Tech Stocks Slide: U.S. Markets Struggle Amid Broader Economic Concerns

December 31, 2024 12:00 AM AEDT | By Team Kalkine Media

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Tech Stocks Slide: U.S. Markets Struggle Amid Broader Economic Concerns — Image source: shutterstock

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Highlights

- U.S. markets face challenges as major tech stocks decline.

- Broader indices witness mixed performances across sectors and regions.

- Global markets react to economic and political developments.

U.S. stocks faced downward pressure, ending the week on a somber note as tech heavyweights experienced notable declines. The holiday season contributed to low trading volumes, further complicating market dynamics. Leading the fall were key players from the so-called "Magnificent Seven," which have driven much of the year's earlier gains. Shares of tech giants such as Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), Tesla (NASDAQ:TSLA), and Amazon.com (NASDAQ:AMZN) saw significant declines during Friday's session.

Smaller companies also struggled, with the Russell 2000 index, which tracks small-cap stocks, dropping by approximately 1.6%. These stocks are often more sensitive to economic health and interest rate movements, reflecting broader concerns about U.S. inflation and growth.

The performance was bleak across all 11 sectors of the S&P 500, which ended the session in the red. The Dow Jones Industrial Average fell about 334 points, or 0.8%, while the S&P 500 and Nasdaq Composite registered losses of 1.1% and 1.5%, respectively. Despite these setbacks, major indices retained their overall gains for the year, with the Dow up approximately 14%, the S&P 500 up 25%, and the Nasdaq up 31% as of Friday’s close.

In bond markets, the yield on the benchmark 10-year U.S. Treasury rose to 4.619%, its highest level since May. Rising yields reflect investor concerns about persistent inflation and uneven economic growth. This sentiment was fueled by Thursday's data, which revealed the highest level of new unemployment claims since 2018.

Global markets presented a mixed picture. In Japan, the Nikkei 225 index rose 1.8% on Friday, pushing its annual gain to nearly 20%. South Korea's Kospi index fell by 1% amid political uncertainty following the impeachment of acting President Han Duck-soo, extending the index’s year-to-date loss to over 9%.

European markets, reopening after a holiday, saw moderate gains. The Stoxx Europe 600 index advanced 0.7%. However, Germany's Delivery Hero (ETR:DHER) experienced a 5% slump after Taiwanese regulators blocked the sale of its local food delivery unit to Uber (NYSE:UBER). This $950 million deal’s future remains uncertain, with Uber indicating potential legal actions or investments in the region.

Overall, market movements highlighted investor concerns about inflation, political developments, and regulatory hurdles across regions.

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