“Technology stocks drag Wall Street down in 2024 opener amid interest rate hike concerns” By Quiver Quantitative

© Reuters Tech Stocks, Wall Street falls as 2024 opens amid interest rate hike concerns

Quiver Quantitative – U.S. stock markets started 2024 on a lukewarm note as a mix of factors, including rising Treasury yields and a downgrade on Apple (NASDAQ:), weighed on investor sentiment. Despite ending 2023 on a positive note, Wall Street’s major indexes faced pressure early in the new year. Yields surged past a two-week high of 4.0000%, dampening enthusiasm for stocks and triggering a reassessment of expectations of a Federal Reserve interest rate cut.

Apple (AAPL) shares fell 3.3% after Barclays (BCS) switched its rating to “underweight” on expectations of weak iPhone demand. This decline contributed significantly to the broader market downturn, with other large-cap stocks such as Nvidia (NASDAQ:) and Microsoft (NASDAQ:) also posting significant losses of 3.5% and 1.7%, respectively. Phil Blancato, CEO of Ladenburg Thalmann Asset Management, pointed out that this could be a time of regrouping and profit taking after a strong rebound from the previous year’s lows.

Market Overview: – U.S. stocks fell on the first trading day of 2024 due to rising Treasury yields and profit-taking. – Broad index declines: Dow Jones (0.19%), S&P 500 (0.73%), Nasdaq (1.49%). – Megacap technology stocks led the decline: Nvidia (3.5%), Microsoft (1.7%), Apple (3.3% after Barclays downgrade). -While the healthcare sector performed better, the technology sector was hit the hardest.

Key Points: -Bitcoin surged above $45,000 for the first time since April 2022, lifting cryptocurrency-related stocks: Marathon Digital (NASDAQ:) (8.9%), MicroStrategy (13%). -Investors are cautious despite a strong 2023 due to AI optimism and easing interest rates. -Economic data releases, Federal Reserve minutes, and the presidential election are seen as potential market catalysts in the coming months.

Preview: – Weekly unemployment claims, payroll data and service sector data for the week. -The Fed’s December meeting minutes are due on Wednesday and will be closely scrutinized for clues about a potential interest rate cut. -Traders expect a nearly 70% chance of a 25 basis point rate cut in March, according to CME Group’s (NASDAQ:) FedWatch tool.

Health stocks (XLV) bucked the trend, rising 1%, while information technology stocks (XLK) led the decline, falling 2.5%. The volatility index also soared, heightening investor anxiety.

Going forward, the market’s focus will be on upcoming economic data, including jobless claims and non-farm payrolls, as well as the Federal Reserve minutes, which could provide insight into future interest rate decisions. Traders are currently expecting a rate cut in March to be highly likely. Cryptocurrency-related companies such as Marathon Digital Holdings (MARA) and MicroStrategy (MSTR) showed an upward trend amid a surge in their stock prices, while Boeing (NYSE:) suffered a downward trend after being excluded from Goldman Sachs (GS) ‘trust list’. I couldn’t do it.

This article originally appeared in Quiver Quantitative.