Stock Market Today: Wall Street Plunges to Worst Day in Weeks; Bitcoin hits record before crashing | National business

NEW YORK (`) — The plunge in Big Tech stocks gave Wall Street its worst day in three weeks on Tuesday.

The S&P 500 fell 1% for the second straight day after closing at an all-time high last week. The Dow Jones Industrial Average fell 404 points, or 1%, and the Nasdaq composite led the market with a 1.7% decline.

Apple's 2.8% decline was one of the heaviest weights in the market. The company is grappling with concerns about sluggish iPhone sales in China, where tough competition and a weakening overall economy pose challenges.

Apple is one of several Big Tech stocks that have recently slipped under the weight of much higher expectations after rising significantly in price. Since the beginning of last year, a select group called the “Magnificent Seven” has been responsible for the majority of the S&P 500's record highs.

The declines in several of them were among the biggest falls in the S&P 500 on Tuesday. Microsoft fell 3%, Amazon fell 1.9% and Tesla lost 3.9%.

Investing in technology stocks has become one of the most popular moves on Wall Street among both mutual funds and hedge funds, according to strategists at Barclays Capital. This may increase the risk of a sharp decline later if momentum weakens, especially if criticism mounts that prices have become too expensive.

High-growth stocks generally rallied for several reasons, including enthusiasm for artificial intelligence technology. However, if they “fail to meet aggressive expectations, growth investors will likely be disappointed,” according to GMO's asset allocation team. the investment firm co-founded by Jeremy Grantham.

MicroStrategy fell 21.2% after announcing it will raise $600 million in debt, which it will use to purchase more bitcoin and for “general corporate purposes.”

Bitcoin briefly rose above $69,000 on Tuesday, surpassing its 2021 record, before falling back below $63,000. The increase is partly due to new exchange-traded funds that give investors easier access to cryptocurrency. It has roughly tripled in the last 12 months, but is notorious for large swings in either direction, which can be painful and sudden.

Target helped limit the market's losses after rising 12%. The company reported a bigger jump in profit for the end of 2023 than analysts expected as it kept a tight rein on some spending.

New York Community Bancorp also rose 17.9%, narrowing its weekly loss so far to 9.3%. The bank is under pressure due to losses related to investments in commercial real estate. The company is also under stricter regulatory scrutiny due to its acquisition of a large portion of Signature Bank, one of the banks that collapsed in the industry's mini-crisis last year.

Several analysts continue to believe that NYCB's problems are likely unique to NYCB and are not just a sign of impending trouble for banks in general, especially after the U.S. government's efforts last year to bolster the industry . But if interest rates remain high, the pressure on the entire industry could increase.

Overall, the S&P 500 fell 52.30 points to 5,078.65. The Dow fell 404.64 to 38,585.19 and the Nasdaq fell 267.92 to 15,939.59.

Hopes of impending interest rate cuts got a boost after a report showed growth in U.S. construction, health care and other service industries slowed more than economists expected last month.

Perhaps more importantly for the market, the report also found that prices paid by service firms rose more slowly in February than in January. Meanwhile, a separate report said new orders at U.S. factories fell more than expected in January.

Wall Street's hope is that the economy continues to strengthen, but not at such a pace that it maintains upward pressure on inflation. That's because traders want the Federal Reserve to cut interest rates this year. They have suggested that this will only happen if inflation cools significantly towards their 2% target.

After Tuesday's reports, traders began to bet that the Federal Reserve would begin cutting interest rates in June. The Fed's key interest rate is at its highest level since 2001 in hopes of curbing inflation. Any cuts would ease pressure on the economy and financial system.

Fed Chairman Jerome Powell will testify before Congress later this week, which could further influence expectations for when interest rate cuts will begin.

In the bond market, the yield on the 10-year Treasury note fell to 4.13% from 4.22% late Monday.

In overseas stock markets, Hong Kong's Hang Seng index fell 2.6%. China's premier said the country's economic growth target this year is around 5%, in line with expectations. But the government's intention to keep its deficit at 3% of the size of China's overall economy may have disappointed investors who had hoped for more aggressive measures.

Shares in Shanghai rose slightly by 0.3%, while indices in much of the rest of the world fell slightly.

` business reporters Elaine Kurtenbach and Matt Ott contributed.

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