Technology Stocks Lead Market Decline

CNBC reported on Monday that US stock futures fell as investors continued to sell shares of key technology companies that had previously driven the bull market. Futures related to the major indices showed a cautious sentiment, with S&P 500 index futures down 0.8%, NASDAQ 100 index futures down 1.2%, and Dow Jones Industrial Average futures down 150 points, or about 0.4%.

Over the past two weeks, the overall market has seen a decline due to the pullback in tech stocks, which had previously been the market's strong performers.

Bitcoin Follows Decline, Unable to Hold 91K

Bitcoin, which had been moving in the 94-95K range today, was also affected by the pre-market market impact, plunging to 90-91K.

Palantir and Nvidia Lead Tech Stock Decline

The prominent tech companies Palantir and Nvidia were among the hardest hit, as they are popular with retail investors. Palantir fell more than 3% in pre-market trading, extending last week's 11% decline. Similarly, Nvidia fell nearly 6% last week and dropped over 3% before the market open on Monday.

Other major tech companies such as Tesla, Broadcom, and Micron also experienced losses in pre-market trading, indicating a broader sell-off trend in the tech sector.

Rising Bond Yields Put Pressure on Growth Stocks

The rapid rise in bond yields is one of the main factors weighing on growth sectors like technology. On Monday, the 10-year US Treasury yield rose to its highest level since the end of 2023, further exacerbating investors' concerns.

Katherine Nixon, Chief Investment Officer of Wealth Management at Northern Trust, stated: "Inflation and its expectations remain elevated and sticky, and the rapid and significant rise in bond yields has prompted a more cautious stance from equity investors."

Note: Inflation stickiness refers to the difficulty of quickly reducing or changing the level of inflation or its expectations, even with relevant policy interventions or changes in external conditions.

US Jobs Report Triggers Market Volatility

The unexpectedly strong jobs report last Friday further pushed up bond yields and increased uncertainty about the Federal Reserve's future rate-cutting path. As a result, the Dow Jones Industrial Average fell 697 points last Friday, while the S&P 500 and NASDAQ Composite also recorded significant declines. The three major indices fell 1.9%, 1.9%, and 2.3%, respectively, last week.

So far this year, the performance of the three major indices has been negative.

Focus on Q4 Earnings and Economic Data

Investors hope that the upcoming fourth-quarter earnings season can bring some stability to the market. Major banks, including Citigroup, Goldman Sachs, and JPMorgan Chase, will report their results on Wednesday, while Morgan Stanley and Bank of America will release their earnings on Thursday.

In addition to earnings, economic data this week is also crucial. The December Consumer Price Index (CPI) will be released on Wednesday morning, while the December Producer Price Index (PPI) will be closely watched on Tuesday.

Market Outlook Remains Uncertain

Faced with soaring bond yields and mixed economic signals, market sentiment remains tense. Investors are preparing for a volatile week and hope to find clues about the market's direction from earnings reports and inflation data. However, whether these events will stabilize the market or deepen the current selling pressure remains to be seen.