US Market Recap: Slump in Tech Heavyweights Weakened US Stocks

 

 

The US market started 2025 weak, driven by declines in tech heavyweights Apple and Tesla on Thursday (Jan. 2nd). Expected slowdown in economic data and interest rate cuts also weakened market sentiment.

 

By the close of US markets, the S&P 500 Index fell 0.22% to 5,896.60 points. The NASDAQ Composite Index dipped 0.16% to 19,280.79 points. The Dow Jones Index dropped 0.36% to 42,392.27 points. One of Wall Street's biggest heavyweights, Apple $AAPL closed down 2.62%. Another heavyweight, Tesla $TSLA plunged 6.08%.

 

Apple's stock fell after the company announced it was selling its flagship device in China with a $68.50 discount to cope with growing competition and lagging local sales.

 

Although China is Apple's main consumer market, the company is losing market share there as many of its Chinese peers compete with it. Its November’s sales in China underperformed. UBS analysts gave warning that Apple's December quarter sales would miss expectations.

 

The plunging Tesla stock was attributed to the company's weaker-than-expected deliveries in the fourth quarter. Weak demand for electric vehicles in North America and Europe, coupled with increased competition in China, led to Tesla's first annual decline in deliveries. Tesla needs to explore other areas to diversify sources of profitability.

 

 

The Atlanta Federal Reserve lowered America’s fourth-quarter gross domestic product projection, signaling that US economic growth slowed down. The message pressured US stock indexes.

 

Fortunately, the weekly jobless claims data were lower than expected, indicating a robust labor market. However, the strong labor market fueled investor concerns that the Federal Reserve will reduce interest rate cuts in 2025. The Fed has said it will slow the easing pace in 2025 to handle sticky inflation.

 

#usmarket