IXIC: Nasdaq Composite Sheds 2% as Tech Shares Tumble on New Inflation Jitters

Release of Fed minutes later today will give investors a glimpse into how officials see the path of interest rate cuts ahead.

• The Nasdaq Composite IXIC skittered down roughly 2% on Tuesday after fresh inflation data spooked risk lovers. Investors dumped stocks left and right but the ones first out the door were the high-growth, high-risk shares of technology companies. Nvidia NVDA wiped out $230 billion from its valuation, Tesla TSLA sank 4% and Amazon AMZN fell 2.4%. The red was all over the place.
• December’s price growth in the services industry spiked to 64.4, coming way above estimates of 57.5 (anything above 50 is expansion). More precisely, services activity increased to a high not seen since January 2024. The bump was likely driven by higher transportation costs and delivery fees in the holiday season. But all that growth affects the Federal Reserve’s stance on the economy and the level of interest rates. And that’s what markets worry about.
• Odds of an interest rate cut later this month were axed in half to 4.8% from 8.6% prior to the data dump, according to the CME FedWatch Tool. And without skipping a beat, investors are shifting their focus to the looming Fed minutes due today where we’ll get to see what policymakers discussed three weeks ago at their final meeting of 2024. Then on Friday all eyes will be on the jobs report. Expect heightened volatility all throughout the week.