Nasdaq Composite Retreats After Touching 20K, S&P Down Too
Today the NASDAQ’s retreat after hitting the 20,000 milestone highlights potential profit-taking, but the S&P 500 and Dow Jones also retreated.
The major US stock indices ended the day near their lowest levels, marking a notable retreat from recent highs. The NASDAQ, which closed at a record peak yesterday, saw a pullback, while the S&P 500 finished below its all-time closing level despite trading above it earlier in the session. Both indices moved further away from their record highs, reflecting a shift in market sentiment.
The semiconductor sector faced significant pressure, with Broadcom (AVGO) falling 2% and Nvidia (NVDA) down 1.5%. These declines underscore growing pessimism in a sector that has been pivotal to IT market strength. Factors such as supply chain constraints or industry-specific developments may be weighing on the sector’s outlook.
Closing Levels for Main US Indices
- Dow Jones Industrial Average: Fell -234.44 points (-0.53%) to close at 43,914.12.
- S&P 500 Index: Dropped -32.94 points (-0.54%) to end at 6,051.25.
- NASDAQ Index: Declined -132.05 points (-0.66%) to finish at 19,902.84.
- Notably, the NASDAQ had closed above 20,000 for the first time on record the previous day.
- Russell 2000: Suffered a larger percentage loss, down -33.07 points (-1.38%) to close at 2,361.08.
Post-Close Earnings Reports:
Costco:
- EPS: Reported $4.04, beating the estimate of $3.78.
- Revenue: Missed expectations at $62.2B versus a forecast of $62.52B.
- Stock Performance: Shares closed at $992, reflecting optimism despite the revenue miss.
Broadcom:
- EPS: Delivered $1.42, slightly exceeding the estimate of $1.39.
- Revenue: Slightly below expectations at $14.05B versus the anticipated $14.07B.
- Stock Performance: Shares closed at $181.20, holding steady after the earnings release.
In other news, President-elect Donald Trump made remarks during the Nasdaq opening bell ceremony, emphasizing the importance of the stock market. He discussed potential tax cuts, proposing a reduction from 21% to 15%, and highlighted plans to incentivize workforce participation. Trump also outlined ambitions to lead in artificial intelligence (AI) and cryptocurrency innovation, noting that AI development would require significant electricity resources. He also signaled plans for extensive talks with China, aiming to encourage hard work and wealth generation among Americans.
Meanwhile, the US Treasury auctioned $22 billion worth of 30-year bonds. The auction results were mixed compared to six-month averages:
- High yield: 4.535%, slightly above the WI level of 4.523%.
- Tail: 1.2 basis points, higher than the average of 0.2 bps.
- Bid-to-cover ratio: 2.39, slightly below the 2.44 average.
- Direct bidder participation (domestic demand): 19.1%, above the 17.8% average.
- Indirect bidder participation (global demand): 66.5%, below the 67.7% average.
- Dealer takedown: 14.4%, close to the average of 14.5%.
The auction received a grade of C-, with mixed results. While domestic demand showed a slight increase, global demand was weaker, and the bid-to-cover ratio fell below average. The higher tail also indicated less favorable auction dynamics.
In summary, the day saw declining equity markets, pressure on key tech sectors, cautious optimism from the President-elect’s economic vision, and tepid results in the bond market auction, reflecting a complex economic and market environment
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