Stock Market Dips as Nasdaq Falls and Bitcoin Hits New Highs

On Tuesday, US stocks experienced a downturn, distancing themselves further from recent record highs as concerns over interest rates and the resilience of technology stocks introduced caution into the market.

Contracts tied to the Nasdaq Composite (^IXIC), dominated by tech giants, led the decline, plummeting approximately 1.8% as the ongoing decline in Apple (AAPL) and Tesla (TSLA) continued to exert pressure on the broader market.

The S&P 500 (^GSPC) witnessed a drop of about 1%, while the Dow Jones Industrial Average (^DJI) edged approximately 0.8% lower following a sluggish start to the week.

Despite the broader market retreat, Bitcoin (BTC-USD) surged to a new all-time high, briefly surpassing its previous peak of $68,789 from November 2021. However, it later retreated to hover around $65,000 per coin.

There's now speculation as to whether the tech-driven gains fueling the recent market rally have reached their peak, with negative news dampening the "fear of missing out" (FOMO) that has kept investors engaged.

Additionally, confidence in potential Federal Reserve easing took a hit after remarks by policymaker Raphael Bostic, President of the Atlanta Fed, who suggested only one rate cut may occur this year, penciled in for the third quarter.

Investor attention now turns to Fed Chair Jerome Powell's testimony to Congress on Wednesday, with his remarks closely scrutinized for any deviation from the prevailing stance that policymakers must be convinced inflation is subdued before taking action.

In corporate news, Apple faced pressure following reports of a 24% drop in iPhone sales in China, compounded by Monday's losses following a $2 billion EU antitrust fine. Tesla continued its decline amid concerns over a slowdown at its Berlin Gigafactory, exacerbating worries about shipment delays and a price war in China.

Meanwhile, Target (TGT) exceeded Wall Street forecasts with its earnings, leading to a more than 10% increase in its share price.

In the commodities market, gold surged to new highs on Tuesday, buoyed by expectations of rate cuts and ongoing geopolitical tensions. Gold futures (GC=F) peaked at $2,150.50 earlier in the day, while spot gold touched a high of $2,141.79 before retreating. The precious metal, often considered a safe haven in times of uncertainty, tends to rise when the US dollar weakens and interest rates fall.

Looking at cryptocurrency markets, Bitcoin reached a fresh all-time high of $68,869 before retracing to trade around $67,000 per coin. The surge in Bitcoin prices coincided with US regulators' approval of spot Bitcoin exchange-traded funds (ETFs) launched in January, which generated over $4.2 billion in net new flows within a month.

Other cryptocurrencies, like Ethereum (ETH-USD), also experienced significant gains amid Bitcoin's surge, with Ether prices climbing 66% since the beginning of the year to trade around $3,800 per coin.

As the market digests these developments, analysts and experts are likely to provide their insights and analyses, offering perspectives on potential market movements leading up to the election and beyond.

Also Read: US Stock Futures Slip as Tech Giants Decline Ahead of Economic Indicators