Traders work at the New York Stock Exchange on January 10, 2025 in New York City.
NYSE
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. Asia-Pacific markets mostly rained on Wednesday. of Japan Nikkei 225 lost about 0.1% as Reuters Tankan survey for January determined the growth of business sentiment in the country.
South Korean President Yoon arrested
Yoon Suk Yeol, the president of South Korea, was arrested on Wednesday State Office for Corruption Investigation for High Officials. A first for a sitting South Korean leader, the arrest was the CIO’s second attempt after the first was foiled by the president’s security staff. South Korean stocks had a muted reaction to the news.
The implications of the global bond sell-off
AND the sell-off in global bond markets is acceleratingboosted by the prospect of a smaller U.S. interest rate cut and rising government debt, analysts told CNBC. Higher yields raise the cost of borrowing for governments and businesses, potentially forcing higher taxes and reducing corporate profits. Rising US yields are also putting pressure on other currencies and making it harder for global central banks to cut rates.
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
The SEC filed a lawsuit against Elon Musk on Tuesday, citing the billionaire committed securities fraud 2022 without disclosing that he had acquired an active stake in Twitter, a secrecy that allowed him to buy shares at “artificially low prices.”
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Conclusion
The technological shift of the market has not stopped yet.
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 record the biggest losses.
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, of course, aimed at Meta, 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 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.
