The New York Stock Exchange saw a tumultuous day of trading on April 1, 2024, as the Dow Jones Industrial Average fell for a second consecutive day, signaling a lackluster start to the quarter for Wall Street. Bond yields increased, leading traders to lower their expectations of a potential interest rate cut by the Federal Reserve in June.
The 30-stock Dow dropped 488 points, or 1.2%, with the S&P 500 sliding 0.9% and the Nasdaq Composite shedding 1.1%. This rough start to the second quarter comes as inflation data remains high, pushing yields higher and reducing the likelihood of a rate cut by the Fed.
Greg Bassuk, CEO of AXS Investments, noted that the market was due for a correction after significant gains in the first quarter. Despite the sell-off, Sarat Sethi, managing partner at Douglas C. Lane & Associates, remained optimistic, calling it a “natural digestion” after rapid equity growth.
The market losses on Tuesday were influenced by disappointing first-quarter deliveries from Tesla, leading to a 5.5% plunge in their stock. Tech giants like Nvidia, Alphabet, and Microsoft also saw declines of around 1%. Additionally, health insurers took a hit after the Centers for Medicare & Medicaid Services announced a 3.7% increase in payments for Medicare Advantage and prescription drug coverage in 2025, causing stocks like Humana, UnitedHealth, and CVS Health to drop significantly.
With odds for a June rate cut now at about 58.8%, down from 70% a week ago, the question remains whether the momentum seen at the start of 2024 can continue if the Fed decides to keep rates unchanged. Despite the challenges, investors are keeping an eye on opportunities in sectors like energy, which showed strength amidst the market turmoil.
