Dow Jones and S&P500: Futures Slide as Tesla and Nvidia Lead US Stock Selloff

Stock Futures Slide as Dow Drops 400 Points in Year-End Trading

Stock futures declined sharply on Monday as investors took profits following a strong year, with the Dow Jones Industrial Average falling over 400 points. Despite the dip, major indexes remain on track for solid annual gains, reflecting overall market strength in 2024.

Broad-Based Indexes: Pullback Across Major Averages

Futures tied to the Dow Jones Industrial Average dropped 422 points, or 1%, while the S&P 500 and Nasdaq-100 lost 1.2% and 1.4%, respectively. These declines follow a series of winning quarters, with the Nasdaq poised to close its longest quarterly winning streak since 2021.

For the year, the S&P 500 has risen more than 25%, and the Nasdaq is up over 31%, underscoring strong tech-sector performance. The Dow’s more modest 14% gain reflects continued investor interest in blue-chip stocks, though it lags behind the broader tech rally. Monday’s pullback likely reflects light trading volumes and year-end profit-taking rather than fundamental shifts in market sentiment.

Sector Performance: Tech Leads Declines Amid Bond Yield Pressure

Technology stocks bore the brunt of Monday’s losses as investors reduced exposure to high-performing growth names. Nvidia and Amazon each slipped more than 1% in premarket trading, while Tesla shed 2.3%. Palantir Technologies, the top-performing stock in the S&P 500 with a 361% year-to-date gain, dipped 2.6%, reflecting profit-taking in the software sector.

Rising bond yields continue to weigh on growth sectors. The 10-year Treasury yield, which briefly exceeded 4.6% last week, eased Monday but remains elevated. This pressure on borrowing costs often triggers sector rotations out of tech and into more defensive or value-oriented areas.

Stock-Specific Movements: Boeing and Defense Stocks Diverge

Boeing shares fell 3% after South Korea ordered inspections of all 737-800 planes operated by domestic carriers. The move follows a deadly Jeju Air crash over the weekend, which killed all but two passengers on board. This incident marks the deadliest aviation accident in South Korea’s history, adding to Boeing’s ongoing regulatory and safety challenges.

In contrast, defense contractor V2X gained 4.2% after announcing a $170 million contract with the DEA, supporting optimism in the defense sector. Quantum computing stock Rigetti slid 5.1%, reversing part of its 1,600% year-to-date surge, reflecting volatility within emerging tech industries. KULR Technology dropped 3% after purchasing 217 bitcoins valued at $21 million, aligning with its bitcoin treasury strategy announced earlier this month.

Market Forecast: Where Could the Market Be Headed Next?

Despite short-term declines, the broader outlook for 2025 remains positive. Analysts highlight strong economic tailwinds and potential shifts in Federal Reserve policy that could support further market growth.

While profit-taking may continue in the final trading days of December, historical patterns suggest a rebound could emerge in early January. Traders are closely monitoring for a potential Santa Claus Rally, with the S&P 500 averaging a 1.3% gain during this period since 1950.

More Information in our Economic Calendar.