The stock market’s slump in 2024 is showing no signs of abating, with tech stocks facing particular challenges. On Thursday, the Dow Jones Industrial Average closed just above the flatline, while the S&P 500 fell by about 0.3%. The Nasdaq Composite, in particular, struggled to gain traction, falling nearly 0.6% below the flatline by the close of the session1.
Apple Stock Continues to Stumble
One of the notable tech giants facing a downward trend is Apple. The company’s stock stumbled for the fourth consecutive day, raising concerns among investors about weakening iPhone demand1. This decline in Apple stock is significant, as it is a key player in the tech sector and its performance often influences market sentiment.
Labor Market Remains Intact
Despite the stock market struggles, there are positive signs in the labor market. Multiple data points released on Thursday indicate that the labor market remains intact while wages continue to cool, which is a welcome sign in the fight against inflation1. The latest ADP employment report shows that private companies added 164,000 jobs in December, surpassing analysts’ expectations1. Additionally, the Department of Labor reported that 202,000 jobless claims were filed last week, which is below economist estimates1.
Oil Prices and Travel Stocks
Oil prices experienced a decline on Thursday, with West Texas Intermediate (WTI) sinking more than 2% due to increased gasoline stockpiles signaling weak demand1. However, this decline in oil prices has had a positive effect on travel stocks. Cruise line and airline operators, such as American Airlines, Delta, United, Royal Caribbean, and Carnival, saw their stock prices rise as lower oil prices imply lower fuel costs for these companies1.
December Jobs Report Anticipation
Investors are eagerly awaiting the release of the December jobs report, which is expected to provide further insights into the state of the labor market at the end of 20231. Consensus estimates compiled by Bloomberg suggest that nonfarm payrolls are expected to rise by 175,000 in December, while the unemployment rate is expected to tick up to 3.8% from the previous month1. The report will be closely watched as it will serve as a crucial test for the stock market’s end-of-year rally.
Tech Stocks Highlighted on Yahoo Finance
On Thursday, Yahoo Finance highlighted the trending tickers in the stock market. QuantumScape Corporation (QS) led the trending tickers page, with its stock surging almost 50% after its solid-state cell passed its first endurance test1. However, Mobileye Global (MBLY) stock dropped by approximately 25% after the chipmaker announced an expected decline in first-quarter revenue1. Walgreens (WBA) stock fell about 6% after reporting quarterly results and announcing a dividend cut1. On the positive side, Peloton (PTON) stock soared more than 15% following the announcement of a partnership with TikTok1.
Mortgage Rates and Housing Market
Mortgage rates, after experiencing a significant fall, have stalled at the beginning of 20241. The average rates for 30-year loans inched up slightly, but they have been declining for weeks, providing homebuyers with increased purchasing power1. However, affordability improvements could be limited due to a continual supply shortage, especially if lower rates attract sidelined demand1.
Earnings Season and Stock Market Rally
Despite the rough start to the year, some analysts believe that earnings season could drive a stock market rally1. Analysts expect S&P 500 companies to report earnings growth of 11.7% for the full year, which is above the 10-year average annual earnings growth rate1. Bank of America sees nearly 10% growth for the S&P 500 from current levels, with the upcoming earnings season being a key factor in driving the market1.
The stock market’s slump continues, with tech stocks facing particular challenges. Apple’s stock has stumbled for four consecutive days, raising concerns about weakening iPhone demand1. However, there are positive signs in the labor market, as multiple data points indicate that the labor market remains intact while wages continue to cool1. Additionally, lower oil prices have had a positive effect on travel stocks, while investors eagerly await the release of the December jobs report1. Despite the rough start to the year, earnings season could be a catalyst for a stock market rally1. As the market moves forward, investors will be closely monitoring these developments to assess the overall health and trajectory of the stock market.