US stocks fall as tech, rate-cut doubts creep in

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US stocks slid on Tuesday, pulling further back from record highs as uncertainty over interest rate cuts and the continued strength of tech stocks brought a note of wariness to the market.

The S&P 500 (^GSPC) slipped about 0.4%, while the Dow Jones Industrial Average (^DJI) moved roughly 0.3% lower after a losing start to the week. Contracts on the tech-heavy Nasdaq Composite (^IXIC) sank around 0.8% as a continued retreat in Apple (AAPL) and Tesla (TSLA) continued to drag on stocks more widely.

The debate now is whether the tech gains behind the recent record-setting stock rally have reached their peak, as downbeat news saps the “FOMO” — fear of missing out — seen as keeping investors engaged.

In early trading, Apple came under pressure after a report that iPhone sales fell 24% in China, adding to Monday’s loss in the wake of a $2 billion EU antitrust fine. Tesla continued to slump as a shutdown at its Berlin Gigafactory added to concerns over a shipment slump and a Chinese price war.

At the same time, faith in coming easing by the Federal Reserve took a knock after comments by policymaker Raphael Bostic. The Atlanta Fed president said he sees just one rate cut this year, penciled in for the third quarter.

Investors are now even more focused on Fed Chair Jerome Powell’s testimony to Congress on Wednesday. His words will be closely watched for any change in the mantra that policymakers need to be convinced inflation is conquered before any move.

Meanwhile, bitcoin (BTC-USD) reached a fresh all-time high, briefly surpassing its previous record of $68,789 from November 2021. It’s since retreated to trade around $68,000 a coin.

In corporates, Target (TGT) earnings beat Wall Street forecasts, helping shares pop more than 10% in early market trading.

Live3 updates

  • The macro setup and election season

    It’s a day likely to be full of Super Tuesday analysis from various market pundits and other experts.

    So why not join in the fun here at Yahoo Finance.

    A good note from one of my favorite economists Michael Schumacher over at Wells Fargo just crossed my inbox. I found it helpful to see how he is thinking through potential market moves months before the election, with a specific focus on fiscal and monetary policy.

    Schumacher’s thoughts.

    Republican Sweep

    “In our opinion, a Republican sweep is the scenario that would cause the biggest increase in the deficit and Treasury’s financing need after 2025. We expect easier fiscal policy under a Trump administration, especially if Republicans gain control of Congress. President Trump quite likely would want to extend, if not expand, his previous tax cuts. We expect this scenario to have the largest impact on Treasury term premium and the yield curve (e.g. 5s/30s). As we noted previously, the curve probably will steepen if Trump wins big over the next few weeks and a Republican sweep becomes increasingly likely.”

    Democratic Sweep

    “This scenario also seems quite likely to involve a larger deficit and steeper Treasury curve, but by a smaller margin than in a Republican sweep. Our economists say “Even if Democrats sweep on Election Day, we doubt they would allow the TCJA to completely expire as scheduled”. Tax rates could conceivably rise even more for top income earners. Furthermore, corporate income tax increases are also more likely in this scenario. Although some of the individual income tax provisions are likely to expire as planned we expect more meaningful spending packages to accompany the expiration of the tax cuts.”

  • Stocks pull further back from record highs

    US stocks slipped on Tuesday, once again retreating from record highs.

    At the opening bell, the S&P 500 (^GSPC) slid 0.4%, while the Dow Jones Industrial Average (^DJI) moved about 0.3% lower after a losing start to the week. Contracts on the tech-heavy Nasdaq Composite (^IXIC) sank roughly 0.8% amid continued drags from Apple (AAPL) and Tesla (TSLA).

  • It’s Super Tuesday, Target’s CEO mentions the word election

    Super Tuesday is unlikely to move markets.

    Totally get it, besides there is a lot more happening this week in markets from wild moves in bitcoin to the slide in Tesla’s (TSLA) stock.

    But at some point this year, what’s shaping up to be a contentious US presidential election will move markets. That’s why I am banking comments on the election from top leaders today in order to help guide investors through the murky waters months from now.

    Target (TGT) chairman and CEO Brian Cornell — who I last physically saw inside the White House a few months ago before a meeting with the Biden administration —didn’t give me a lot on his macro views on Super Tuesday. He did give me just enough in a phone chat, however, to begin thinking how the consumer stock trade may act in the months before November.

    Here’s what he told me:

    “We’re watching it [the election] like you are, really carefully. We’ve looked at past trends during election years. I think that it makes sure we bring that little bit of joy to the guests during uncertain times. Make sure we make Target a special place for them to shop, filled with relevant product and great value. But we know they’re still going to consume, and we want to be a destination during what could be a very challenging and uncertain period of time.”

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