The Nasdaq Composite fell for a second session Wednesday to start the year, building on its worst daily performance in nearly three months.
The tech-heavy index lost 1.18% to close at 14,592.21, marking its fourth consecutive losing day. The S&P 500 slipped 0.80% to end at 4,704.81. The Dow Jones Industrial Average slid 284.85 points, or 0.76%, finishing at 37,430.19.
The Nasdaq is coming off its worst day since October, dragged down by major technology stocks and a nearly 4% decline in Apple after Barclays downgraded the iPhone maker. Apple shares dipped another 0.8% on Wednesday.
Other tech stalwarts Nvidia, Tesla and Meta all declined Wednesday. This pullback also came as the U.S. 10-year Treasury yield briefly rose above the key 4% mark. It was last trading around 3.91%.
Investors appeared to be selling last year’s tech winners, which soared as the market anticipated easing monetary policy in 2024. But with uncertainty around when the Federal Reserve will finally begin cutting rates, investors seem to have curbed their enthusiasm.
“Long term, I’m still very bullish. But near term I just worry that everybody is coming into the year feeling too good,” Steve Eisman, a senior portfolio manager at Neuberger Berman profiled in “The Big Short” said on CNBC’s “Fast Money” on Tuesday.
Short-term corrections are nothing out of the ordinary in a market that’s coming off of fresh highs and entering primary season, he added, noting that the longer-term setup looks positive on a six- to twelve-month horizon.
The major averages were also under pressure Wednesday afternoon following the release of the Fed’s latest meeting minutes, as they showed the central bank was still not quite ready to lower rates.
“Participants generally stressed the importance of maintaining a careful and data-dependent approach to making monetary policy decisions and reaffirmed that it would be appropriate for policy to remain at a restrictive stance for some time until inflation was clearly moving down sustainably toward the Committee’s objective,” the minutes stated.
However, officials indicated that they expect three quarter-percentage point cuts sometime this year, although a high degree of uncertainty remains around when these cuts are likely to occur.
The market’s coming off a breathtaking year that saw all the major averages bounce back from a devastating 2022. The S&P 500 surged more than 24% and capped off its longest weekly winning streak since 2004, while the Nasdaq jumped 43% for its best year since 2020.
