The stock market rollercoaster ride is continuing on Tuesday, with all major indices opening in the red after a strong performance on Monday. Why are stocks down today?
Well, traders appear to still be testing the legs of last year’s rally in 2024. Indeed, stocks started the year on a sour note, falling in the first several trading sessions after one of the strongest years for stocks in recent memory.
Most traders chalked this up to a technical pullback — investors selling off some of their profit after enjoying record gains. Hence, when Monday rolled around and both the Nasdaq Composite and S&P 500 had jumped back up 2.2% and 1.4% respectively, traders simply assumed the bull market was resuming.
If only the stock market was so simple. Today, the Nasdaq, S&P 500 and Dow Jones Industrial Average opened well in the red, confusing many investors. That said, there are still signs of life.
Indeed, after opening in the red, the Nasdaq is now back trading in the green. At the time of this writing, the index is up 0.13%.
So, what sectors are leading the downslide today?
Why Are Stocks Down Today?
Tech-maker Samsung seems to be behind today’s drop. The electronics company warned investors that its fourth-quarter profit may fall as much as 35% from last year, instilling fear in many investors that a tech slump could be on the way.
One of the largest makers of memory chips, smartphones and televisions, many investors view Samsung as a bellwether for the wider tech field. As such, the news has served to confirm long-held fears that the high interest rate environment is finally starting to take its toll on growth companies that rely on lower lending costs. Samsung shares fell 2.4% in South Korea, as the company has no American stock presence.
That said, Tesla (NASDAQ:TSLA) is another notable loser today. TSLA stock is down more than 2% as of this writing. The stock has also briefly flirted with a 3%-plus loss at about $232 per share, it lowest level since Nov. 13, if it were to have closed at that price point.
On that front, investors seem to be responding to an article from The Wall Street Journal alleging that CEO Elon Musk has engaged in illegal drug use over the past several years, fueling some of his “contrarian views.”
Still, TSLA stock remains a winner by and large. Shares of Tesla soared more than 100% in 2023.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
