US stocks dropped on Tuesday, pulling further away from record highs as uncertainty over interest rate cuts and a shakeup in “Magnificent 7” stocks brought a note of wariness to the market.
Contracts on the tech-heavy Nasdaq Composite (^IXIC) led the declines, sinking about 1.8% as a retreat in Apple (AAPL) and Tesla (TSLA) continued to drag on stocks more widely.
Apple came under pressure after a report that iPhone sales fell 24% in China, adding to Monday’s loss in the wake of a $2 billion EU antitrust fine. Tesla continued to slump as a shutdown at its Berlin Gigafactory added to concerns over a shipment slump and a Chinese price war.
The S&P 500 (^GSPC) fell about 1%, while the Dow Jones Industrial Average (^DJI) moved roughly 0.8% lower after a losing start to the week.
Despite the broader market dip, bitcoin (BTC-USD) reached a fresh all-time high, briefly surpassing its previous record of $68,789 from November 2021. It’s since retreated to trade around $65,000 a coin.
The debate now is whether the tech gains behind the recent record-setting stock rally have reached their peak, as downbeat news saps the “FOMO” — fear of missing out — seen as keeping investors engaged.
At the same time, faith in coming easing by the Federal Reserve took a knock after comments by policymaker Raphael Bostic. The Atlanta Fed president said he sees just one rate cut this year, penciled in for the third quarter.
Investors are now even more focused on Fed Chair Jerome Powell’s testimony to Congress on Wednesday. His words will be closely watched for any change in the mantra that policymakers need to be convinced inflation is conquered before any move.
In corporates, Target (TGT) earnings beat Wall Street forecasts, helping shares pop more than 10% in afternoon trading.
In other news, SoFi Technologies (SOFI) plummeted around 13% after announcing a new debt offering, while Meta Platforms (META) dipped just over 1% following a wave of outages to its suite of social media platforms.
Overall, the market is facing uncertainty and volatility as investors navigate through a mix of positive and negative news impacting various sectors. Stay tuned for more updates as the market continues to evolve.
