U.S. stocks fell on Tuesday, giving Wall Street a poor start to 2024 after a successful year in which the S&P 500 fell just short of a new record high.
The benchmark S&P 500 (^GSPC) lost almost 0.6%, while the Dow Jones Industrial Average (^DJI) rose just above zero. The tech-heavy Nasdaq Composite (^IXIC) led the losses, down nearly 1.6%.
The stock rally stalled on Friday after posting two months of gains that helped key indicators end 2023 with strong annual gains. Additionally, the S&P 500 posted its ninth consecutive weekly win, its longest streak since 2004, and is slowly approaching its all-time closing high of 4,796.56.
Tech stocks lost ground after Barclays analysts downgraded their rating on Apple shares, citing concerns about demand for new iPhones. Shares of Apple (AAPL) fell nearly 4% as technology stocks fell.
Economic data this week could also test the rally as Friday's December jobs report is examined for its potential to influence the Federal Reserve's thinking. Investors' bets that interest rate cuts in 2024 will be swift and deep have boosted stocks.
Read more: What the Fed's pause on rate hikes means for bank accounts, CDs, loans and credit cards
Elsewhere, oil prices rose after Iran sent a warship to the Red Sea in response to the U.S. Navy sinking of three Houthi boats over the weekend. West Texas Intermediate (CL=F) and Brent crude (BZ=F) futures rose over 1% as tensions escalated.
Meanwhile, Bitcoin prices rose nearly 3% to above $45,000 for the first time since early 2022 as hopes grew that the SEC will soon approve a spot Bitcoin ETF.
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Tue, Jan 2, 2024 at 9:04 p.m. GMTStocks are falling to start 2024
The new year began with a pullback as Wall Street retreated from a year-end rally driven by declines in the technology sector.
The benchmark S&P 500 (^GSPC) lost almost 0.6%, while the Dow Jones Industrial Average (^DJI) rose just above zero. The tech-heavy Nasdaq Composite (^IXIC) led the losses, down nearly 1.6%.
- Tue, Jan 2, 2024 at 8:52 p.m. GMT
Bitcoin extends its rally until 2024
Bitcoin (BTC-USD), the dominant cryptocurrency, surpassed $45,000 on Tuesday, reaching levels not seen since spring 2022 and adding to the optimism underlying a year-end rally.
The digital currency rose nearly 3% in afternoon trading. Overall, the crypto market rose almost 2%, reaching a total market capitalization of $1.7 trillion.
The surge early in the new year is based on the speculative but growing chance that U.S. spot Bitcoin ETFs will list later this month, Yahoo Finance's David Hollerith reports.
As with similar crypto runs in the past, the increasing awareness and popularity of holding digital assets is serving as a boost to an asset class that has been on the sidelines for many years. The release of new crypto financial products has also historically coincided with an increase in crypto prices.
For cryptocurrency advocates, the late-year rally was seen as a way for the industry to overcome the wave of scandals that rocked some of its biggest players and weighed heavily on digital assets.
- Tue, Jan 2, 2024 at 7:52 p.m. GMT
The next jobs report shows how the year 2023 ended
The December jobs report is scheduled to be released Friday morning and will provide the latest glimpse into the strength of the labor market after the Federal Reserve completes its tightening campaign in late 2023.
The report is expected to show that 168,000 nonfarm jobs were added to the U.S. economy in December as the unemployment rate rose according to Bloomberg data to 3.8%. In November, the US economy added 199,000 jobs while the unemployment rate unexpectedly fell to 3.7%.
“We do not expect a sharp decline in employment yet, but remain cautious heading into 2024,” the Jefferies economic team led by Thomas Simons wrote in a research note on Friday. “With the UAW strike finally behind us, we expect the volatility in manufacturing payrolls that we have seen in recent months to moderate.”
Greater hopes that the Federal Reserve will achieve a “soft landing” — in which inflation cools to 2% without a recession — fueled the stock market rally to close out 2023, Yahoo Finance's Josh Schafer reports. Another crucial part of the story was that the job market held up stronger than many expected. The final snapshot of the year could well support this narrative.
- Tue, January 2, 2024 at 7:00 p.m. GMT
Stock trends in afternoon trading
Here are some of Yahoo Finance's top stocks Trend ticker Page during afternoon trading on Tuesday:
Moderna (MRNA): Shares of the pharmaceutical company rose sharply on Tuesday afternoon after Oppenheimer upgraded the stock to Outperform and raised its price target to $142 per share, a rise of more than 40% from Friday's closing price. Shares rose 15%.
Apple (AAPL): The tech giant slipped after Barclays downgraded the iPhone maker and cut its stock price target on fears of a slowdown in iPhone 15 sales in China. The iPhone maker fell 3%.
MicroStrategy (MSTR): Shares of the software company with Bitcoin holdings rose 10% on Tuesday afternoon, joining other companies with ties to cryptocurrencies in a New Year's rally.
Bitcoin (BTC USD): Prices for the dominant cryptocurrency topped $45,000 on Tuesday, marking the first time the digital currency has surpassed that benchmark since April 2022. Bitcoin prices rose by almost 5%.
- Tuesday, January 2, 2024, 6:32 p.m. GMT
Tesla stock rises after deliveries decline
Tesla (TSLA) shares hovered above the flat line on Tuesday after releasing new delivery numbers that showed the all-electric automaker set a record in the fourth quarter and hit its 2023 delivery target.
For the fourth quarter, Tesla reported 484,507 deliveries, beating Wall Street estimates of 483,173 compiled by Bloomberg. The number marks an all-time record quarter for Tesla, up nearly 20,000 units from the previous record quarter of 466,000 units shipped in the second quarter of last year, Yahoo Finance's Pras Subramanian reports.
Tesla's stock price has more than doubled in 2023, helping to drive growth in Magnificent Seven stocks and the broader market. But the company faces increasing competition, particularly in China, as rivals vie to capture market share for the next generation of vehicles.
BYD, the Chinese automaker, said it delivered 526,409 pure electric vehicles worldwide in the fourth quarter, surpassing Tesla for the first time. While Tesla delivered more electric vehicles in 2023, BYD is on track to take the title as the company expands its deliveries in mainland China and Europe.
“This was an important quarter for Tesla, delivering strong deliveries with significant momentum heading into 2024 as demand increased since the third quarter based on all of our global controls,” Wedbush analyst Dan Ives wrote in a note Customers after Tesla published delivery figures. “Prices in China were stable and even increased over the quarter as the price war in China has finally reached a calm phase, which is music to the ears of Tesla bulls.”
- Tue, Jan 2, 2024 at 5:32 p.m. GMT
Stocks fall in afternoon trading
Stocks were mostly in the red during afternoon trading on Tuesday as Apple (AAPL) fell earlier in the year.
The benchmark S&P 500 (^GSPC) lost almost 0.5%, while the Dow Jones Industrial Average (^DJI) gained about 0.2%, or around 60 points. The tech-heavy Nasdaq Composite (^IXIC) slipped 1.4%.
- Tue, Jan 2, 2024 at 4:45 p.m. GMT
Stock trends in morning trading
Here are some of Yahoo Finance's top stocks Trend ticker Page during morning trading on Tuesday:
Apple (AAPL): Tech stocks lost ground after Barclays analysts downgraded their rating on Apple shares, citing concerns about demand for new iPhones. Apple shares fell nearly 3% during Tuesday morning trading.
Tesla (TSLA): Tesla shares rose nearly 1% after the company set a new delivery record in the fourth quarter and met its 2023 delivery target. That helped the company shake off a third-quarter miss and calm investor concerns as competition in electric vehicle production increases.
Rivian (RIVN): The American electric vehicle maker slumped more than 9% on Tuesday morning after the company reported deliveries of nearly 14,000 vehicles in the fourth quarter of 2023, down about 10% from the previous three months' numbers.
Bitcoin (BTC USD): Prices for the dominant cryptocurrency topped $45,000 on Tuesday, marking the first time the digital currency has surpassed that benchmark since April 2022. Bitcoin prices rose by almost 6%.
Tue, January 2, 2024 at 4:30 p.m. GMTCrude oil prices rise as demand concerns overshadow Red Sea tensions
Crude oil futures pared earlier trading gains as demand concerns overshadowed rising tensions in the Red Sea.
The US manufacturing purchasing managers' index (PMI) fell to 47.9 in December, compared to 49.4 in the previous month. A reading below 50 indicates that the sector is contracting.
West Texas Intermediate (CL=F) traded as high as $73.64 a barrel before giving back those gains following the PMI release. Brent crude oil (BZ=F) rose to a session high of $79.04 a barrel.
Both WTI and Brent were trading around the zero line at 11:00 a.m. Eastern Time.
Oil prices rose more than 2% early in the session after Iran sent a warship to the Red Sea following days of tension in the critical shipping region.
“The escalation of tensions between the U.S. and Iran has caught the attention of some fund managers and is leading to some new long positions,” Dennis Kissler, senior vice president at BOK Financial, wrote in a note to clients.
Tue, Jan 2, 2024 at 3:49 p.m. GMTThe manufacturing sector collapsed more than expected in December
In the last month of 2023, the US manufacturing sector continued to contract.
New data from S&P Global showed the manufacturing PMI index reached 47.9 in December, down from 49.4 in November and below economists' expectations of 48.4.
A reading below 50 indicates that the sector is contracting.
“U.S. manufacturers finished the year poorly, according to S&P Global’s PMI survey,” Chris Williamson, chief economist at S&P Global Market Intelligence, said in a news release. “Production fell at its fastest pace in six months as the recent decline in backlog deepened. The manufacturing sector is therefore likely to have acted as a brake on the economy in the fourth quarter.”
Notably, the report also showed a slowdown in the labor market. Payrolls fell for the third straight month, with factories cutting employment at the second fastest pace since 2009. The only other time factories have reduced employment at this pace in recent years was at the start of the pandemic lockdowns, according to S&P Global.
Inflation was also a key concern for manufacturers in December as selling prices rose at their fastest pace since April.
“Increases in supplier prices for metals and plastics, as well as higher transportation costs, have reportedly driven the rise in inflation,” S&P Global wrote in the report.
- Tue, Jan 2, 2024 at 3:22 p.m. GMT
Apple falls 3% after Barclays downgrade
Shares of Apple fell more than 3% in morning trading on Tuesday after Barclays analysts predicted a slowdown in demand for the iPhone 15.
Analysts lowered Apple's rating to Underweight and lowered their price target to $160 from $161. Apple's share price was around $193 at Friday's close, meaning analysts were forecasting a roughly 17% decline in the tech giant's share price.
“We expect a reversal after a year in which most quarters were missed and the stock outperformed,” analysts said in a note on Tuesday. “Our volume and mix reviews for iPhone 15 remain negative and we see no features or upgrades that are likely to make iPhone 16 more attractive.”
While the tech-heavy Nasdaq Composite (^IXIC) gained about 44% for the year, Apple shares rose about 50%, underperforming several other tech giants. During the company's latest earnings release, a cautious outlook overshadowed a record iPhone quarter for the company.
- Tue, Jan 2, 2024 at 2:33 p.m. GMT
Inventories are falling at the beginning of 2024
Shares started the first trading day of 2024 in the red, putting the year-end rally on hold. The pause in momentum continued from Friday as all three major indexes closed in the red but still posted double-digit gains for the year.
The benchmark S&P 500 (^GSPC) lost nearly 0.6%, while the Dow Jones Industrial Average (^DJI) lost 0.3%, or around 100 points. The tech-heavy Nasdaq Composite (^IXIC) fell about 0.9%.
Tue, Jan 2, 2024 at 9:04 p.m. GMT
Tue, January 2, 2024 at 4:30 p.m. GMT
Tue, Jan 2, 2024 at 3:49 p.m. GMTClick here for a detailed analysis of the latest stock market news and events affecting stock prices.
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