Bears Prowl Wall Street As Magnificent 7 Tumble; Bitcoin Sinks After Record High: What's Driving Markets Tuesday?

Volatility knocked on the doors of Wall Street on Tuesday, with major indices all in the red during midday trading as mega-cap tech stocks plunged simultaneously.

All the Magnificent Seven names experienced losses. Tesla Inc. TSLA nosedived over 4%, while Apple Inc. (NASDAQ AAPL) shed 2.7%, marking its fifth consecutive session of losses. This decline followed a report indicating a 24% drop in iPhone sales in China during the first six weeks of 2024.

On the data front, signals were mixed. The ISM Services PMI reported a lower-than-expected expansion in February, and factory orders sharply declined in January.

Elsewhere, Bitcoin continued to seize headlines. The largest cryptocurrency surged past all-time highs above $69,000 before plunging by 6% just minutes after reaching the milestone, reflecting some profit-taking behavior among investors.

Meanwhile, Treasury yields experienced a modest downturn as investors pondered the increasing likelihood of Federal Reserve interest rate cuts for the first half of 2024. This ignited gains in long-dated Treasuries, with the iShares 20+ Year Treasury Bond ETF TLT up 1.2%.

Gold rallied for the fifth consecutive day, reaching an intraday high of $2,141/oz, effectively flirting with the all-time highs reached last December at $2,146.

Tuesday’s Performance In Major US Indices, ETFs

The SPDR S&P 500 ETF Trust SPY fell 0.9% to $508.02, the SPDR Dow Jones Industrial Average DIA fell 0.7% to $387.42 and the tech-heavy Invesco QQQ Trust QQQ tumbled 1.7% to $436.45, according to Benzinga Pro data. 

The Energy Select Sector SPDR Fund XLE, was the outperformer, up by 1.3%, while the Technology Select Sector SPDR Fund XLK sharply underperformed, down 2.4%. 

Tuesday’s Stock Movers

• New York Community Bancorp, Inc. NYCB rose 17% after KBW analysts noted plans to sell mortgage-servicing rights, boosting capital to bolster its balance sheet and mitigate potential real estate loan losses.
• Target Corp. TGT rose over 12% after better-than-expected quarterly results.
• Albemarle Corp. ALB declined by more than 11% following a nearly 7% drop on Tuesday, triggered by the company’s disclosure of plans to raise capital through a $2 billion issuance of depositary shares.
• GitLab Inc. GTLB shares tumbled 22.4% to $57.80 after the company issued FY25 earnings guidance below estimates.
• Other companies reacting to earnings were Paymentus Holdings, Inc. PAY (up over 24%) and Stitch Fix, Inc. SFIX (down over 19%).
• SoFi Technologies Inc. SOFI plummeted over 13% as the fintech company unveiled intentions to offer $750 million of convertible senior notes due in 2029, thereby heightening dilution risks for shareholders.
• Nordstrom, Inc. JWN, Ross Stores, Inc. ROST, Box, Inc. BOX, CrowdStrike Holdings, Inc. CRWD and ChargePoint Holdings, Inc. CHPT will report after the close.

Read now: Bitcoin Hovers Around New All-Time High, Experts Eye Bullish Future: ‘A Perfect Setup’

Image created using artificial intelligence with Midjourney.