle company. — Jesse Pound

Mortgage demand up 25% year over year

Data compiled by the Mortgage Bankers Association showed mortgage applications to buy a home are up 25% from last year's levels as buyers flood the market despite rising prices. Lawrence Yun, chief economist for the National Association of Realtors, pointed to the changing trends stemming from the coronavirus pandemic for this surge, noting: "Work from home will be in place long after the pandemic is over." —Fred Imbert, Diana Olick

House passes bill to avoid government shutdown

The House passed a bill late Tuesday that would fund the U.S. government until December, avoiding a shutdown before a Sept. 30 deadline. House Speaker Nancy Pelosi, D-Calif., said the bill includes $8 billion in assistance for schoolchildren and family nutrition. It also increases accountability for farm aid money to prevent that money from going to oil companies, something Republican Senate Majority Leader Mitch McConnell had criticized in a bill released Monday. Overall, the bill would keep the government funded until Dec. 11. —Fred Imbert, Jacob Pramuk

Tesla shares under pressure following Battery Day

Tesla shares slid more than 5% during premarket trading on Wednesday, one day after the company's widely-anticipated "Battery Day." At the event, which followed the company's annual shareholders meeting, CEO Elon Musk announced battery developments that will lead to better and cheaper cars. But some on the street were left disappointed after Musk said it would be three years before the company could make a $25,000 vehicle. - Pippa Stevens

Nike pops after earnings beat

A surge in online sales fueled a beat on the top and bottom lines for Nike in the company's fiscal first quarter, sending the stock soaring 12% in premarket trading. The company reported 95 cents in earnings per share, easily beating the 47 expected by analysts surveyed by Refinitiv. Revenue was more than 15% higher than expected as online sales jumped 82% and the women's apparel line tripled.

"We know that digital is the new normal. The consumer today is digitally grounded and simply will not revert back," CEO John Donahoe said during an earnings conference call. — Jesse Pound, Lauren Thomas

Johnson & Johnson enters late-stage vaccine trial

Johnson & Johnson has started its phase three trial testing its potential coronavirus vaccine, marking the fourth drug maker to enter late-stage testing. The other companies are ModernaPfizer and AstraZeneca. The trial will enroll up to 60,000 adult volunteers across 215 locations in the U.S. and other countries, according to the National Institute of Allergy and Infectious Diseases. Shares of Johnson & Johnson gained 2.5% in premarket trading on Wednesday.

The U.S. death toll from the coronavirus pandemic topped 200,000 on Tuesday with cases nearing 6.9 million, according to data compiled by Johns Hopkins University. — Berkeley Lovelace Jr., Yun Li

Dow futures surge as rebound continues

U.S. stock futures pointed on Wednesday to the continuation of a market rebound that started in the previous session. Dow Jones Industrial Average futures were up about 200 points, or 0.7%. S&P 500 futures gained 0.4% and Nasdaq 100 futures climbed 0.4%. Those gains come as Nike shares soared on the back of strong quarterly earnings. Sentiment was also lifted after the House passed a bill that would avoid a government shutdown. —Fred Imbert