S&P, Nasdaq start 2024 in subdued fashion as Apple weighs By Reuters

By Shristi Achar A and David French

(Reuters) -The and dropped in the first trading session of 2024, weighed by a decline in Apple shares (NASDAQ:) following a broker downgrade and a brief climb in Treasury yields as investors tempered interest-rate cut expectations.

The lackluster start follows a year where Wall Street’s three major indexes notched double-digit gains on the back of optimism around artificial intelligence and stabilizing inflation. The S&P 500 ended last week within 1% of a record closing high reached in early 2022.

However, equities came under pressure on Tuesday as U.S. Treasury yields climbed. The yield on 10-year notes ticked above 4.000% to a two-week high before easing to 3.95%.

Apple fell 4% after Barclays downgraded the tech giant to “underweight”, citing weakening iPhone demand. Other megacap stocks, including Nvidia (NASDAQ:), Meta Platforms (NASDAQ:) and Microsoft (NASDAQ:) shed between 1.8% and 3%.

“The losses right now are in tech, which was the biggest winner last year. It’s not shocking that they came down a little,” said Joe Saluzzi, co-manager of trading at Themis Trading.

“What we saw in December was kind of a sloppy rally where people seem to be wanting to put things on their books maybe or cover shorts. That rally lasted a little bit too long.”

The S&P 500, the Dow and the Nasdaq booked nine consecutive weekly gains on Friday – the longest weekly winning streak for the S&P 500 since January 2004, and the longest for the Dow and the Nasdaq since early 2019.

The Fed’s December policy meeting minutes and a slew of labor market data are on the roster for this week as market participants look to ascertain the timing of potential rate cuts.

While the Fed is widely seen holding rates at its January meeting, traders expect a near 70% chance of a 25-basis point cut in March, according to the CME Group’s (NASDAQ:) FedWatch tool.

At 1:54 p.m. ET, the was up 30.21 points, or 0.08%, at 37,719.75, the S&P 500 was down 27.88 points, or 0.58%, at 4,741.95, and the Nasdaq Composite was down 250.64 points, or 1.67%, at 14,760.71.

Health stocks were among the best performing of the S&P 500 sectors, rising 1.7% to the index’s highest level in a year. Energy was also a leading gainer, up 1.6%, despite crude slipping on concerns about the economic outlook. [O/R]

Information technology led declines with a 2.8% drop.

Tesla (NASDAQ:) traded flat despite saying it delivered a record number of electric vehicles in the fourth quarter, beating market estimates and meeting its 2023 target of 1.8 million vehicles.

Boeing (NYSE:) shed 3.2% after Goldman Sachs removed the aerospace company from its “conviction list”.

Meanwhile, Citigroup hit its highest level in 11 months, advancing 3.1% to $53, after Wells Fargo raised its price target for the bank to $70 from $60. Wells analyst Mike Mayo also said Citi was his top pick among large banks in 2024, and he expects the stock to double to $100+ over the next three years.

Crypto-related stocks such as Marathon Digital (NASDAQ:) Holdings and MicroStrategy gained as bitcoin pierced above $45,000 for the first time since April 2022 on optimism around the possible approval of exchange-traded spot bitcoin funds.