Tech stocks drop, investors bet on Fed cuts

Tech stocks have had a tumultuous start to the year, with the Nasdaq Composite Index declining in the first three days of January.

On January 2, the S&P 500 and Nasdaq Composite closed lower, influenced by a fall in Apple shares after a broker downgrade and declines among other big-tech names.

The Nasdaq led the market lower with a drop of 1.6%, with some of the market’s sharper drops coming from stocks that were last year’s biggest winners, such as Apple, Nvidia, and Meta Platforms.

This decline followed a year where the Nasdaq climbed 43% in 2023, one of its best performances in two decades.

The drop in tech stocks continued on January 3, with the Nasdaq Composite Index declining 1.6%, dragged down by the same big names, including Apple and Nvidia, that propelled it 43% higher last year.

Despite this, investors are still betting on easing financial policy, including several cuts from the Federal Reserve in 2024, and that technology stocks will continue to perform well in the coming year.

The outlook for tech stocks in 2024 remains mixed, with some analysts predicting a surge in AI-linked tech stocks, while others caution about potential challenges and competition for specific companies.