Tech led a slide in US stocks on Monday, while the dollar and bond yields climbed amid fading hopes for interest-rate cuts ahead of this week’s key consumer inflation report.
The S&P 500 (^GSPC) sank 0.8%, while the Nasdaq Composite (^IXIC) tumbled about 1.6%. But the Dow Jones Industrial Average (^DJI), which includes fewer tech stocks, wavered along the flat line.
Stocks are shaping up for another rough session after Friday’s plunge, which wiped out all year-to-date gains for Wall Street’s major gauges. A hot December jobs report has rattled markets, spurring concern that signs of strength in the economy will encourage the Federal Reserve to keep rates higher for longer.
As of 9:53:33 AM EST. Market Open.
^DJI ^IXIC ^GSPC
The 10-year Treasury yield (^TNX) added to recent gains to touch a 14-month high, trading not far off 4.8% as US bonds sold off. Meanwhile, the dollar (DX-Y.NYB) surged to a two-year high against major currency peers, with the UK pound (GBPUSD=X) in particular coming under pressure.
As of Monday, traders are betting there will be no rate cut until at least September, per the CME FedWatch tool, and that the Fed will lower borrowing costs by just 30 basis points in the whole of 2025.
That has intensified the spotlight on the Consumer Price Index reading for December, due on Wednesday, given one big concern for markets is that inflation won’t cool to the central bank’s 2% target.
Adding to the gloom, oil prices rose to their highest levels in five months before paring gains after the US imposed tougher sanctions on Russia’s crude industry, threatening supply to China and India. Brent (BZ=F) briefly climbed more than 2% to trade above $81 a barrel, while West Texas Intermediate (CL=F) changed hands near $78.
Shares of Nvidia (NVDA), Apple (AAPL), and Tesla (TSLA) slid as all the “Magnificent Seven” tech megacaps lost ground in the market turmoil. Europe’s largest pension fund revealed that it sold its entire stake in Tesla over CEO Elon Musk’s pay package.
Elsewhere in corporates, Moderna (MRNA) stock plunged over 22% after the biotech giant cut its 2025 sales forecast by $1 billion amid soft demand for vaccines.
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Stocks slide as hopes of rate cuts fade
Stocks opened lower on Monday with tech leading the losses as optimism over interest-rate cuts this year continued to fade and bond yields rose.
The S&P 500 (^GSPC) sank 0.8%, while the Nasdaq Composite (^IXIC) dropped 1.3%. The Dow Jones Industrial Average (^DJI) fell about 0.1%.
Stocks continued their sell-off from Friday’s plunge, which wiped out all year-to-date gains for the major averages.
A hot December jobs report spooked the markets as investors faced the probability the Federal Reserve will make just two rate cuts this year.
Among Monday’s laggards, shares of Nvidia (NVDA) and Tesla (TSLA) slid more than 3% and 2% respectively, as the “Magnificent Seven” group lost ground in the market sell-off.
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