Wall Street Had a Rough Start to 2024

Wall Street started 2024 with a slump, giving back some of its powerful gains from the year before.

• The S&P 500 slipped 27.00 points, or 0.6%, to 4,742.83 after coming into the year at the brink of its all-time high
• The Dow Jones Industrial Average edged up 25.50, or 0.1%, to a record high of 37,715.04.
• The Nasdaq composite led the market lower with a drop of 245.41, or 1.6%, to 14,765.94.

Some of the market's sharper drops came from stocks that were last year's biggest winners, the AP reports. Apple lost 3.6% for its worst day in nearly five months, and Nvidia and Meta Platforms both fell more than 2%.

Tesla, another one of the "Magnificent 7" Big Tech stocks that drove well over half of Wall Street's returns last year, swung between losses and gains after reporting its deliveries and production for the end of 2024. It ended the day down by less than 0.1%. Netherlands-based ASML sank after the Dutch government partially revoked a license to ship some products to customers in China. The United States has been pushing for restrictions on exports of chip technology to China. ASML's US-listed shares fell 5.3%, and US chip stocks also weakened.

Health care stocks held up better after Wall Street analysts upgraded ratings on a few, including a 13.1% jump for Moderna. Amgen's 3.3% gain and UnitedHealth Group's 2.4% climb were two of the strongest forces lifting the Dow. A report on Tuesday showed that the US manufacturing industry may be weaker than thought. It contracted by more last month than an earlier, preliminary reading indicated, according to S&P Global, as new sales dropped because of weakness both abroad and at home. Business confidence, though, did pick up to a three-month high.

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Much of Wall Street had been preparing for at least a pause in the big rally that carried the S&P 500 to nine straight winning weeks and within 0.6% of its record set almost exactly two years ago. That big surge came on hopes the Federal Reserve may have engineered a perfect escape from high inflation: one where high interest rates slow the economy enough to cool inflation but not so much that they cause a painful recession. Now, the hope is that the Fed will shift sharply in 2024 and cut interest rates several times. Cuts can relax the pressure on the economy and boost prices for investments. But even though such hopes are high, it's still not assured. And prices for stocks and bonds have already rallied hard on expectations for them. (More stock market stories.)