US Stocks Fall as Tech Selloff and Trade Deficit Weigh

A report reveals a decline in major US indexes, led by a selloff in tech stocks and a widening trade deficit, signaling a bearish outlook for the market amidst thin trading conditions and rising bond yields.

Date: 28-12-2024

AI Rating: 4

The analysis indicates significant downward pressure on U.S. stock prices, primarily due to a selloff in major technology stocks—collectively referred to as the 'Magnificent Seven'. This group includes Tesla, Nvidia, Microsoft, Amazon, Alphabet, and Apple, all of which closed down significantly.

The report also highlights that the U.S. November trade deficit widened to $102.9 billion, exceeding analysts' expectations and suggesting possible negative implications for Q4 GDP. A larger trade deficit can weaken domestic economic growth, leading to bearish sentiment in the stock market.

Additionally, wholesale inventories unexpectedly decreased by 0.2%, contrasting with expectations of an increase of 0.1%. This unexpected fall in inventories can indicate reduced consumer demand and may lead to further bearish interpretations regarding future economic activity.

The report points out that high Treasury note yields, which rose to 4.617%, have also put downward pressure on equity prices. As bond yields rise, investors often shift their investments to fixed-income securities, reducing demand for stocks—this can result in lowered stock prices.

Furthermore, the report mentions the impact of external markets, with strength in Asian equities providing mixed signals for U.S. stocks, but this support was insufficient to offset the domestic pressures.

Overall, the data indicates a bearish sentiment for the stock market, emphasizing the influence of trade deficits, interest rate movements, and inventory reports on stock prices.

Stocks: TSLA NVDA MSFT AMZN GOOGL AAPL NCLH CCL RCL NFLX CRWD AVGO KKR FAST LW HSY HRL MDLZ KHC CAG GIS PGNY AMED VRSN