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Stock market today: S&P 500 slumps as tech rally stalls ahead of Powell testimony


Stock market today: S&P 500 slumps as tech rally stalls ahead of Powell testimony By Investing.com

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AuthorYasin EbrahimStock Markets

Published Mar 04, 2024 07:42PM ET
Updated Mar 05, 2024 03:26PM ET

© Reuters.

Investing.com — The S&P 500 fell Tuesday, as investors continued to holster bullish bets on big tech just a day ahead of Federal Reserve chairman Jerome Powell testimony before Congress that will likely echo recent remarks from Federal Reserve members cautioning on cutting rates too soon.   

By 16:00 ET (21:00 GMT), the benchmark S&P 500 fell 1%, the tech-heavy Nasdaq Composite slumped 1.7%, and the blue-chip Dow Jones Industrial Average fell 1%, or 404 points.

Powell likely to urge caution on cutting rates too soon 

Federal Reserve Chair Jerome Powell  is set to offer a two-day testimony before Congress on Wednesday and Thursday that will likely echo the need for patience on rate cuts.

“Tomorrow, Fed Chair Jerome Powell will testify before Congress. We expect him to be consistent with recent comments from other FOMC members, suggesting that rate cuts may be delayed but are still likely to start in 2024,” Brian Rose, Senior US Economist, UBS Global Wealth Management, commented.

Several Fed officials warned against bets on early rate cuts by the central bank, citing concerns over sticky inflation and resilience in the U.S. economy. Atlanta Fed President Raphael Bostic said on Monday that persistent bets on early Fed rate cuts could trigger an increase in inflationary pressures. 

Still, analysts expect that the Fed will have enough conviction by June to begin trimming rates. 

Along with Powell’s testimony, the focus this week is also on key nonfarm payrolls data for February.

Big tech slips as Tesla, Apple weigh; AMD cuts losses

Tesla (NASDAQ:TSLA) fell 4% after the electric vehicle giant said shipments of its China-made cars fell by19% year-on-year to 60,365, the lowest level since December 2022, following disruptions caused by the Lunar New Year holidays.

The drop came as the firm engaged in a bitter price war with its Chinese peers to capture the world’s largest EV market.

Chip stocks, which have played a pivot role in the rally so far, recovered lost ground as Advanced Micro Devices (NASDAQ:AMD) pared losses despite Bloomberg News reporting that the U.S. government had placed a hurdle in front of the company’s effort to sell an artificial intelligence chip designed for the Chinese market.

Apple Inc (NASDAQ:AAPL), meanwhile, fell more than 2% after short-seller Counterpoint Research said iPhone sale had plunged 24% in China amid rising competition local firms including Huawei and Xiaomi (OTC:XIACF). Despite the “dismal” sentiment on Apple amid China headwinds, Wedbush said on optimism that Apple will likely still meet expected iPhone sales, while its “rock solid” services business will also provide a cushion. 

Target shines, but Stitch Fix falters on earnings stage

Target (NYSE:TGT) reported adjusted per-share income in the fourth quarter that topped average analyst estimates, sending its shares more than 12% higher. The big-box retailer also detailed plans to launch new paid membership program in an effort to keep sales robust amid increasingly wary consumer. 

Stitch Fix (NASDAQ:SFIX) fell 21% after the personal styling service provider cut its full-year revenue outlook after reporting fiscal Q2 results that missed Wall Street estimates as active users slumped.   

Bitcoin in violent reversal after notching new all-time high 

Bitcoin fell more 7% after hitting an oil time high of $68,874 as investors appeared to take profit on the popular crypto. Crypto-related names including Coinbase Global Inc (NASDAQ:COIN), Marathon Digital Holdings Inc (NASDAQ:MARA) and MicroStrategy Incorporated (NASDAQ:MSTR) plunged, with the latter falling more than 11% following added pressure amid plans to sell $600 million in convertible senior notes.

(Scott Kanowsky, Ambar Warrick contributed to this report.)

Stock market today: S&P 500 slumps as tech rally stalls ahead of Powell testimony

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