‘Magnificent Seven’ Selloff Drags Down US Stocks: Markets Wrap

(Bloomberg) — The world’s largest stock market lost steam in the final stretch of a stellar year, led by a rout in big tech.

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The S&P 500 trimmed this week’s advance and the Nasdaq 100 lost over 1%, with Tesla Inc. and Nvidia Corp. down at least 2.4% on Friday. That’s after a torrid surge that saw the top technology stocks dubbed “Magnificent Seven” accounting for more than half of the US equity benchmark’s performance in 2024.

“It’s fair to say that this recent dip in stocks has taken the euphoria out of individual investors, but it has not dented advisors’ sentiment,” said Tom Essaye at The Sevens Report.

His takeaway is that sentiment is no longer euphoric and markets will start the year with regular investors much more balanced in their outlook — and that would be a “good thing as it reduces air pocket risk”, but advisors have largely ignored the volatility of the last few weeks.

“And if we get bad political news or Fed officials pointing towards a “pause” in rate cuts, that likely will cause more short, sharp drops,” Essaye concluded.

Some of the main moves in markets:

Stocks

The S&P 500 fell 0.7% as of 9:57 a.m. New York time
The Nasdaq 100 fell 1.3%
The Dow Jones Industrial Average fell 0.2%
The Stoxx Europe 600 rose 0.6%
The MSCI World Index fell 0.4%

Currencies

The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0427
The British pound rose 0.3% to $1.2568
The Japanese yen was little changed at 157.87 per dollar

Cryptocurrencies

Bitcoin fell 0.2% to $95,491.29
Ether rose 0.6% to $3,353.78

Bonds

The yield on 10-year Treasuries advanced one basis point to 4.59%
Germany’s 10-year yield advanced six basis points to 2.38%
Britain’s 10-year yield advanced four basis points to 4.62%

Commodities

West Texas Intermediate crude rose 1.2% to $70.47 a barrel
Spot gold fell 0.7% to $2,616.24 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Robert Brand, Julien Ponthus and Chiranjivi Chakraborty.