Stocks dropped on Tuesday, with the Dow Jones Industrial Average marking its ninth straight daily decline, the longest losing streak for the index since 1978. Investors are on edge as they await the Federal Reserve’s decision on interest rates, set to be announced tomorrow.
The Dow ended the day 0.6% lower, continuing its downward trend. The S&P 500 and Nasdaq also retreated, falling 0.4% and 0.3%, respectively. However, both indices remain just under 1% away from reaching record highs.
Mixed Performance in Tech Stocks
Large-cap technology stocks had a mixed performance on Tuesday. Nvidia (NVDA), a favorite among AI investors, fell 1.2%, extending a slump that has now pushed the stock into a technical correction. Broadcom (AVGO) dropped 3.9%, giving back some of the significant gains it posted after reporting strong earnings last week. Other tech giants, including Amazon (AMZN), Alphabet (GOOGL), and Meta Platforms (META), also saw losses.
On the positive side, Tesla (TSLA) led the gainers among mega-cap stocks, rising 3.6%. This boost came amid growing optimism surrounding the electric vehicle maker, particularly in light of CEO Elon Musk’s close ties with President-elect Donald Trump. Apple (AAPL) and Microsoft (MSFT) also saw modest gains.
Health Care Stocks Hit Hard
Health care stocks remained under pressure, especially after comments from Donald Trump about eliminating the “middleman” in the prescription drug market. Humana (HUM) suffered the biggest loss among S&P 500 companies, falling 10.2%. This drop followed a report from Piper Sandler analysts that raised concerns about earnings risks related to certain plans covering military veterans.
On the other hand, Pfizer (PFE) emerged as one of the S&P 500’s top gainers, rising 4.7%. The pharmaceutical giant confirmed its full-year 2024 projections and issued guidance that matched analysts’ expectations.
Federal Reserve Meeting in Focus
The big event for market watchers this week is the ongoing two-day meeting of the Federal Reserve’s policy committee. The Fed is widely expected to cut its benchmark interest rate, following similar actions in September and November. In addition to the rate decision, investors will closely monitor what Fed officials say about the economy’s health and the outlook for interest rates in 2025.
The yield on 10-year U.S. Treasuries, which often reflects market expectations about interest rates, remained unchanged at 4.40% on Tuesday.
Other Market Movements
Bitcoin reached $106,100 after briefly hitting a new record high of $108,300 earlier in the day. The cryptocurrency has gained over 50% since the U.S. presidential election, buoyed by investor optimism that a Trump administration, along with a crypto-supportive Congress, will introduce favorable measures for digital assets.
Meanwhile, gold futures fell slightly to around $2,660 per ounce, and crude oil futures dropped nearly 1%.
As the week progresses, market participants will remain focused on the Federal Reserve’s rate decision and the broader economic outlook.
