Wall Street’s new year hangover sends Big Tech stocks lower

Stay informed with free updates

Simply sign up to the US equities myFT Digest — delivered directly to your inbox.

Wall Street stocks have begun the year with a technology-led hangover after the rally that ended 2023 turned cautious, sending tech stocks to their worst day in more than two months.

The Nasdaq Composite closed down 1.6 per cent for its weakest performance since October 26 while the blue-chip S&P 500 ended down 0.6 per cent — its poorest day in almost a fortnight.

Chipmakers and Apple headlined the tech fallers dragging the Nasdaq and the S&P lower. The consumer tech giant dropped 3.6 per cent for its weakest showing in almost four months after Barclays analysts downgraded it to the equivalent of a “sell” rating — only the company’s second such rating from analysts in at least two years.

Tuesday’s declines followed a year in which stocks defied early gloom to roar higher, pushing the S&P up nearly 25 per cent for 2023 — its third- best performance in the past decade — to within sight of a record high. 

Market optimism surged anew last month after the Federal Reserve surprised investors by signalling an end to its interest rate rises and hinting at potential cuts to come.

The S&P’s 4.4 per cent rally in December took its rise from its October low to 15 per cent. The strength of those gains prompted Tuesday’s caution, participants said. 

“It’s natural that after such an amazing rally we see the market taking a bit of a breath and reassessing the odds of a perfect soft-landing scenario,” said Amélie Derambure, senior multi-asset portfolio manager at Amundi. “We can’t have it all. It’s unlikely that we’ll have at the same time a perfect soft landing and a perfect disinflation momentum.”

Some also cited Monday’s earthquake in Japan and Middle East tensions boosting oil prices as reasons for the sell-off, although not all agreed.

While such factors “haven’t helped concerning this morning’s market picture, they…