Volatility Strikes: Dow Plunges by 300 Points, Nasdaq Sees 2nd Consecutive Daily Decline in 2024 – Live Updates
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Title: Nasdaq Composite Extends Decline, Dragging Tech Stocks Lower Amidst Uncertainty Over Monetary Policy
Introduction:
In the wake of a disappointing start to the year, the Nasdaq Composite continued its downward trajectory, experiencing its second consecutive session of losses. The index closed 1.18% lower at 14,592.21, marking its fourth consecutive day of decline. Furthermore, the S&P 500 slipped 0.80% to close at 4,704.81, while the Dow Jones Industrial Average fell by 284.85 points, or 0.76%, ending at 37,430.19.
Tech Stocks Lead the Decline:
The Nasdaq’s decline can largely be attributed to the diminished performance of major technology stocks. Apple, in particular, experienced a significant setback, with its stock plummeting by 4% after being downgraded by Barclays. Similarly, other tech stalwarts such as Nvidia, Tesla, and Meta also witnessed a decline in their stock prices, contributing to the overall downturn in the market.
Rise in U.S. 10-Year Treasury Yield:
Another factor that contributed to the market pullback was the temporary rise in the U.S. 10-year Treasury yield above 4%. This increase in bond yields caused investors to sell off their tech holdings, particularly those that had performed well in the previous year. These actions were driven by expectations of easing monetary policy, although uncertainties surrounding the timing of rate cuts by the Federal Reserve have somewhat dampened enthusiasm.
Mixed Sentiments Among Analysts:
Despite the short-term corrections and market volatility, there are analysts who remain optimistic about the market’s long-term outlook. The past year witnessed a strong rebound for all major averages, with impressive gains posted by the S&P 500 and Nasdaq. However, concerns and uncertainties about the Federal Reserve’s future rate cuts continue to linger.
Fed’s Monetary Policy Update:
Investors’ reactions were also influenced by the release of the Federal Reserve’s latest meeting minutes, which revealed that the central bank is not yet ready to implement rate cuts. The minutes highlighted the importance of maintaining a cautious and data-dependent approach to monetary policy decisions. It further stated that a restrictive stance would be appropriate until inflation demonstrated clear signs of sustainable reduction. Although officials indicated the possibility of three quarter-percentage point cuts sometime this year, the timing of these cuts remains uncertain.
Conclusion:
The Nasdaq Composite’s poor start to the year, accompanied by the decline in major technology stocks, reflects the market’s uncertainty surrounding monetary policy decisions amidst expectations of easing. Investor sentiment has been affected by the Federal Reserve’s indication to maintain a cautious approach and its reluctance to decrease rates at present. While there are analysts who remain positive about the market’s long-term prospects, the current market volatility reinforces the need for investors to remain vigilant and data-dependent during these uncertain times.
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