Wall Street fell sharply on Tuesday as weakness in big growth companies like Apple and the semiconductor sector weighed on the Nasdaq ahead of this week’s series of economic data and comments from Federal Reserve Chairman Jerome Powell.
The Dow Jones Industrial Average fell 404.64 points, or 1%, to $38,585.19, the S&P 500 fell 1.2% and the Nasdaq fell 1.7%.
Growth in the U.S. services industry slowed slightly in February due to job losses, data showed, but a measure of new orders rose to a six-month high, underscoring the sector’s underlying strength. Ta.
Despite the Fed’s 525 basis points worth of interest rate hikes since March 2022, the PMI was consistent with continued economic expansion.
A separate survey showed new orders for U.S. goods fell more than expected in January.
AI-driven gatherings on Wall Street gained momentum earlier this week as the focus shifted to fresh clues about the Fed’s monetary policy direction after signs of slowing inflation in February dampened hopes for an early interest rate cut. Lost.
After hitting a new intraday high on Monday, the benchmark S&P 500 closed slightly lower ahead of Chairman Powell’s testimony to Congress on Wednesday and Thursday.
“Before Chairman Powell’s remarks, and before we had a ton of labor market data, combined with perhaps justified nerves, some people were taking their chips off the table and the highs were on the rise,” said Kevin Gordon of Senior Investments. They may be trying to profit from it.” Strategist at Charles Schwab.
Craig Fehr, head of investment strategy at Edward Jones in St. Louis, said the two reports helped create a risk-off mood.
Fehr also attributed some of Tuesday’s weakness to recent gains. The benchmark S&P 500 hit a new intraday high on Monday, but closed slightly lower.
“It makes sense, even healthy, to make some pit stops along the way. This market is taking some breather after a very steep rally,” he said.
According to CME Group’s FedWatch tool, traders see a 67.2% chance that the first rate cut of the year will take place in June.
Among major companies, Apple faces increased competition from domestic rivals such as Huawei, falling 2.8% after a research report found iPhone sales in China fell 24% year-on-year in the first six weeks of 2024. did.
Other large-cap growth and tech stocks also fell, with Tesla dropping 3.9% after its European Gigafactory near Berlin halted production due to suspected arson.
A number of employment statistics are also expected to be released in the coming days, including an important non-farm payrolls report.
Target rises 12% after major retailer expects full-year comparable sales to beat expectations significantly, betting on same-day service, product launches and new membership programs to boost spending did.
MicroStrategy fell 21% after the Bitcoin developer announced a private placement of $600 million in convertible debt, with the proceeds to be used to buy Bitcoin.
