Tech Stock Pullback Weighing On Wall Street

Stocks have moved mostly lower during trading on Tuesday, giving back ground following the advance seen over the course of the previous session.

The tech-heavy Nasdaq is pulling back off yesterday’s record closing high, while the Dow is moving lower for the ninth consecutive session.

Currently, the major averages are off their lows of the session but still firmly negative. The Dow is down 252.87 points or 0.6 percent at 43,464.61, the Nasdaq is down 121.88 points or 0.6 percent at 20,052.01 and the S&P 500 is down 31.77 points or 0.5 percent at 6,042.31.

The weakness on Wall Street partly reflects a pullback by technology stocks, which helped lead the way higher in the previous session.

Networking stocks have shown a substantial pullback, with the NYSE Arca Networking Index tumbling by 2.4 percent after surging to a record closing high on Monday.

Significant weakness is also visible among semiconductor stocks, as reflected by the 2.0 percent slump by the Philadelphia Semiconductor Index.

Shares of Broadcom (AVGO) are giving back ground following a recent spike, while shares of Nvidia (NVDA) are seeing further downside after entering contraction territory on Monday.

Outside the tech sector, brokerage stocks are seeing considerable weakness on the day, dragging the NYSE Arca Broker/Dealer Index down by 1.9 percent.

Steel, gold and banking stocks are also seeing notable weakness, while pharmaceutical stocks are bucking the downtrend amid a surge by shares of Pfizer (PFE). Pfizer is jumping by 4.5 percent after forecasting 2025 revenues in line with estimates.

Meanwhile, traders continue to look ahead to the Federal Reserve’s highly anticipated monetary policy announcement on Wednesday.

While the Fed is widely expected to lower rates by another quarter point, traders are likely to pay close attention to the accompanying statement as well as officials’ latest economic projections, including their forecasts for rates.

Recent data showing inflation remains sticky has led to some worries the Fed will lower rates slower than previously anticipated next year.

Potentially adding to the concerns about the outlook for rates, the Commerce Department released a report this morning showing stronger than expected retail sales growth in the month of November.

“This report will likely add to the Fed’s debate about the policy path for 2025,” said Jeffrey Roach, Chief Economist for LPL Financial. “Unless the labor market materially weakens, investors should expect the Fed to ease rates next year but not as much as originally hoped. “

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. Japan’s Nikkei 225 Index dipped by 0.2 percent and China’s Shanghai Composite Index slid by 0.7 percent, while Australia’s S&P/ASX 200 Index advanced by 0.8 percent.

The major European markets have also turned mixed on the day. While the French CAC 40 Index is up by 0.3 percent, the German DAX Index is down by 0.2 percent and the U.K.’s FTSE 100 Index is down by 0.5 percent.

In the bond market, treasuries are seeing modest strength after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.6 basis points at 4.383 percent.

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