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U.S. stocks fell for the second straight trading session as investors took advantage of strong equity market gains in 2024.
The broad S&P 500 index fell 0.7 percent Monday afternoon in New York, while the tech-heavy Nasdaq Composite fell 0.8 percent. Stocks also fell significantly on Friday, with investors selling shares of big tech stocks that had seen big gains through much of 2024.
Monday’s selling was widespread, with about 90 percent of stocks tracked by the S&P 500 falling, according to FactSet data. Aerospace group Boeing fell 2 percent after the fatal crash of a 737-800 plane in South Korea over the weekend. U.S. airlines also fell, with United Airlines falling by roughly the same margin.
Big tech companies including chipmaker Broadcom, business software group Oracle and PC maker Dell, as well as Elon Musk’s electric car maker Tesla, also fell as investors continued to sell off. ‘away from some of the biggest winners of the year.
The S&P 500 is still up 24 percent in 2024 despite Monday’s pullback, with the Nasdaq up nearly 30 percent.
Thomas Lee, of research firm Fundstrat, said the wave of selling was the result of “profit-taking” as investors recalibrated their portfolios at the end of a strong year for investors. actions. He noted that the Federal Reserve also unnerved investors this month by forecasting just two quarter-point rate cuts next year, half of its September estimate.
Torsten Sløk, chief economist at Apollo, echoed Lee’s sentiment, saying that fears that interest rates would remain high for longer than expected had weighed particularly heavily on technology groups, which fueled Wall Street’s gains. This year.
The so-called Magnificent Seven stock giants — Apple, Microsoft, Meta, Amazon, Alphabet, Nvidia and Tesla — generated about half of this year’s gains on the S&P 500, according to the S&P Dow Jones Indices. All but Nvidia fell on Monday.
U.S. investors bought government debt on Monday, sending the yield on the 10-year Treasury note down 0.06 percentage points to 4.56 percent. Returns on fixed income securities move inversely to prices.
More than $26 billion was withdrawn from equity funds last week, including the largest outflow in about two years from developed market equity funds, according to data provider EPFR. Investor withdrawals from cryptocurrency funds hit a record high, while tech funds marked their longest streak of exits since early 2023.
Investors also put about $2.1 billion into bond funds and nearly $29 billion into low-risk money market funds, according to EPFR data.
Trading volumes are typically light during the last two weeks of the year as many people on Wall Street and elsewhere take time off work during the holiday season. The New York Stock Exchange will be open on New Year’s Eve while the bond markets will have a shortened trading day, and both will be closed on New Year’s Day.
