Wall Street Dips as ‘Magnificent 7’ Weighs Heavily on Market
Wall Street ended the week lower, impacted by declines in major tech stocks, raising concerns about market stability.
New York, USA, Wall Street, S&P 500, Tech Stocks, Nvidia, Microsoft, Amazon, Best Buy, Inflation
New York: Stocks took a hit on Friday, wrapping up a short holiday week on a low note. The big tech players, known as the “Magnificent 7,” really dragged the market down.
The S&P 500 dropped by 66.75 points, which is about 1.1%. Almost all the stocks in that index lost value, but it still managed a slight gain for the week overall.
The Dow Jones fell by 333.59 points, or 0.8%, while the Nasdaq composite dropped 298.33 points, around 1.5%. It was a tough day for tech stocks.
Retailers weren’t faring much better either. Amazon and Best Buy both slipped by 1.5%. Everyone’s keeping a close eye on how they did during the holiday shopping season.
On the flip side, energy stocks held up a bit better, only losing less than 0.1% as crude oil prices went up.
Adam Turnquist from LPL Financial mentioned there’s some uncertainty about the recent rally we’ve seen. The S&P 500 had a nice gain of nearly 3% over three days before the holiday break, but it took a step back on Thursday.
Even with Friday’s drop, the market is still looking at a strong finish for the year. The S&P 500 is on track for a gain of about 25% in 2024, which would be the second year in a row with over 20% gains.
This growth is partly due to positive economic data showing that consumers are still spending and the job market is holding strong. Inflation is still high but seems to be easing up a bit.
A report released on Friday showed a slight dip in sales and inventory estimates for the wholesale trade industry, which wasn’t what people were hoping for. This follows a labor market update that showed unemployment benefits stayed steady last week.
All this good economic news and easing inflation have led to a shift in the Federal Reserve’s interest rate policy this year. There’s also been talk of potential interest rate cuts, which have helped boost the market.
Even though inflation is getting closer to the Fed’s target of 2%, it’s still above that mark, and there are worries it could heat up again, which is making folks cautious about future rate cuts.
Looking ahead to 2025, there are uncertainties about the labor market and economic policies under the incoming President Donald Trump. Concerns are rising that his policies could lead to higher inflation and challenges for global trade.
Amedisys saw a nice bump of 4.7% after they agreed to extend the deadline for their sale to UnitedHealth Group, despite some legal hurdles.
In Asia, Japan’s stock market surged as the yen weakened against the dollar, while South Korea’s stocks fell after political turmoil.
Meanwhile, European markets gained some ground, and bond yields stayed pretty steady. The yield on the 10-year Treasury rose slightly, while the two-year Treasury yield remained unchanged.
Next week, Wall Street will be looking forward to more economic updates, including reports on home sales and construction spending.