U.S. stocks fell on Tuesday, further away from their record highs, as uncertainty over interest rate cuts and volatility in Magnificent 7 stocks spooked the market.
The tech-heavy Nasdaq Composite Index (^IXIC) contract led the decline, down about 1.8% as declines in Apple (AAPL) and Tesla (TSLA) continued to weigh on stocks broadly.
Apple is under pressure after reports that iPhone sales in China have fallen 24%, and its losses widened on Monday after a $2 billion antitrust fine by the European Union. Tesla’s sales continued to slump due to sluggish shipments due to the closure of its Gigafactory in Berlin and growing concerns about price competition in China.
The S&P 500 (^GSPC) was down about 1%, and the Dow Jones Industrial Average (^DJI) was down about 0.8% after falling since the start of the week.
Despite widespread market declines, Bitcoin (BTC-USD) hit a new all-time high, briefly surpassing its November 2021 record of $68,789. It has since retreated and is now trading around $65,000 per coin.
The debate now is whether the tech profits behind recent record stock gains have peaked. This comes as bad economic news dampens the “FOMO” (fear of missing out) that is expected to keep investors interested.
At the same time, confidence in the Fed’s future easing has been shaken following comments from policymaker Rafael Bostic. The Atlanta Fed president said there will be only one rate cut this year, scheduled for the third quarter.
Investors are now paying more attention to Fed Chairman Jerome Powell’s testimony to Congress on Wednesday. His words will be closely watched to see if they change the belief that policymakers need to be confident that inflation will be overcome before taking action.
In companies, Target (TGT)’s earnings beat Wall Street expectations, sending its stock soaring more than 10% in afternoon trading.
live7 updates