Stock Market Update: Dow Plunges 300 Points Amid Tech Stock Decline

On Friday, the stock market experienced a significant drop, with tech stocks leading the decline. This resulted in a 1.49% fall in the tech-heavy Nasdaq Composite and a 1.11% loss in the S&P 500. The Dow Jones Industrial Average also shed 333 points by the end of the day.

Reasons Behind the Stock Market Plunge

According to UBS senior portfolio manager Alan Rechtschaffen, the drop in stocks reflects a lack of faith among investors, driven by uncertainties surrounding trade and productivity. Additionally, a sell-off in government bonds has impacted equity appetite, with the 10-year Treasury yield surpassing 4.6%. This adjustment may be in response to expectations of higher interest rates in the coming year and concerns over rising fiscal deficits under the Trump administration.

Outlook for the Holiday-Shortened Week

Despite the sharp decline on Friday, stocks ended the holiday week in positive territory. Investors are hopeful for a year-end rally, a common trend during the final five trading days of the year. However, the absence of a "Santa Claus rally" could potentially result in a negative impact on market performance in January.

Adam Turnquist, chief technical strategist for LPL Financial, highlighted that historically, when stocks have failed to rally during this period, the S&P 500 has seen average January and forward annual returns of -0.02% and 5.0%, respectively.

Current Status of US Stock Indexes

As of the 4:00 p.m. closing bell on Friday, the major US indexes stood as follows:

• S&P 500: 5,970.84 (-1.11%)
• Dow Jones Industrial Average: 4,2,992.21 (-0.77%)
• Nasdaq Composite: 19,722.03 (-1.49%)

Other Market Developments

Aside from the stock market plunge, here are some other notable events:

• Warren Buffett's Berkshire Hathaway is increasing its stake in internet domain provider VeriSign.
• Wedbush predicts a 26% upside for Apple stock, driven by its AI strategy unlocking a new era of growth.
• De Beers is accumulating the largest diamond stockpile since the 2008 crisis due to a decline in demand.
• One strategist reassures investors not to worry about overstretched stock valuations in 2025.

For more insights and updates on the stock market, stay tuned to Business Insider.

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By: fdemott@insider.com (Filip De Mott)
Title: Stock Market Update: Dow Plunges 300 Points Amid Tech Stock Decline
Sourced From: markets.businessinsider.com/news/stocks/stock-market-tech-magnificent-7-rout-treasury-bond-yield-santa-2024-12
Published Date: Fri, 27 Dec 2024 21:36:49 +0000