Dow drops 500 points, Big Tech stocks drag Nasdaq down 2%
Stocks declined on Friday, led by technology names, with the Dow Jones Industrial Average erasing earlier gains in the holiday-shortened week.
The blue-chip Dow shed more than 500 points, falling for the first time in six sessions. The S&P 500 fell 1.6% with all 11 sectors in the red. The Nasdaq Composite slid 2.2% as Tesla dropped 5%, and Nvidia declined more than 3%. Amazon, Microsoft and Alphabet each fell at least 2%.
With Friday's sell-off, the Dow turned negative on the week, while the tech-heavy Nasdaq sat near flat. The S&P 500 is up just 0.2% this week after posting its best Christmas Eve performance since 1974 on Tuesday, according to Bespoke.
A rise in Treasury yields this week could be putting pressure on equities. The yield on the benchmark 10-year Treasury rose another 2 basis points Friday to 4.603% after the rate hit its highest level since May in the previous session.
"I think what you're seeing today is a lack of faith," Alan Rechtschaffen, UBS Global Wealth senior portfolio, said on CNBC's "Market Movers." "I think there's a lot of noise about tariffs, there's a lot of concern about productivity."
Still, some investors remain hopeful that stocks will rise into the new year, spurred by the so-called "Santa Claus rally." This refers to the market's tendency to rise in the final five trading days of the year and the first two in January. Since 1950, the S&P 500 has returned 1.3% on average during this period, outpacing the market's average seven-day return of 0.3%, according to LPL Financial.
"The nation is experiencing a collective sigh of relief after navigating through a contentious election cycle and unusual market dynamics to end 2024 with strong year-to-date gains," said Todd Ahlsten, chief investment officer at Parnassus Investments. "Looking ahead to 2025, the markets are expected to broaden and improve."
In December, the Nasdaq is on pace for a 2% advance, lifted by a jump in Tesla and Alphabet shares, as well as by a rally in Apple that's brought the iPhone maker closer to a $4 trillion market cap. The S&P 500 is down 1.5% on the month. The Dow is on pace for its worst month since April, with a roughly 4.7% decline.(Cay) newsmaker23
Source: CNBC
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