The New York Stock Exchange saw a tumultuous day on April 1, 2024, as the Dow Jones Industrial Average fell for a second consecutive day, signaling a lackluster start to the quarter for Wall Street. Traders were on edge as bond yields increased and expectations for a Federal Reserve interest rate cut in June dwindled.
The 30-stock Dow plummeted 474 points, or 1.2%, with the S&P 500 and Nasdaq Composite also experiencing significant declines of 1% and 1.4%, respectively. This rough start to the second quarter was attributed to sticky inflation data from the previous week and strong economic indicators on Monday, which pushed yields higher and reduced the likelihood of a rate cut by the Fed.
Greg Bassuk, CEO of AXS Investments, described the market’s reaction as a “one-two punch” of inflation data and profit-taking following significant gains in the first quarter. Despite the sell-off, Sarat Sethi of Douglas C. Lane & Associates remained optimistic, calling it a “natural digestion” after rapid market growth.
The market losses were further exacerbated by disappointing first-quarter deliveries from Tesla, leading to a 5.5% plunge in their stock. Tech giants like Nvidia, Alphabet, and Microsoft also saw declines of around 1%. Additionally, health insurers took a hit after the Centers for Medicare & Medicaid Services announced a 3.7% increase in payments for Medicare Advantage and prescription drug coverage in 2025, causing stocks of companies like Humana, UnitedHealth, and CVS Health to tumble.
With odds for a June rate cut now below 60%, the focus shifts to whether the momentum of the market’s strong start to 2024 can be sustained if the Fed maintains its current stance on interest rates. As investors navigate these uncertainties, the volatility on Wall Street is expected to continue in the coming days.
