Stocks Slide for Second Day with Tech Giants Leading the Decline, Despite Year-to-Date Gains
Stocks Slide for Second Day with Tech Giants Leading the Decline, Despite Year-to-Date Gains
By:JJ Kinahan
But the market has gained for the year, and Bitcoin and gold have reached record highs
- Equities dipped for the second consecutive day, but strong year-to-date gains are signaling resilience.
- Bitcoin hit a new all-time high, while gold surged, highlighting investor appetite for alternative assets.
- Caution is warranted as bond and gold rallies hint at potential market volatility ahead.
Stocks extended losses yesterday for the second day, with the S&P 500 slipping 1% and the Nasdaq Composite tumbling 1.7%. Despite the recent downturn, both indices maintain year-to-date gains exceeding 6%, with nine of 11 S&P sectors showing positive performance.
Among the notable decliners were Tesla (TSLA), down nearly 4%, Microsoft (MSFT), which fell 3%, and Apple (AAPL), dipping just under 3%. Facebook's parent company, Meta (META), saw a 1.5% drop following widespread outages across its platforms, initially attributed to hackers but later refuted.
Bitcoin and gold soar
Bitcoin surged to a new all-time high surpassing $69,000 before retracing slightly, while gold also reached a record high, closing at $2,133.50. Better-than-expected earnings for Target (TGT), coupled with the launch of its Target Circle 360 program, drove its shares up 12%. CrowdStrike Holdings (CRWD) also surged 22% post-earnings.
Conversely, Footlocker (FL) shares dipped 10% premarket after the company issued a subdued outlook.
The surge in gold and bond prices raises cautionary flags for equities, as two out of three traditional warning indicators, alongside market volatility measured by the VIX, show recent upticks. This move toward safer assets amidst record equity highs is expected.
However, an increase in the VIX could signal potential concerns.
Intel on the horizon
Upcoming events, such as the job openings report (JOLTs) and Jerome Powell's Congressional testimony, followed by the February jobs report release on Friday, could impact market sentiment. Monitoring bonds, gold and the VIX for potential signals of equity market stability will be crucial.
Investors are advised to maintain focus on long-term investment objectives and strategies amid market fluctuations.
JJ Kinahan is CEO of IG North America—which includes tastylive, tastytrade and IG's FX Business. Kinahan traded for 21 years at the Chicago Board Options Exchange. He serves on the CBOE Advisory Board and the SIFMA Options Committee. @thejjkinahan
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