On Thursday, the New York Stock Exchange experienced a widespread decline.
Concerns about inflation hampered investor sentiment.
As a result, the Nasdaq index fell below the 20,000 mark in just one day.
Nvidia and Tesla also saw declines.
Nasdaq Falls Below 20,000 in Just One Day
The Nasdaq index, which set a new record by surpassing the 20,000 mark for the first time the previous day, dropped below the figure the next day.
It closed at 19,902.84, down 132.05 points (0.66%), marking the largest drop among the three indices.
The S&P 500, which best reflects market situation, fell 32.94 points (0.54%) to close at 6,051.25, while the Dow Jones Industrial Average, composed of 30 large-cap stocks, dropped 234.44 points (0.53%) to finish at 43,914.12.
Rising Concerns About Inflation
Investors have begun to worry about inflation again.
While expectations remain unchanged that the Federal Reserve will cut rates by an additional 0.25 percentage points at the Federal Open Market Committee (FOMC) meeting on December 17-18, concerns have grown that the trajectory for rate cuts next year may change.
The November Producer Price Index (PPI) released that day triggered these worries.
The PPI rose 0.4% compared to the previous month, exceeding the market forecast of a 0.2% increase.
The core PPI rose by 0.2%, excluding the energy and food sectors, to reduce monthly volatility, which aligned with expectations. However, investors became concerned that the decline in U.S. inflation might be stalling.
The November Consumer Price Index (CPI), released the previous day, matched market expectations but confirmed an increase compared to October.
Experts are adjusting their forecasts accordingly. While they predict that the Fed will likely lower rates next year, they expect two rate cuts by 0.25 percentage points each, for a total of 0.5 percentage points.
Weakness in M7 Stocks
M7 big tech stocks generally performed poorly.
Nvidia reversed course and closed down $1.97 (1.41%) at $137.34.
In contrast, Microsoft (MS) rose by $0.57 (0.13%) to $449.56. During the trading session, MS briefly surpassed Nvidia to become the second-largest company by market capitalization.
However, in the latter half of the day, MS’s gains narrowed while Nvidia reduced its losses, keeping the market cap rankings unchanged. MS’s market cap stood at $3.34 trillion, while Nvidia’s shrank to $3.6 trillion. However, the gap between the two stocks’ market caps has narrowed, making a reversal in rankings possible at any time.
Apple, the largest company by market capitalization, closed up $1.47 (0.60%) at $247.96, solidifying its position with a market cap of $3.75 trillion.
Tesla took a breather, finishing down $6.67 (1.57%) at $418.10.
Alphabet, which had recently seen a sharp rise, also declined by 1.6%, closing at $193.63, $3.08 (1.57%) lower.
Amazon dropped $1.29 (0.56%) to $228.97, while Meta Platforms closed down $1.89 (0.30%) at $630.79.
International Oil Prices Fall After Four Days
International oil prices turned downward after four days.
Concerns about oversupply pulled the prices down.
The International Energy Agency (IEA) projected in its monthly oil market report that even if OPEC+ postpones its production increase, it will face an excess supply of 1.4 million barrels per day next year.
The IEA also anticipated that the global oil market would still see a surplus of 950,000 barrels per day even if the production increase was canceled.
As a result, international oil prices fell for the first time in four days. However, the decline was not significant due to the ongoing geopolitical uncertainties.
Brent crude oil, the benchmark for international oil prices, fell $0.11 (0.15%) to $73.41 per barrel for February delivery.
West Texas Intermediate (WTI), the U.S. benchmark, closed down $0.27 (0.38%) at $70.02 per barrel for January delivery.
