Wall Street sees bumpy start to new year

NEW YORK — A weak start to 2024 had Wall Street on Tuesday giving back a bit of its powerful gains from the year before.

The S&P 500 slipped 27.00 points, or 0.6%, to 4,742.83 after coming into the year at the brink of its all-time high. The Dow Jones Industrial Average edged up 25.50, or 0.1%, to 37,715.04, and the Nasdaq composite led the market lower with a drop of 245.41, or 1.6%, to 14,765.94.

Some of the market’s sharper drops came from stocks that were last year’s biggest winners. Apple lost 3.6% for its worst day in nearly five months, and Nvidia and Meta Platforms both fell more than 2%. Tesla, another member of the “Magnificent 7” Big Tech stocks that drove well over half of Wall Street’s returns last year, swung between losses and gains before ending the day down by less than 0.1%.

Health care stocks held up better after Wall Street analysts upgraded ratings on a few, including a 13.1% jump for Moderna. Amgen’s 3.3% gain and UnitedHealth Group’s 2.4% climb were two of the strongest forces lifting the Dow.

Much of Wall Street had been preparing for at least a pause in the big rally that carried the S&P 500 to nine straight winning weeks and within 0.6% of its record set almost exactly two years ago. That big surge came on hopes the Federal Reserve may have engineered a perfect escape from high inflation: one where high interest rates slow the economy enough to cool inflation but not so much that they cause a painful recession.

Now, the hope is that the Fed will shift sharply in 2024 and cut interest rates several times. Cuts can relax the pressure on the economy and boost prices for investments. But even though such hopes are high, it’s still not assured. And prices for stocks and bonds have already rallied hard on expectations for them.

Indexes fell 1.5% in Hong Kong and 0.4% in Shanghai amid worries about China’s manufacturing and property sectors. South Korea’s Kospi gained 0.5%, and indexes were mixed across much of Europe. Japan’s markets were closed for a holiday.