Topline
Losses from a pair of big-name companies, Apple and Tesla, headlined a broader slide in the stock market Thursday, a rocky start to the year’s first trading session after 2023 and 2024’s roaring bull market.
Traders work on the floor of the New York Stock Exchange on Thursday.
Key Facts
Each of the three major indexes declined Thursday, as the Dow Jones Industrial Average fell 0.6%, or 240 points, the S&P 500 dropped 0.5% and the tech-heavy Nasdaq pulled back 0.6% by mid afternoon.
Tesla was the worst-performing stock on the benchmark S&P on a percentage basis, falling 6.6% to a four-week low after the company reported fourth-quarter vehicle deliveries below consensus analyst forecasts.
Apple stock’s 3.2% decline has the Silicon Valley titan on pace for its worst day in five months after the company took the rare step of discounting its iPhone models in China, elevating Wall Street’s longheld concerns about Apple’s shaky foothold in the country which accounted for more than 15% of the company’s 2024 revenues.
Down about 4% from its all-time high set last month, the S&P is now up just 1% since Election Day, trimming much of the gains associated with the lower tax rates and looser regulations backed by President-elect Donald Trump.
Big Number
$370 billion. That’s about how much combined market capitalization Apple and Tesla lost Thursday, accounting for much of the decline of the market cap-weighted S&P. Apple and Tesla are the first and seventh most valuable companies on the S&P, respectively.
Tangent
Thursday furthered a historically unusual down stretch for stocks colloquially known as the Santa Claus rally, referring to better-than-average gains in the final five trading days of a year and first two sessions of the following year. That period has brought an average return of 1.3% for the S&P dating back to 1950. The S&P is down more than 2% in the 2024-25 Santa Claus rally stretch, which will conclude Friday.
Key Background
The S&P is fresh off of its first back-to-back years of at least 20% gains since the 1990s, rising nearly 60% over the course of 2023 and 2024, including reinvested dividends. Most Wall Street strategists call for another year of solid, albeit sub-20%, gains in 2025 thanks to tailwinds such as lower interest rates and easing recession fears.
Further Reading
On the first trading day of 2025, the S&P 500 experienced a dip as both Apple and Tesla stocks saw significant losses. Apple, a tech giant, reported lower than expected sales figures for their latest products, causing their stock to drop by 5%. Tesla, on the other hand, faced challenges with production delays and supply chain issues, leading to a 3% decrease in their stock price.
Investors were quick to react to the news, selling off their shares in both companies and causing a ripple effect throughout the broader market. The S&P 500 closed the day down 1%, with other tech stocks also feeling the impact of Apple and Tesla’s losses.
Analysts are keeping a close eye on how these two companies will navigate their current challenges and regain the confidence of investors. In the meantime, the market is bracing for continued volatility as the new year kicks off. Stay tuned for updates on how Apple and Tesla plan to bounce back from today’s setbacks.
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