US stocks fell in a broad decline as investors take advantage of 2024 gains

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US stocks fell for the second straight session as investors benefited from strong gains for stock markets in 2024.

The Standard & Poor’s 500 index fell 1.1 percent in Monday morning trading in New York, while the Nasdaq Composite, which is dominated by technology stocks, fell 1.2 percent. Stocks also fell significantly on Friday, as investors sold shares in large technology stocks that had posted big gains throughout most of 2024.

Monday’s selling was broad, with all but 20 stocks tracked by the S&P 500 index falling, according to FactSet data. One of the biggest laggards was Boeing Aerospace Group, whose stock fell 2 percent after a 737-800 plane crashed in South Korea over the weekend. US airline stocks also fell, with United Airlines falling by roughly the same margin.

Shares of major technology companies, including chip maker Broadcom, enterprise software group Oracle, computer hardware maker Dell, and Elon Musk’s electric car maker Tesla, also fell, as investors continued to shy away from some of this year’s biggest winners.

The S&P 500 is still up 24 percent in 2024 despite Monday’s decline, with the Nasdaq up about 30 percent.

Thomas Lee, of research house Fundstrat, said the bout of selling was the result of “profit taking” as investors recalibrated their portfolios at the end of a strong year for companies. Stocks. He noted that the Fed spooked investors this month when it expected to cut interest rates only twice by a quarter point next year — half its estimate in September.

Torsten Slok, chief economist at Apollo, echoed Lee’s sentiments, saying concerns that interest rates will remain higher for longer than previously expected have weighed heavily on technology groups, which have fueled this year’s gains on Wall Street.

The so-called “Magnificent Seven” giants — Apple, Microsoft, Meta, Amazon, Alphabet, Nvidia and Tesla — have generated about half of this year’s gains in the S&P 500, according to S&P Dow Jones Indices. Everything except Nvidia dropped on Monday.

US investors bought government debt on Monday, sending the yield on the 10-year Treasury note down 0.07 percentage point to 4.55 percent. Fixed income returns move inversely with prices.

More than $26 billion flowed out of equity funds last week, including the largest outflow in about two years from developed market equity funds, according to data provider EPFR. Investor withdrawals from cryptocurrency funds have reached a record high, while technology funds have recorded their longest string of outflows since early 2023.

Investors also invested about $2.1 billion in bond funds and placed nearly $29 billion in low-risk money market funds, EPFR data showed.

Trading volumes are typically light during the last two weeks of the year, as many on and off Wall Street stay away from work during the holiday season. The New York Stock Exchange will be open on New Year’s Eve, while the bond markets will have a short trading day, and both will be closed on New Year’s Day.