(Bloomberg) — A banner year for US stocks is ending badly as a retreat in technology stocks extended a stretch of losses that began when the Federal Reserve cooled expectations for interest-rate cuts two weeks ago.
Most Read from Bloomberg
It was the third time the S&P 500 has fallen more than 1% in eight sessions. The index was down as much as 1.7% on Monday — weighed down by technology stocks including Apple Inc. Microsoft Corp. and Amazon.com Inc. — before slightly trimming declines.
Treasuries rallied, with the 10-year yield around 4.55%. Yields had dropped further after Chicago Purchasing Managers’ Index data showed an unexpected decline. Data on Monday also showed pending sales of US homes increasing for a fourth month in November to the highest level since early 2023. The Bloomberg Dollar Spot Index posted modest gains.
This year, the so-called Magnificent Seven cohort of US tech giants has driven a 25% advance in the S&P 500, while prompting some to worry that the gains are too concentrated in a small group of names. Still, few are calling for the rally to end and none of the 19 strategists tracked by Bloomberg expects the S&P 500 to decline next year.
“In these moments, it’s best to stay put,” said Nicolas Domont, a fund manager at Optigestion in Paris. “The US remains the place to be. Growth stocks continue to outperform and earnings forecasts are good, so there are good reasons to remain optimistic.”
Elsewhere, Europe’s Stoxx 600 index retreated, while Asian stocks snapped five days of gains. Trading volumes were thinner because of the holiday season.
“There’s a little bit of trepidation heading into year-end, owing in part to uncertainty over how the international trade picture may take shape in 2025,” said Tim Waterer, chief market analyst at Kohle Capital Markets Pty. “Some traders are taking risk off the table heading into year-end.”
Trading in Europe’s equity benchmark was about half of the 30-day average. It’s the final session of 2024 for some markets including Germany, where the DAX benchmark saw an 19% annual advance.
Deadly Crash
Back in Asia, shares in Jeju Air fell 8.7% in Seoul to a record low after a Boeing Co. 737-800 aircraft operated by the carrier crashed on Sunday, causing the death of all but two of the 181 occupants. Boeing shares dropped as much as 5.9% in US trading before paring declines.
Oil edged higher as traders focused on 2025 risks. Crude is heading for a loss this year, with trading confined to a narrow range since mid-October. Gold is set for one of its best years.
