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In the year U.S. stocks fell for the second straight trading session as investors looked for strong gains for stock markets in 2024.
The broader S&P 500 fell 1.1 percent in Monday morning trading in New York, while the tech-heavy Nasdaq Composite fell 1.2 percent. Stocks also rebounded sharply on Friday, as investors who took big profits in 2024 sold shares in big tech stocks.
Monday’s selloff was broad, with all but 20 of the more than 500 stocks tracked by the S&P 500 falling, according to FactSet data. Aerospace group Boeing was the biggest laggard, falling 2 percent after the fatal crash of a 737-800 jetliner in South Korea over the weekend. American Airlines also fell, with United Airlines slipping by the same margin.
Big tech companies including chipmaker Broadcom, enterprise software group Oracle and PC maker Dell, as well as Elon Musk’s electric car maker Tesla, fell as investors shunned the biggest earnings of the year.
Despite Monday’s pullback, the S&P 500 is up 24% in 2024.
Thomas Lee of research firm Fundstrat said the sell-off was the result of “profit-taking” as investors adjusted portfolios at the end of a strong year. Shares. This month, the Federal Reserve signaled that it had investors untouched — about half of September’s — while predicting two quarter-point rate cuts next year.
Apollo chief economist Thorsten Slock echoed Lee’s sentiments, saying worries that interest rates will remain higher than previously expected have weighed heavily on tech groups in particular, driving gains on Wall Street this year.
A staggering seven stock market behemoths — Apple, Microsoft, Meta, Amazon, Alphabet, Nvidia and Tesla — have accounted for nearly half of the S&P 500’s gains this year, according to S&P Dow Jones Indices. All but Nivea dropped on Monday.
U.S. investors bought government debt on Monday, with the 10-year Treasury note down 0.07 percentage point to 4.55 percent. Fixed income results in contrast to prices.
More than $26 billion exited equity funds last week, including the largest outflow from emerging market stock funds in two years, according to data provider EPFR. Tech funds saw their biggest outflows since early 2023, and investor outflows from cryptocurrency funds hit a record high.
Investors put about $2.1 billion into bond funds and about $29 billion into low-risk money market funds, EPFR data shows.
With many on Wall Street off duty during the holiday season, trading volumes are lighter in the last two weeks of the year. The New York Stock Exchange opens on New Year’s Eve while the bond markets have a shorter trading day and both close on New Year’s Day.
