VT Markets APP

    Trade CFDs on FX, Gold and more

    Get

    Dow Jones outperforms as tech stocks slump alongside broad market selloff 

    June 26, 2024

    Key Points: 

    • The Dow Jones Industrial Average added 0.7%, driven by gains in consumer sectors.  
    • In contrast, the S&P 500 declined by 0.3%, and the Nasdaq composite slumped over 1%, dragged down by chipmakers. 
    • Nvidia (NVDA) was a major drag on the Nasdaq composite. 

    The Dow Jones Industrial Average (Symbol: DJ30) showcased a robust performance, defying the broader market trend where technology stocks led a significant selloff. This divergence highlights a notable rotation from tech-heavy sectors to more stable consumer businesses, including energy and banking. 

    dow-jones-djia

    The image above shows the performance of the Dow Jones Industrial Average, as observed on the VT Markets app

    The Dow Jones Industrial Average added 0.7%, driven by gains in consumer sectors. In contrast, the S&P 500 (Symbol: SP500) declined by 0.3%, and the Nasdaq composite (Symbol: NAS100) slumped over 1%, dragged down by chipmakers. 

    Chip makers leading the selloff 

    Nvidia (Symbol: NVDA), a leading player in the AI chip market, was a major drag on the Nasdaq. Other chip makers also made significant losses. This broad-based selloff in tech stocks indicates a cautious approach from investors towards the high-growth, high-risk tech sector. 

    Market interest is rotating from high-growth tech stocks to more stable sectors like energy and banking. This shift is evidenced by the gains in banking stocks such as JPMorgan (Symbol: JPM), which gained 1.3% and energy giant Chevron (Symbol: CVX), which saw a substantial increase of 2.6%. 

    Market participants are awaiting the release of the personal consumption expenditures (PCE) index. This data is crucial for assessing inflation levels. A lower PCE reading would suggest that inflationary pressures are easing, which could support the plans of the Federal Reserve for interest rate cuts. Conversely, a higher PCE print could reignite fears of persistent inflation and delay any rate reductions. 

    Opportunities and risks 

    The outperformance of the Dow Jones Industrial Average in the face of a tech-led selloff highlights a shift in market sentiment. As markets brace for critical economic data, the interplay between inflation expectations and Federal Reserve policies will be pivotal in shaping market trends. Traders should stay informed and be prepared for potential volatility and trading opportunities. 

    Create your live VT Markets account and start trading now.