Tech and AI stocks like Broadcom, Amazon, and Rivian caused market decline without Santa Claus rally

From Nasdaq: 2024-12-27 15:07:58

Artificial intelligence and tech stocks caused the Nasdaq Composite to drop by 2.4%, with the Dow Jones also losing up to 500 points. Companies like Broadcom, Amazon, and Rivian saw their shares decline by close to 2-3% today. The lack of a Santa Claus rally has surprised investors in this holiday-shortened week.

Despite the usual year-end rally, the market has struggled, with the S&P 500 down 0.4%. Big tech and AI names like Amazon and Broadcom led the decline today. The 10-year Treasury yield rose above 4.60%, the highest since May, impacting riskier stocks. The Fed’s stance on rate cuts has also influenced market sentiment.

Investors are cautiously watching the market sell-off due to the high valuations of tech and AI stocks, along with rising yields. The holiday week may have contributed to the decline, with Amazon, Broadcom, and Rivian facing scrutiny. Analysts predict a broader market in 2025, as the current market dynamics shift.

The Motley Fool’s Stock Advisor team has identified the 10 best stocks to buy now, excluding Broadcom. Investors are advised to consider the impact of elevated yields on stock valuations and profitability. Past recommendations like Nvidia have shown significant returns, emphasizing the importance of careful stock selection.

John Mackey, former CEO of Whole Foods Market and a member of The Motley Fool’s board, has no positions in the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Broadcom, with a disclosure policy in place. The views expressed are of the author and not necessarily Nasdaq, Inc.’s.



Read more at Nasdaq: Forget the Santa Claus Rally — Artificial Intelligence Stocks Like Broadcom, Amazon, and Rivian Dragged the Stock Market Down Today