U.S. stocks fell on Tuesday, falling further from their record highs, as uncertainty over interest rate cuts and continued strength in technology stocks instilled some caution in the market.
The S&P 500 (^GSPC) slipped about 0.4%, while the Dow Jones Industrial Average (^DJI) fell about 0.3% after a losing start to the week. Contracts on the tech-heavy Nasdaq Composite (^IXIC) fell about 0.8% as a sustained decline in Apple (AAPL) and Tesla (TSLA) continued to weigh on stocks overall.
The debate now is whether tech gains have peaked behind the recent record-breaking stock rally, as bad news erodes the “FOMO” – the fear of missing out – seen as a stimulus to motivate investors.
In early trading, Apple came under pressure after it reported that iPhone sales in China fell 24%, exacerbating Monday's loss as a result of a $2 billion EU antitrust fine. Tesla continued to slump as the closure of its Berlin Gigafactory heightened concerns about a drop in deliveries and a price war in China.
At the same time, belief in the Federal Reserve's impending monetary easing took a hit following comments from policymaker Raphael Bostic. The Atlanta Fed president said he expects only one rate cut this year, scheduled for the third quarter.
Investors are now even more focused on Fed Chairman Jerome Powell's testimony to Congress on Wednesday. His words will be watched closely to see if the mantra that policymakers must be confident that inflation has been overcome before every move changes.
Meanwhile, Bitcoin (BTC-USD) hit a new all-time high, briefly surpassing its previous record of $68,789 set in November 2021. It has since declined and is at around $67,000 per coin.
In corporate bonds, Target's (TGT) earnings beat Wall Street forecasts and helped shares rise more than 10% in early market trading.
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Tue, March 5, 2024 at 3:15 p.m. GMTThe Macro Setup and Election Season
It's a day full of Super Tuesday analysis from various market experts and other experts.
So why not join in the fun here at Yahoo Finance?
Good news just landed in my inbox from one of my favorite economists, Michael Schumacher of Wells Fargo. I found it helpful to see him thinking about potential market moves months before the election, with a particular focus on fiscal and monetary policy.
Schumacher's thoughts.
Republican sweep
“In our view, a Republican victory is the scenario that would result in the largest increase in the Treasury’s deficit and funding needs after 2025. We expect looser fiscal policy under a Trump administration, particularly if Republicans gain control of Congress. President Trump would most likely do this.” He would like to extend, if not expand, his previous tax cuts. We expect this scenario to have the largest impact on the Treasury term premium and yield curve (e.g. 5/30). As noted, if Trump wins big in the next few weeks, the curve will likely steepen and a Republican victory will become increasingly likely.”
Democratic momentum
“This scenario also appears to involve a larger deficit and a steeper Treasury curve, although to a lesser extent than if the Republicans win.” Our economists say: “Even if Democrats win on Election Day, we doubt they will concede would mean that the TCJA expires completely.” It is conceivable that the tax rates for top earners will rise even more. In addition, corporate tax increases are also more likely in this scenario. Although some of the individual income tax provisions are likely to expire as planned, we expect more sensible spending packages to accompany the expiration of the tax cuts.”
Tue, March 5, 2024 at 2:32 p.m. GMTStocks continue to fall from their record highs
US stocks fell on Tuesday, falling again from their record highs.
At the opening bell, the S&P 500 (^GSPC) slipped 0.4%, while the Dow Jones Industrial Average (^DJI) fell about 0.3% after a losing start to the week. Contracts on the tech-heavy Nasdaq Composite (^IXIC) fell about 0.8% as Apple (AAPL) and Tesla (TSLA) continued to decline.
- Tue March 5, 2024 at 12:30 GMT
It's Super Tuesday, the CEO of Target mentions the word election
Super Tuesday is unlikely to move markets.
Totally get it, plus there's a lot more happening in the markets this week, from wild moves in Bitcoin to the drop in Tesla (TSLA) stock.
But at some point this year, the upcoming contentious presidential election in the US will move markets. That's why I'm expecting comments from leaders on the election today to help investors navigate the murky waters over the next few months.
Target (TGT) Chairman and CEO Brian Cornell, who I last saw in person at the White House a few months ago before a meeting with the Biden administration, didn't tell me much about his macroeconomic views on Super Tuesday. However, in a phone conversation, he gave me just enough information to start thinking about how consumer stock trading might evolve in the months leading up to November.
This is what he told me:
“We’re watching it [the election] like you are, really careful. We looked at past trends during election years. I think that we can bring a little joy to our guests in uncertain times. Make sure we make Target a special place for them to shop, filled with relevant products and great value. But we know they will continue to use and we want to be a target during what can be a very challenging and uncertain time.”
Tue, March 5, 2024 at 3:15 p.m. GMT
Tue, March 5, 2024 at 2:32 p.m. GMT