Stock Market Update

[BRIEFING.COM] The stock market started the new week with sharp declines after Friday's rebound. Technical factors were in play as the Nasdaq Composite (-4.0%) moved further into correction territory (i.e. a 10% decline from its high) and the S&P 500 (-2.7%) dropped below its 200-day moving average (5,734) again. It's the first time the index closed below that key level since November 2023, marking a 8.7% decline from its all-time high.

Another factor that contributed to the selling activity was ongoing fears about economic growth after President Trump said in a weekend interview that the economy is going through a "period of transition" and he declined to answer directly if the U.S. will experience a recession.

Continued fallout in the mega cap space played a big role also. Tesla (TSLA 222.15, -40.52, -15.4%) tumbled 15% after Bloomberg reported sales are struggling in China and after UBS lowered its price target to $225 from $259. This left shares 53.7% lower than their record closing high of $479 on December 17.

NVIDIA (NVDA 106.98, -5.71, -5.1%), Microsoft (MSFT 380.16, -13.15, -3.3%), and Apple (AAPL 227.48, -11.59, -4.9%) were also among the losing standouts in the space. 

The disappointing price action became its own downside catalyst, drawing in more selling interest that impacted many stocks. Nine of the 11 S&P 500 sectors registered declines and the equal-weighted S&P 500 slid 1.4%.

Some individual stocks avoided selling due to specific catalysts. Redfin (RDFN 9.77, +3.95, +67.9%) shares surged after news that Rocket Companies (RKT 13.35, -2.42, -15.4%) is acquiring RDFN for $12.50 per share in a stock transaction. 

Expand Energy (EXE 99.09, +3.06, +3.2%) was another outperformer after news late Friday that it will replace FMC Corp. (FMC 41.58, +0.29, +0.7%) in the S&P 500, effective prior to the open of trading on Monday, March 24.

Treasuries saw some safe-haven buying in another manifestation of growth concerns. The 10-yr yield fell ten basis points to 4.21% and the 2-yr yield fell ten basis points to 3.90%. The rally in the Treasury market resulted in the lowest settlement for the 2-yr yield since early October while the 10-yr yield returned back below its 200-day moving average (4.234%).

There was no US economic data of note today.

• Dow Jones Industrial Average: -1.5% YTD
• S&P 500: -4.5% YTD
• S&P Midcap 400: -6.4% YTD
• Nasdaq Composite: -9.5%
• Russell 2000: -9.5% YTD

Looking ahead to Tuesday, market participants receive the following economic data:

• 6:00 ET: February NFIB Small Business Optimism Index (prior 102.8)
• 10:00 ET: January job openings (prior 7.600 mln)