S&P 500 closes slightly lower as stocks’ early 2024 struggles linger: Live updates

Stocks largely fell on Tuesday.

• The S&P 500 lost 0.15% to end at 4,756.50.
• The Nasdaq Composite advanced 0.09% to settle at 14,857.71.
• The Dow Jones industrial Average shed 157.85 points, or about 0.4%, to close at 37,525.16.

— Pia Singh

Top Wall Street strategist Marko Kolanovic said a host of negative forces are forming that may potentially weigh on stock performance after a strong 2023, including more stubborn inflation, rising geopolitical risks and overbought conditions.

"The disinflation thesis is likely to be challenged during 1H24 as the disinflation process stalls, equities appear overbought given low implied cash allocations and low short interest, and risks are rising for geopolitics to drive both a risk-off shift and a boost to inflation via increased shipping costs," JPMorgan's Kolanovic said in a note.

— Yun Li

Valkyrie Investments chief investment officer Steven McClurg said Tuesday afternoon that he thinks the Securities and Exchange Commission will likely make a decision on bitcoin ETFs on Wednesday, paving the way for funds to launch as soon as Thursday.

"I think that's definitely in the cards. I'd give it a 95% chance," McClurg said in an interview with CNBC.

Valkyrie is one of many firms that filed an amended registration document for a potential bitcoin ETF on Tuesday morning.

— Jesse Pound

The risk-reward for U.S. equities is skewed positively for 2024, according to market research firm Trivariate Research.

"We see the median stock's gross margins having troughed, as most companies' margins were statistically significantly sensitive to rising CPI," Adam Parker, Trivariate's chief executive officer and founder, wrote in a note this week. About three-quarters of the top 500 U.S. equities are forecasted to have margin expansion according to analysts' consensus expectations, he noted.

"Lower logistics costs, high productivity that can offset slowing wage inflation, and a weakening dollar all help...gross margin expansion, an accommodative Fed, and a growing belief that earnings can grow for several years would all be part of the bull case," Parker said.

Earnings should also grow throughout this year into next year, according to the firm. If earnings from the S&P 500 expand between 2021 and 2030 at a similar pace as they did between 2010 and 2019, what is "optically expensive today will eventually prove to be quite attractive," Parker said.

— Pia Singh

January's first few trading days indicate that equities could see a tough year, according to LPL Chief technical strategist Adam Turnquist.

"The negative First Five Days indicator follows a negative Santa Claus Rally period, which both point to weaker seasonality ahead," Turnquist said. "However, there is still hope for a positive January Barometer indicator with 16 trading days left this month."

According to Turnquist, when the first five trading days of January generate a positive return, the S&P 500 has historically generated an average annual return of 14.2% since 1950, with 83.3% of occurrences producing positive results.

When the broader market trades lower during the first five days—as has happened this year with the index down 0.1% over the period—average annual returns fall to only 0.3% with 53.8% of occurrences producing positive results, he noted.

The 'First Five Days of January' indicator is a theory that the market's full-year performance could be dictated by the first five trading days of the new year.

— Pia Singh

Asset management behemoth BlackRock is cutting 3% of its more than 19,000-strong workforce as it looks to "reallocate resources," the firm told employees Tuesday.

"As we prepare for 2024 and this very exciting but distinctly different landscape, businesses across the firm have developed plans to reallocate resources," BlackRock, which manages $9.1 trillion of client money, said in a memo. "Even with these changes, by the end of 2024, we expect to have a larger workforce as we continue adding people and building capabilities to support key areas of growth."

The cuts are expected to come from the asset management group and total around 600. Fox Business initially reported the story Saturday evening before the company announced its plans Tuesday.

BlackRock shares were off about 0.5% Tuesday afternoon.

—Jeff Cox, Leslie Picker

Oil prices bounced back Tuesday after yesterday's selloff.

The West Texas Intermediate futures contract for February rose $1.47, or 2.08%, to settle at $72.24 a barrel. The Brent futures contract for March gained $1.39, or 1.76%, to trade at $77.46 a barrel.

The two benchmarks settled more than 3% lower on Monday after Saudi Arabia slashed crude prices to Asian customers by $2 a barrel, heightening fears about global demand.

"Volatility is high and if you don't like the price just stick around," Phil Flynn with the Price Futures Group wrote in a note Tuesday morning.

Flynn said prices are bouncing back Tuesday because the selling yesterday was "out of balance."

Geopolitical risk also persists as tensions rise in the Middle East and Libya's largest oilfield remains shut down.

Stocks were broadly lower on Tuesday, but a few sector funds were still pushing higher.

Cybersecurity ETFs were among the biggest winners, fueled by big days for CrowdStrike and Juniper Networks. The First Trust Nasdaq Cybersecurity ETF (CIBR) and iShares Cybersecurity and Tech ETF (IHAK) each rose about 2%.

Some health care funds also rose modestly, with the Vanguard Health Care Index Fund (VHT) up about 0.2%.

— Jesse Pound

Bill Gross, a widely followed investor once known as the bond king, said he's steering clear of Treasuries, adding that the 10-year bonds are "overvalued" at 4%.

"On the bond front UST 10 yr at 4% is overvalued while 10 year TIP at 1.80 is the better choice. If you need to buy bonds. I don't," he said in a post on X, formerly known as Twitter.

The former chief investment officer and co-founder of Pimco has been touting arbitrages in merger and acquisition deals. He said he's still favoring an arb play in Capri Holdings. Tapestry in early August struck a deal to acquire Capri for $57 per share in cash.

— Yun Li

Bank of America reported clients sold equities at volumes not seen since July as the market struggled last week.

The S&P 500 ended last week down, snapping a nine-week winning streak. As the market faltered, Bank of America clients sold about $2.1 billion of equities in the week. That's the largest weekly outflow since July, according to Jill Carey Hall, a strategist at the firm.

Selling was seen across client groups, with hedge funds leading the charge in their seventh consecutive week of outflows.

Exchange-traded funds alone saw the largest outflow volume since January 2023. Most sectors were in sold territory, led by financial names.

— Alex Harring

2024 has barely begun, but there are already 27 stocks that have dipped more than 5% through Monday's close.

Of these names, nine stocks are from the technology sector — and more specifically, belong to the semiconductor group, according to a tweet from Bespoke Investment Group, led by co-founder Paul Hickey.

Here are the nine technology names that have already slid 5% or more in 2024:

• Enphase Energy
• NXP Semiconductors
• ON Semiconductor
• Applied Materials
• Qorvo
• Monolithic Power Systems
• Skyworks Solutions
• Seagate Technology
• Microchip Technology

— Lisa Kailai Han

These are the stocks moving the most in midday trading:

• Unity Software — The gaming technology stock dropped 8% after announcing Monday it's cutting 1,800 positions, or about 25% of its workforce, as part of broader restructuring efforts.
• JetBlue — Shares of the airline carrier slid 9% after Bank of America downgraded the stock to underweight from neutral, pointing towards a tough outlook for domestic airlines.
• Juniper Networks — Shares of Juniper Network climbed 21% after The Wall Street Journal reported that the hardware company was close to being acquired by technology giant Hewlett Packard.

Read the full list of stocks moving here.

— Lisa Kailai Han

The Dow led the three major indexes lower in Tuesday morning trading, at one point falling more than 300 points.

The lion's share of the 30 stocks that comprise the blue-chip average traded lower in morning session. Dow, Inc., Walgreens, Chevron and Boeing were the worst performers, with all shedding more than 1.5%.

A handful of names were able to buck the downtrend. Notably, Merck was the biggest gainer in the session with 1.9% advance.

— Alex Harring

Of the 11 stock market sectors, healthcare stocks were the only to be trading higher on Tuesday.

The sector was up by nearly 0.4%. Week to date, healthcare stocks are nearly 1.2% higher.

The sector's gains were led by Illumina, up 7%, and Revvity, up 5%. Shares of both biotechnology firms popped after providing fourth-quarter revenue guidance that came above analyst expectations.

After healthcare, the communication services sector hovered around the flatline. The biggest losers were the energy and materials sectors, down 1.6% and 1.4% for the day.

— Lisa Kailai Han

The fee war for bitcoin ETFs is heating up, even if the funds have yet to be approved by regulators.

In a fresh round of updated filings on Tuesday, Valkyrie cut the proposed fee for its fund to 0.49% from 0.80%. The Invesco and Galaxy Digital fund lowered its proposed fee to 0.39% from 0.59%. Both funds had filed the previous proposals on Monday, but appear to have changed course after seeing competitor's filings.

Meanwhile, Bitwise already had the lowest proposed fee at 0.24%, and still lowered it to 0.20% on Tuesday.

— Jesse Pound

The U.S. trade deficit declined by a greater than expected margin in November as the goods shortfall with both Europe and China fell.

In a report Tuesday, the Commerce Department said the goods and services deficit decreased to $63.2 billion, a drop of $1.3 billion, or 2%, from October. The move mirrored lower shortfalls in both imports and exports on the month. Economists surveyed by Dow Jones had been looking for a deficit of $64.7 billion.

The goods deficit with the European Union decreased to $15.6 billion and to $21.5 billion with China.

—Jeff Cox

Samsung Electronic warned investors on Tuesday that it anticipates a 35% drop in operating profit in the fourth quarter, falling significantly short of expectations.

The South Korea-based maker of dynamic random-access memory chips said it's bracing for operating profit of 2.8 trillion South Korean won ($2.13 billion), versus an LSEG estimate of 3.7 trillion won.

Popular semiconductor and technology names showed signs of weakness during morning trading following the news. Memory chipmaker Micron Technology dropped nearly 2%, along with On Semiconductor, Monolithic Power Systems and Applied Materials. Lam Research, KLA Corp and Skyworks Solutions dipped at least 1%. Personal computer maker Hewlett Packard Enterprise shed more than 8%

Within the broader information technology space, Apple, Cisco Systems, Arista Networks and Oracle dipped about 1% each. The S&P 500 sector slumped 0.8%.

— Samantha Subin

Here's how the major indexes opened:

• The S&P 500 lost 0.6%.
• The Dow Jones Industrial Average lost more than 200 points, dropping 0.7% at the open.
• The tech-heavy Nasdaq Composite edged lower by 0.6%.

— Pia Singh

Check out some of the companies making headlines in premarket trading.

Unity Software — Shares climbed nearly 3% following news that the company would reduce its workforce by 25%, or about 1,800 employees.

Hewlett Packard Enterprise, Juniper Networks — Juniper Network stock soared more than 23% after a report from The Wall Street Journal said the company was close to finalizing a deal to be bought by Hewlett Packard Enterprise. Shares of Hewlett Packard Enterprise pulled back more than 9%.

Match Group — The Tinder owner climbed nearly 16% after a report from Reuters said activist investor Elliott Investment Management has built its stake in the company to about $1 billion.

Read the full list here.

— Brian Evans

Sentiment among small business owners improved in December but still held below the long-term average, the National Federation of Independent Business reported Tuesday.

The NFIB Small Business Optimism Index increased to 91.9, up 1.3 points and better than the Dow Jones estimate for 90.8. While the index showed improvement, this marked the 24th month in a row below the long-term average of 98.

While still on the pessimistic side, the share of small business owners expecting better business conditions over the next six months improved to a net negative 36%, up 6 points on a monthly basis and 25 percentage points better than a year ago.

—Jeff Cox

Shares of Juniper Networks jumped more than 23% in premarket trading Tuesday, continuing to rise after the Wall Street Journal reported on Monday evening that cloud-services provider Hewlett Packard Enterprise is in "advanced talks" to acquire the company for about $13 billion.

A deal between the two companies could be announced as soon as this week, the Journal reported. The acquisition could bolster HPE's efforts to challenge Cisco, which has long competed with Juniper in the networking equipment market.

Juniper's stock price underperformed the tech industry last year, losing about 8%. HPE added nearly 10%, on the other hand.

— Pia Singh, Jordan Novet

Netflix shares were down 2% in the premarket after the streaming giant received a downgrade from Citi. Analyst Jason Bazinet cited three reasons for lowering his rating on the stock, including lofty Street expectations that will be hard to meet.

The stock started 2024 on a sour note, losing 0.4%. It rallied 65% in 2023, however.

— Fred Imbert

Shares of major tech-related companies fell in the premarket as the benchmark 10-year Treasury yield ticked higher. Amazon, Apple, Meta Platforms and Alphabet were all down 0.4%, while Microsoft lost 0.6%.

The 10-year Treasury yield rose 4 basis points to 4.046%.

— Fred Imbert

Japan's Nikkei 225 hit a fresh 33-year high Tuesday, driven mostly by tech stocks. The index scaled an intraday peak of 33,969.17, its highest level since March 1990.

Top gainers on the Nikkei were chip-related stocks, that tracked gains in U.S. peers Nvidia and Advanced Micro Devices.

Semiconductor company Tokyo Electron and chip equipment supplier Advantest climbed as much as 4.87% and 8.36%, respectively.

Video-game company Nintendo was also among the top performers, gaining as much as 4.7%, as news swirled that the company might release a new game console this year.

— Lim Hui Jie

South Korean electronics giant Samsung Electronics said it expects to post a 35% drop in operating profit in the fourth quarter of 2023, missing expectations by a wide margin.

Samsung said that for the October-December quarter, operating profit was likely to be 2.8 trillion South Korean won ($2.13 billion), down 35% from the same period a year earlier when the firm reported an operating profit of 4.31 trillion won. Operating profit was 2.43 trillion won in the previous quarter.

The profit forecast fell far short of LSEG's SmartEstimate of 3.7 trillion won, which is weighted more heavily toward expectations of analysts who have been consistently more accurate.

Fourth-quarter revenue likely fell 4.9% from the same period a year ago to 67 trillion won, the firm said in the statement.

— Sheila Chiang

The headline inflation rate for Japan's capital city of Tokyo slowed to 2.4% in December, from 2.6% in the month before.

Inflation rate has declined for a second straight month and is at its lowest level in 18 months.

Tokyo's core inflation — which strips out prices of fresh food — remained unchanged at 2.1% in December, and came in line with expectations.

— Lim Hui Jie

Australia's retail sales surged 2% in November compared with the previous month, beating expectations from economists polled by Reuters.

The 2% increase was sharply higher than the 1.2% gain expected by the Reuters poll, and also a reversal from the 0.2% fall in October.

"The strong rise suggests that consumers held back on discretionary spending in October to take advantage of discounts in November," Robert Ewing, ABS head of business statistics at the Australian statistics bureau said.

"Shoppers may have also brought forward some Christmas spending that would usually happen in December," he added.

— Lim Hui Jie

Federal Reserve Governor Michelle Bowman indicated that the central bank's interest rate hikes are likely done – but she added that she's not prepared to begin trimming. 

Bowman spoke at a community bankers conference in South Carolina on Monday, where she highlighted the Fed's progress on reining in inflation through tight policy.

"Based on this progress, my view has evolved to consider the possibility that the rate of inflation could decline further with the policy rate held at the current level for some time," she said in prepared remarks.

If inflation continues to decline toward the Fed's stated 2% goal, Bowman noted "it will eventually become appropriate" to begin the process of dialing back rates.

However, the central bank still has work to do before cuts begin, she said. "In my view, we are not yet at that point," Bowman added.

Read more about Bowman's comments here.

-Darla Mercado, Jeff Cox

Check out the companies making headlines in after-hours trading.

• Unity Software — Unity Software shares jumped more than 3% after the maker of game engines used in the Angry Birds and Pokémon Go video games said it's cutting 25% of its workforce, or about 1,800 workers.
• Microchip Technology — Microchip Technology shares dropped more than 3% after the microcontroller maker cut its fiscal third-quarter revenue forecast, citing a "weakening economic environment." The company expects a 22% revenue decline in its third quarter, compared to prior guidance of a 15% and 20% drop.
• JetBlue Airways — JetBlue shares rose more than 1% after the company said President and Chief Operating Officer Joanna Geraghty will succeed Robin Hayes as CEO effective Feb. 12.

Read the full list here.

— Sarah Min

Stock futures opened slightly slightly lower Monday night.

Dow Jones Industrial Average futures fell by 41 points, or 0.11%. S&P 500 futures and Nasdaq 100 futures dipped 0.08% and 0.12%, respectively.

— Sarah Min