Market Wrap | Market Volatility as S&P 500 Drops and Bank of America Lowers Treasury Yield Forecast

On August 11, 2025, the S&P 500 index fell by 0.25%, the Dow Jones Industrial Average declined by 0.45%, and the Nasdaq Composite Index dropped by 0.30%. Bank of America has revised its outlook for U.S. Treasury yields, with the strategy team led by Mark Cabana lowering the year-end forecast for the 2-year yield from 3.75% to 3.5%, and the 10-year yield from 4.5% to 4.25%, anticipating the Federal Reserve to adjust its risk assessment based on recent economic data. Meanwhile, Citigroup strategists have raised their year-end target for the S&P 500 index from 6300 to 6600 points, suggesting that potential tax cuts could mitigate the negative impacts of tariffs on U.S. businesses, indicating a bullish outlook despite recent market declines.

The S&P sectors showed mixed performance today. The Utilities, Technology, Energy, Industrials, and Real Estate sectors underperformed the broader S&P index. Conversely, the Healthcare, Consumer Discretionary, and Communication Services sectors bucked the trend and posted gains.

Salesforce shares dropped 3.26% as investors reacted to the company's slowing sales growth and cautious enterprise spending. The cloud-based software giant's outlook has been weighed down by these factors, leading to a decline in its stock price.

Equillium's stock surged by 78.88% today, driven by a $50 million financing deal that will support the advancement of EQ504, significantly boosting investor confidence. Entero Therapeutics also saw a notable rise, with its shares increasing by 66.46% following a $3 million private placement, which has enhanced investor confidence and the potential for drug development. On the other hand, Safety Shot Inc's shares dropped by 51.04%, making it the worst performer in U.S. trade. IO Biotech's stock also declined, falling by 41.99% after its Phase 3 trial failed to meet the primary endpoint, leading to a lowered stock price target.

The meeting between President Trump and Intel's CEO at the White House is notable, as it could influence technology policies and regulations that could impact Intel and the broader semiconductor industry. Additionally, Nvidia and AMD have reached a special agreement with the U.S. government to pay 15% of their chip sales revenue in China to obtain export licenses, a move that reflects ongoing tensions and regulations in the tech industry, potentially affecting their market performance. The Federal Reserve's recent adjustment in reverse repo agreements indicates changes in liquidity management, which could influence market interest rates. Furthermore, Citigroup's upward revision of the S&P 500's year-end target suggests optimism about corporate earnings, with tax cuts expected to mitigate tariff impacts, potentially boosting investor confidence in the U.S. equity market.