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

Published 03/04/2024, 07:42 PM
Updated 03/05/2024, 03:26 PM
© 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.)

Latest comments

All the good is released
So nothing good ever again!  As Jose said, "God  you bears are depressing people."
The 50% tech rout has begun.
  If you realize already that it "just keep bouncing off the dips to higher highs", then why hold your puts?  You know what they say about insanity.
You know how it is. Just following my gut.
   Been there, done that  ;-)
'Rally stalls' love the wording. So the rally will continue right?
Short seller report for Apple is a completely joke? I never of that short seller in China anyway, and who want to buy iphone at a short seller??
what In the actual f are you going on about?
WTF are you talking about?
100 points in losses whisked out of the system in the final 30 minutes.  One closing high after another, yet we can't have a single closing low in the BIGGEST INVESTMENT JOKE IN THE WORLD.  Always savvy "investors" coming out of the woodwork "in late trade".
IT'S A CONSPIRACY!!!
Market closed red, both yesterday and today.
So true. My friend Eddy and I used to get together and trade options. We'd hold our puts until the last few minutes of the session, to profit from the final dump. Doesn't exist anymore.
As bears flex muscles 🤭🤭
AI rally tomorrow, buy the dip
Mayve will go up because Powell's speech will turn out to be what was expected.
*  Maybe
so the market just goes down what it went up yesterday (which was for no reason) and OMG, the market is crashing!!??
Market "went up yesterday"!?
Markets are going to tank until all these big tech stocks lose at least 50% of their current value. Inflation going up, rates not coming down, Biden has pushed national debt so high with high interest rates that government is now accumulating over $1 trillion per year just on interest on the debt.
the potus does not set the interest rate. federal reserve is responsible for setting the interest rate.
 The Fed is responding to the damage caused by his policies, which have directly resulted in the massive rise in debt and inflation.
Dylan, which policies specifically do you feel have caused this inflation?
lol
Green energy grift running out, market pumped EV stocks and now dump them. ""Electric vehicles release more toxic emissions, are worse for the environment than gas-powered cars: study" Next is going to be AI grift. AI technology is not going to be able to be monetized in the way they claim. NVDA has a $2+ trillion market cap with only $20 billion revenue.
looks prime for a set up to tank 500 points tomorrow no matter what comes out of Powells mouth
Even rate cut or not , risk will remain higth with the World geopolitical tensions , regarding technical we are going to see a new record high before that moment,
The loss prevention team is on scene to contain the bleeding.  Losses hit floors, yet criminally manufactured "rallies" soar into the close.  Unlimited upside, mitigated downside, only in the US Ponzi Scheme.
IT'S A CONSPIRACY!!!
Falls are also manufactured then.
The rise of e-commerce is transforming retail markets.
Hedge funds are attracting more attention from investors.
When will savvy "investors" rush in to "snap up beaten down shares" today?  What a laughingstock.
Savy investors should be in real assets like Gold.
 Gold is just a piece of yellow rock. I'd better invest into a bread factory, you can still eat your rock.
This rock will persist when humanity perishes
Bond yields falling. Must be pricing in the imminent rate cuts. LOL
Whenever market is going down, just blame it on Powell
"Inch lower" honestly the financial wordsmithing that goes on!! Would nice to have a piece on failing banks and Gold at all time highs as investors wake up to the massive debt spiral we are now facing. Just putting it out there...no offense '-)
the sky is falling!
There's a whole lot going on right now that could drag on markets. Banks potentially collapsing next week. We're near the end of the rope on the debt negotiations. Wall Street will want you to believe Trump's popularity sweeping the nation today is a bad thing. Just like 2016, the narrative will be that the stock market will crash if he's elected, but they'll rally and take your put money. I lost 20 grand on the 2016 election. There's really nothing to rally the market this week. Why not some selling for a change?
Trump's "popularity" is indeed a very bad thing. HIs so-called "presidency" was a disaster.
Shift from stocks and push your money on Bitcoin
Awe Awe captain.
As there is so much value in Bitcoin?? The only value in Bitcoin is what the next person is willing to pay (that is called a Ponzi scheme imho). The only real users are criminals and gambling investors
Setting up the biggest trap in history.
Oh no wonder, Powell is gonna spew a pile.
I wonder when stocks will start inching lower because they are overvalued.
Should have been about 6 years ago...
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