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Stock Market Plunges: Can the Bulls Turn the Tide?

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The tumultuous start of 2024 has sent shockwaves across Wall Street, with all major stock averages bleeding red on the second trading day of the year.

As the clock struck noon in New York, the tech-heavy Nasdaq 100 nosedived by 1%, pushing its two-day slump to 2.6%, without any reprieve for the blue-chip stocks of the Dow Jones, which had managed to evade losses on Tuesday. The S&P 500 index is on the brink of closing a dismal third consecutive day, a bearish stretch unseen since late October.

Even small-cap stocks, the darlings of the late 2023 rally, are underperforming, with the iShares Russell 2000 ETF IWM plummeting by 1.6%. Meanwhile, the CBOE Volatility Index or VIX, a market fear gauge, has soared by 6.5% on the day.

Amid the chaos, Richmond Federal Reserve President Tom Barkin urged caution, warning the markets against unwarranted confidence in a soft landing for the U.S. economy, and hinting at potential additional rate hikes.

Economic data paints a mixed picture, with the ISM manufacturing PMI ticking in at 47.4 in December, slightly higher than the anticipated 47.1, while job openings in November totaled 8.79 million, trailing behind the expected 8.85 million.

Despite the gloom, the U.S. dollar index rallied by 1.3%, marking its most robust daily performance since early March 2023, whereas Treasury yields largely held steady.

Explosions in Iran, resulting in over 100 casualties, and protests disrupting output at Libya’s 300,000-barrel-a-day Sharara oilfield have stoked an oil rally, with WTI climbing by 2.5%. However, precious metals have taken a hit, with gold down by 1.3% and silver by 3%. Cryptocurrencies also suffered substantial losses, with Bitcoin BTC/USD plummeting by 5%, amid reports of a delay in the SEC’s approval of Bitcoin ETFs.

State of the Market

Index Price %
Dow Jones 37,454.25 -0.7%
S&P 500 4,708.05 -0.7%
Nasdaq 100 16,382.80 -1.0%
Russell 2000 1,979.28 -1.8%

The SPDR S&P 500 ETF TrustΒ SPY is 0.8% lower at $469.02, the SPDR Dow Jones Industrial Average ETF DIA decreased by 0.7% andΒ the Invesco QQQ Trust QQQ tumbled 1% to $398.69, as per Benzinga Pro data.

In terms of sectors, the Energy Select Sector SPDR Fund XLE is the lone survivor, up by 0.9%. Rate-sensitive sectors such as the Real Estate Select Sector SPDR Fund XLRE, the Consumer Discretionary Select Sector SPDR Fund XLY, and the Technology Select Sector SPDR Fund XLK lagged, all down by 1.6%, 1.4%, and 1% respectively.

Among industries, the VanEck Oil Services ETF OIH outperformed, up 1%. In sharp contrast, solar stocks, as tracked by the Invesco Solar ETF TAN, are sharply lower, down 4.5%.

Top Stock Movers

  • Tesla Inc. TSLA spiraled 3.4%, marking a four-day losing streak after relinquishing its top spot in electric vehicle sales to China’s BYD.
  • Enphase Energy Inc. ENPH tumbled over 7% amidst a broader solar sector sell-off, emerging as the worst performer within the S&P 500.
  • SoFi Technologies SOFI slumped 13% after Keefe, Bruyette & Woods slashed its rating from Market Perform to Underperform and revised its price target fromΒ $7.50 toΒ $6.50.
  • Blackstone Inc. BX plunged 4% following a downgrade from Buy to Neutral by Goldman Sachs.

Read now: A Glitch In The Rally? Cruise Operators And Chip Stocks Targeted In Profit Taking

Photo via Shutterstock.

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