S&P, Nasdaq begin 2024 with lower close as Apple, big tech weighs
Nasdaq Composite closed the first trading session of 2024 lower, weighed by a fall in Apple shares after a broker downgrade and declines among other big-tech names triggered by a move higher by Treasury yields.
The lackluster session follows a year where Wall Street's three major indexes notched double-digit gains on the back of optimism around artificial intelligence and stabilizing inflation. The S&P 500 ended last week within 1% of a record closing high reached in early 2022.
However, equities were pressured on Tuesday as U.S.
Treasury yields climbed, with the yield on 10-year notes ticking above 4.000% to a two-week high before easing slightly to 3.937%.
Such movement in Treasury yields reflected investors' tempered expectations around cuts this year in U.S. interest rates.
This, in turn, weighed on growth stocks — among them tech stocks — which would benefit from a more favorable rate environment.
Apple fell 3.6% after Barclays downgraded the tech giant to «underweight», citing weakening iPhone demand. Other megacap stocks also declined, including Nvidia, Meta Platforms and Microsoft, which slipped between 1.4% and 2.7%.
«Everyone was very excited by the tail-end rally, the Fed — on the surface at least — paring back a little, and the fact we didn't have a recession,» said Jason Pride, chief of investment strategy & research at Glenmede.
«But does that mean we're out the woods yet? I suspect, even if the Fed brings rates down gradually, monetary policy is still tight and still likely to be a hindrance to overall economic activity.»
The Fed's December policy meeting minutes and a slew of labor market data are on the roster for this week as market participants look to ascertain the timing of potential rate
