U.S. stocks fell further from recent all-time highs on Tuesday, as concerns about interest rates and resilience in technology stocks introduced caution into the market.
Contracts linked to the Nasdaq Composite (^IXIC), dominated by tech giants, led the decline, falling about 1.8% as the ongoing decline of Apple (AAPL) and Tesla (TSLA) continued to put pressure on the broader market.
The S&P 500 (^GSPC) saw a drop of about 1%, while the Dow Jones Industrial Average (^DJI) was down about 0.8% after a slow start to the week.
Despite the broader market pullback, Bitcoin (BTC-USD) hit a new all-time high, briefly surpassing its previous peak of $68,789 from November 2021. However, it later retreated to around $65,000 per coin.
There is now speculation about whether the technology-driven gains that fueled the recent market rally have peaked, and the negative news dampened the “fear of missing out” (FOMO) that has kept investors interested.
Additionally, confidence in possible Fed easing was shaken after statements by policymaker Raphael Bostic, president of the Atlanta Federal Reserve, who suggested that only one rate cut could occur this year, scheduled for the third quarter.
Investor attention is now focused on Federal Reserve Chair Jerome Powell’s testimony before Congress on Wednesday, with his comments closely scrutinized for any deviation from the prevailing view that policymakers must be convinced inflation is under control before taking action.
In corporate news, Apple faced pressure following reports of a 24% drop in iPhone sales in China, compounded by losses on Monday following a $2 billion EU antitrust fine. Tesla continued its decline amid concerns about a slowdown at its Berlin Gigafactory, exacerbating concerns about shipping delays and a price war in China.
Meanwhile, Target (TGT) beat Wall Street forecasts with its earnings, sending its stock price up more than 10%.
In the commodities market, gold hit new highs on Tuesday, boosted by expectations of rate cuts and ongoing geopolitical tensions. Gold futures (GC=F) hit a high of $2,150.50 earlier in the day, while spot gold hit a high of $2,141.79 before retreating. The precious metal, often considered a safe haven in times of uncertainty, tends to rise when the US dollar weakens and interest rates fall.
As for cryptocurrency markets, Bitcoin hit a new all-time high of $68,869 before retreating to trade around $67,000 per coin. The rise in Bitcoin prices coincided with US regulators’ approval of Bitcoin exchange-traded funds (ETFs) launched in January, which generated more than $4.2 billion in net new flows in one month.
Other cryptocurrencies, such as Ethereum (ETH-USD), also saw significant gains amid Bitcoin’s rise, with Ether prices rising 66% since the beginning of the year to trade around $3,800 per coin.
As the market digests these developments, analysts and experts are likely to provide their insights and analysis, offering perspectives on potential market moves leading up to the election and beyond.
Also read: US Stock Futures Fall as Tech Giants Fall Ahead of Economic Indicators