U.S. Stocks Are Down As Market Corrects

In the early days of 2024, stocks are already experiencing a downturn.

The Nasdaq Composite had its fourth-worst first day of a new year ever, and the Russell 2000, a darling of the market rally, just had its third-worst two-day start to a year ever. I Photo: Dave Center Flickr

The Nasdaq Composite had its fourth-worst first day of a new year ever, and the Russell 2000, a darling of the market rally, just had its third-worst two-day start to a year ever. The famed Santa Claus Rally, simply put, didn't arrive. Josh Schafer reported for Yahoo Finance.

"It's fair to say that financial markets have started 2024 with something of a mild hangover," wrote Capital Economics deputy chief markets economist Jonas Goltermann in a recent research note.

Goltermann pointed out that after a roaring rally that saw stocks close 2023 near record highs, some version of a correction isn't abnormal.

Other key factors that could be weighing on stocks include uneasiness around Federal Reserve policy and growing concerns about how unrest on the Red Sea could disrupt supply chains and potentially be an issue for inflation's downward path.

Invesco chief global market strategist Kristina Hooper pointed out that while the market has excitedly priced in a Fed pivot to easing monetary policy, the central bank hasn't actually made that call.

"We're going to naturally have jitters as we wait for the true policy pivot," Hooper told Yahoo Finance Live.

"To me, this is a pretty short-term blip." Fundstrat head of global research Tom Lee, known as one of the most bullish strategists on Wall Street, flagged last Friday that a pullback early in the year wouldn't be a surprise. A key part of his reasoning was also that the Fed pivot hasn't fully occurred yet.

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