In a tumultuous trading session on Tuesday, US benchmark equity indexes registered a decline, primarily influenced by the downturn of notable mega-cap stocks. The Nasdaq Composite fell 1.9%, closing at 19,489.7, while the S&P 500 dropped 1.1% to finish at 5,909. Meanwhile, the Dow Jones Industrial Average saw a decrease of 0.4%, ending the day at 42,528.4.
Technology stocks faced the most significant declines across all sectors, though materials remained relatively stable. The only sectors that closed higher were energy and health care, indicating a shifting landscape for investors. Among the major stocks, Nvidia experienced a substantial dip, with shares slipping 6.2%, marking the largest drop on the Dow and contributing notably to the declines seen on both the S&P 500 and the Nasdaq.
Other tech giants such as Amazon.com, Microsoft, and Apple also struggled, marking their positions among the worst performers on the Dow. Tesla shares witnessed a 4% decline, representing one of the steepest drops within the S&P 500, alongside declines for Alphabet and Netflix. In a strategic move, Meta Platforms announced the discontinuation of its third-party fact-checking program in the US, focusing instead on a personalized approach to political content.
Despite this, shares in the parent company of Facebook and Instagram fell by 2% amidst concerns over regulatory impacts. In contrast, drug manufacturer Moderna emerged as a bright spot on the S&P 500, with shares climbing nearly 12%. This performance starkly contrasts the broader trend, illustrating the volatility in the market. Further notable activity occurred when Paychex finalized a $4.1 billion acquisition deal for Paycor HCM, aimed at enhancing its market position in human resources and payroll solutions, while also expanding its artificial intelligence capabilities.
Following this announcement, Paychex shares rose 2.4%, reflecting positive market sentiment, although Paycor’s shares fell by 3%. Economic indicators also unfolded on Tuesday, with the US 10-year yield increasing by 7.7 basis points to reach 4.69%, and the two-year rate gaining 2.9 basis points to 4.3%.
On the economic front, the US services sector expanded at a rate that exceeded expectations last month, as indicated by data from the Institute for Supply Management. This expansion signals a potential rebound as business activity picks up. According to Jefferies, the improvement in the services purchasing managers’ index is encouraging, especially as numerous other data sets have begun to show signs of weakness.
On Monday, data from S&P Global confirmed that the services industry had reached a 33-month high. Moreover, US job openings rose in November to their highest level in six months, while layoffs saw only a slight increase, based on government data released on Tuesday. Meanwhile, the trade deficit in the US grew in November, primarily due to imports outpacing export growth, as reported by the Census Bureau and the Bureau of Economic Analysis. During the 2024 holiday season, online shopping surged, marking a record high, with most e-commerce transactions occurring on mobile devices, as artificial intelligence drove increased clicks to retail sites, according to analysis from Adobe.
In terms of commodities, West Texas Intermediate crude oil saw a 1% increase, ending the day at $74.27 a barrel. Gold prices advanced by 0.7%, reaching $2,664.80 per troy ounce, while silver rose by 0.2% to close at $30.65 per ounce. These movements highlight ongoing fluctuations in commodity markets, reflective of broader economic trends..