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Why is the stock market down today?
Market retreats as tech stocks lead decline, Nvidia earnings loom
The US equity market took a step back on Monday, with the S&P 500 falling below 6,000 and major indices across the board suffering declines. The tech-heavy Nasdaq Composite Index dropped by 0.8%, while the Dow Jones Industrial Average slipped 0.5%. As for individual stocks, Starbucks announced the elimination of 1,100 corporate jobs in a move aimed at increasing efficiency, leading to a decline of 2% in its share price. Meanwhile, Domino’s Pizza reported lower-than-expected US sales growth in the fourth quarter, resulting in a 3% drop.
On the positive side, Berkshire Hathaway provided a bright spot by reporting a 71% surge in operating earnings for the fourth quarter. The conglomerate benefited from higher interest rates boosting investment income and improvements in its insurance business.
Despite some mixed economic news, Wall Street strategists remain optimistic about the medium-term outlook for US equities. Morgan Stanley strategist Michael Wilson had previously maintained a bearish stance on US stocks until mid-2024 but now expects capital to return to US markets. Similarly, JPMorgan Chase strategist Mislav Matejka suggested that US earnings growth would need to significantly underperform the rest of the world to justify an outright bearish view on American markets.
As we approach the end of the week, investors will be paying close attention to key economic reports and Nvidia’s earnings report, which may trigger significant market movements.
