Sarah Travers
Wall Street faced a tumultuous day on Tuesday as major indices tumbled, marking the worst day in three weeks for the stock market. The S&P 500 fell by 1%, its second consecutive decline after hitting an all-time high last week. The Dow Jones Industrial Average also dropped by 1%, while the tech-heavy Nasdaq composite saw a 1.7% decline.
The decline was largely driven by a sell-off in Big Tech stocks, with companies like Apple, Microsoft, Amazon, and Tesla all experiencing significant drops. Apple, in particular, saw its stock price fall by 2.9% due to concerns over sluggish iPhone sales in China. Similarly, Microsoft, Amazon, and Tesla saw declines of 3.3%, 2.3%, and 4.5%, respectively, contributing to the overall market downturn.
MicroStrategy, a business intelligence firm, announced plans to raise $600 million in debt to buy more bitcoin and for general corporate purposes. This news caused its stock to plummet by 17.4%. Meanwhile, Bitcoin briefly reached a record high above $69,000 before pulling back to around $60,000. The surge in Bitcoin’s price was attributed in part to the introduction of new exchange-traded funds offering easier access to the cryptocurrency.
Despite the overall decline, there were some bright spots in the market. Target reported better-than-expected profit for the end of 2023, leading to an 11.8% increase in its stock price. New York Community Bancorp also saw its stock rise by 17.6% after plunging 23% the previous day. The bank faced pressure due to losses related to commercial real estate investments and regulatory scrutiny.
Investors are closely watching economic indicators for signs of potential interest rate cuts. A report showing slower growth in U.S. construction and services industries led traders to bet on rate cuts starting in June. The yield on the 10-year Treasury fell to 4.13% from 4.22% in response to the news.
In international markets, Hong Kong’s Hang Seng index dropped by 2.6% after China’s premier announced an economic growth target of around 5% for the year. Additionally, China plans to issue 1 trillion yuan (US$139 billion) in long-term bonds for various purposes. Stocks in Shanghai rose by 0.3%, while indexes in other parts of the world were slightly lower.
Overall, the market remains volatile as investors weigh concerns over inflation and potential interest rate hikes against hopes for continued economic growth. The Federal Reserve’s upcoming decisions on interest rates will likely have a significant impact on market performance in the coming months.
