US Stocks Eye 3-Day Slump; Tech, Crypto Sell-Off Deepens, Oil, Dollar Rebound: What's Driving Markets Wednesday?

The early 2024 sell-off is intensifying on Wall Street, with all major stock averages in the red on the second trading day of 2024.

The tech-heavy Nasdaq 100 plunged by 1% at noon in New York, extending its two-day slump to 2.6%. Wednesday’s declines spare no mercy for the blue-chip stocks of the Dow Jones, which managed to avoid losses on Tuesday, causing value-related stocks to fall as well.

The S&P 500 index is at risk of closing its third consecutive day in the red, marking the worst streak since late October.

Small-cap stocks, the stars of the late 2023 rally, are underperforming, with the iShares Russell 2000 ETF IWM plummeting by 1.6%. The CBOE Volatility Index or VIX, popularly known as the market fear gauge, is up 6.5% for the day.

Richmond Federal Reserve President Tom Barkin cautioned the markets not to be overly confident about a soft landing for the U.S. economy, while also not ruling out additional rate hikes.

Economic data is broadly aligned with expectations, as the ISM manufacturing PMI came in at 47.4 in December, slightly higher than the expected 47.1, and job openings totaled 8.79 million in November, compared to the anticipated 8.85 million.

The U.S. dollar index rallied by 1.3%, marking its strongest daily performance since early March 2023, while Treasury yields remain mostly unchanged.

Explosions in Iran that resulted in the deaths of over 100 people at a memorial — and reports of protests disrupting output at Libya’s 300,000-barrel-a-day Sharara oilfield — have fueled an oil rally, with WTI rising by 2.5%.

Precious metals have taken a hit, with gold down by 1.3% and silver down by 3%. Cryptocurrencies have also experienced significant losses, with Bitcoin BTC/USD falling by 5%, amid reports of a delay in the SEC’s approval of Bitcoin ETFs.

Wednesday’s Performance In US Major Indices, ETFs

The SPDR S&P 500 ETF Trust SPY is 0.8% lower to $469.02, the SPDR Dow Jones Industrial Average ETF DIA eased 0.7% and the Invesco QQQ Trust QQQ tumbled 1% to $398.69, according to Benzinga Pro data.

Sector-wise, the Energy Select Sector SPDR Fund XLE is the only one trading in the green, up by 0.9%. Rate-sensitive sectors such as the Real Estate Select Sector SPDR Fund XLRE, the Consumer Discretionary Select Sector SPDR Fund XLY, and the Technology Select Sector SPDR Fund XLK underperformed, down 1.6%, 1.4% and 1% respectively.

Among industries, the VanEck Oil Services ETF OIH outperformed, up 1%. Solar stocks, as tracked by the Invesco Solar ETF TAN, are sharply lower, down 4.5%.

Wednesday’s Stock Movers

• Tesla Inc. TSLA plummeted 3.4%, marking a four-day losing streak following its loss of the top spot in electric vehicle sales to China’s BYD.
• Enphase Energy Inc. ENPH tumbled over 7% on a broader solar sector sell-off, marking the worst performance within the S&P 500.
• SoFi Technologies SOFI slid 13% after Keefe, Bruyette & Woods’ downgrade from Market Perform to Underperform rating and a price target cut from $7.50 to $6.50.
• Blackstone Inc. BX fell 4% after Goldman Sachs downgraded the stock from Buy to Neutral.

Read now: A Glitch In The Rally? Cruise Operators And Chip Stocks Targeted In Profit Taking

Photo via Shutterstock.