Traders work at the New York Stock Exchange on January 10, 2025 in New York City.
Spencer Platt | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open informs investors about everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Nasdaq continues to lag behind other major indexes
The S&P 500 and Dow Jones Industrial Average rose on Tuesday, but Nasdaq Composite pulled, making it the second day is weaker. European Stoxx 600 index decreased by 0.08%, give up previous gains. BP fell 2.5% after the oil giant he said fourth-quarter profits will rise by $300 million due to weaker refinery margins.
Meta cuts jobs while Microsoft freezes hiring
Target it will be lays off about 5% of its worst-performing employeesconfirmed to CNBC on Tuesday. CEO Mark Zuckerberg informed employees of the decision in a memo posted Tuesday on an internal company forum. Separately, Microsoft plans to pause employment in part of its consulting activity in the US, according to an internal memo.
SEC Sues Musk Over Twitter Shares
SEC filed a lawsuit against Elon Musk on Tuesday, alleging the billionaire committed securities fraud in 2022 by failing to disclose his holdings on Twitter and buying shares at “artificially low prices.” Before Musk took over Twitter in 2022, he built a position in the company of more than 5%, which would have required him to take his holdings public within 10 calendar days of reaching that threshold.
Slower growth in producer prices
US producer prices in December increased by 0.2 percent in the monthaccording to a Report of the Bureau of Labor Statistics Tuesday. That was lower than the 0.4% gain in November, as well as the Dow Jones consensus estimate of 0.4%. On an annual basis, the total producer price index rose 3.3% for 2024, compared to an increase of 1.1% in 2023.
Gainers and losers from US dollar strength
The U.S. dollar index — which measures the greenback against a basket of rivals — hit its highest level in more than two years on Monday, following a hotter-than-expected U.S. jobs report last week. They are here the biggest winners and losers in Europe from the jump in the dollar, according to analysts.
[PRO] Nasdaq selloff minor adjustment?
On Tuesday, the Nasdaq Composite fell for the fifth straight day. However, some wealth managers say it could be a minor adjustment for the market rather than the start of a downturn. They explain why they are not too worried about selling out.
Conclusion
The technological decline of the market has not yet stopped.
The Nasdaq Composite lost 0.23%, underperforming the S&P 500 and Dow Jones Industrial Average — which gained 0.11% and 0.52%, respectively — for the second day in a row. All shares of the Magnificent Seven fell, with Meta, Tesla and Nvidia registering the biggest losses, respectively.
Adding to the sector’s woes, the decline in tech stocks was accompanied by news of layoffs and hiring freezes.
To cut costs, Microsoft will pause hiring in part of its consulting unit, cut travel expenses and marketing expenses, according to an internal memo.
Meanwhile, Meta announced in an internal memo on Tuesday that it would “exit approximately 5% of our worst performers.” (Just like you “get out” of fact-checking or “into” free speech, I guess.) Zuckerberg also warned employees that 2025 “will be an intense year.”
Zuckerberg’s warning was aimed at Meta, of course, but it could also apply to tech companies struggling to make big investments in artificial intelligence without necessarily having the revenue to justify such high capital expenditures.
As we head into the fourth quarter earnings season, however, there are signs of optimism in the business environment for this year.
“We think earnings will be higher,” said Jay Hatfield, founder of Infrastructure Capital Advisors.
“The economy is strong in the fourth quarter. Typically, companies know if they’re in trouble by then, and they’re likely to be pretty bullish about the future because the Trump administration is pro-business. So we think most CEOs are pretty bullish about the 2025 forecast.”
Perhaps bullish CEOs are steering other sectors, as suggested by investor movements, which moved from technology to utilities, financials and materials on Tuesday.
Whether that sectoral rotation continues will depend on the consumer price index, which will drop later today.
— CNBC’s Lisa Kailai Han, Hakyung Kim and Brian Evans contributed to this report.
