Investors sell off as S&P500 closes lower on first day of trading for 2024

S&P 500 fell Tuesday, the first trading day of the year, as bond yields inched higher and investors took some money off the table following a surprisingly strong 2023.The broad market index lost 0.57%, and the Nasdaq Composite pulled back by 1.63%.The Dow Jones Industrial Average added about 25 points, or 0.07%. Markets were closed Monday for New Years Day.Apple shares slid more than 3% after Barclays downgraded the member of the Magnificent 7 market leaders basket to an underweight rating. On the other hand, the Dow remained in positive territory as defensive stocks like Johnson & Johnson and Merck strengthened.The stock market finished 2023 with a bang, as the S&P 500 climbed for nine weeks in a row to end the year, notching its best weekly win streak since 2004. Risk assets enjoyed a big relief rally as the economy remained resilient and inflation cooled, while the Federal Reserve signaled an end to rate hikes and forecasted rate cuts later this year. The market also endured a regional banking crisis as well as wars in Ukraine and the Middle East.Technology shares, especially megacap stocks, led the 2023 advance with Apple soaring 48%, Microsoft surging nearly 57% and Nvidia skyrocketing 239%. The tech-heavy Nasdaq Composite ended the year up 43.4% for its best year since 2020.The blue-chip Dow logged a 13.7% gain and notched a new record during 2023. Part of that rally was helped by a turn in interest rates.The 10-year Treasury yield had spooked investors by climbing above 5% at one point in October, before it topped out and closed the year out lower than 3.9%. On Tuesday, the 10-year yield was back up 8 basis points, approaching 4% again. (1 basis point equals 0.01%.)That trend was reversing on Tuesday as the new year of trading began with those same stocks declining in early trading. Apple shares were down 2% after the negative call from Barclays. The firm said Apple could lose about 17% this year because of lackluster iPhone sales. Microsoft and Nvidia shares were also in the red.Tuesdays losses put the Nasdaq on track for its worst day since October.In commodity-related news, Oil prices experienced a decline as traders kept an eye on increasing tensions in the Red Sea. This drop occurred alongside the context of high U.S. oil production levels and reduced demand in China. The West Texas Intermediate contract for February decreased by $1.27 to settle at $70.38 per barrel, while the Brent contract for March dropped $1.15 to trade at $75.89. Initially, crude prices had surged by more than 2% due to escalating tensions in the Red Sea, a critical global trade route. Danish shipping company Maersk announced a temporary halt in shipping through the Red Sea following an attack on one of its vessels by militants over the weekend.Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.