Market Volatility: Dow Logs Biggest Losing Streak in 46 Years
The US stock market experienced a broad sell-off on Tuesday, with the Dow Jones Industrial Average registering its ninth consecutive day of losses, marking its longest losing streak in 46 years. The blue-chip index fell roughly 0.6%, while the S&P 500 and Nasdaq Composite also declined, shedding around 0.4% and 0.3%, respectively.
Federal Reserve Meeting Looms
Investors are bracing for the Federal Reserve’s final policy meeting of the year, with a 0.25% interest rate cut widely expected. However, some experts believe this could be the last cut for some time, as inflation remains persistent. The focus is now on clues to the path of rates next year, particularly in January.
Retail Sales Beat Expectations
November retail sales rose 0.7%, outpacing expectations of a 0.6% increase. The strong holiday spending season has boosted consumer confidence, with sales excluding auto and gas rising 0.2%. The control group, which excludes volatile categories, increased by 0.4%, in line with estimates.
Tech Stocks Take a Hit
Nvidia’s shares fell over 1% on Tuesday, extending their decline from a record high in November. The chip giant’s stock has lost over 10% since then, amid concerns about AI spending and competition from rivals. Meanwhile, Tesla’s shares continued to rally, rising as much as 4.5% and boosting its market cap to around $1.54 trillion.
Bitcoin Surges to New High
Bitcoin prices briefly broke above $108,000 on Tuesday, before retreating to around $106,500. The largest cryptocurrency by market value has enjoyed a significant rally since Donald Trump’s presidential win, rising over 50% since then.
Market Sentiment Remains Bullish
Despite the recent market volatility, investors remain optimistic about the economy and stocks. A Bank of America fund manager survey showed that respondents are bullish about US stocks, with global risk appetite at a three-year high and investors’ allocation to cash sitting at a three-year low. However, some strategists are cautioning against complacency, warning of potential risks and corrections in 2025.
Homebuilder Confidence Flat
Homebuilder confidence remained flat in December, amid uncertainty over mortgage rates and regulatory relief. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index stayed at 46, lower than economists’ estimates of 47. While builders are expressing concerns about high interest rates and construction costs, they are also anticipating future regulatory relief in the aftermath of the election.
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