Tech rout in markets continues

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

Nasdaq is still trailing other major indexes
U S&P 500 and Dow Jones Industrial Average got up on Tuesday, but the Nasdaq Composite he withdrew, doing so the second day is underperformed. Europe Stoxx 600 Index down 0.08%, give up early earnings. BP fell 2.5% after the oil giant he said its fourth-quarter profit will take a $300 million hit due to weaker refinery margins.

Meta cuts jobs as Microsoft freezes hiring
Meta evening cutting about 5% of its lowest paid employeesCNBC confirmed Tuesday. CEO Mark Zuckerberg informed employees about the decision in a memo published Tuesday on the company’s internal forum. Separately, Microsoft plans to is pausing hiring as part of its consulting business in the United States, according to an internal memo.

The SEC is suing Musk over Twitter’s actions
SEC filed a lawsuit against Elon Musk Tuesday, accusing the billionaire of committing securities fraud in 2022 by failing to disclose his ownership on Twitter and buying shares at “artificially low prices.” Before Musk’s acquisition of Twitter in 2022, he built a position in the company of more than 5%, which would require him to disclose his participation to the public within 10 calendar days of reaching that limit.

Slower rise in producer prices
US producer prices in December increased 0.2% for the monthaccording to Bureau of Labor Statistics Report Tuesday. That’s lower than November’s 0.4% increase, as well as the Dow Jones consensus estimate of 0.4%. On an annual basis, the main producer price index rose by 3.3% for 2024, from the increase of 1.1% in 2023.

Winners and losers of the strength of the US dollar
The US dollar index – which measures the greenback against a basket of rivals – hit its highest level in more than two years on Monday after a warmer-than-expected jobs report out of the US last week. Here they are Europe’s biggest winners and losers from the rise of the dollar, according to analysts.

[PRO] Is Nasdaq Selling a Minor Adjustment?
On Tuesday, the Nasdaq Composite fell for the fifth consecutive day. However, some wealth managers say this could be a minor adjustment for the market rather than the start of a downturn. They explain why they are not too concerned about sales.

The Nasdaq Composite lost 0.23%, underperforming the S&P 500 and the Dow Jones Industrial Average – which gained 0.11% and 0.52% respectively – for the second day in a row. All Magnificent Seven stocks fell, with Meta, Tesla and Nvidia recording the biggest losses, in that order.

Adding to the sector’s misery, the fall in technology stocks was accompanied by news of layoffs and hiring freezes.

In an attempt to cut expenses, Microsoft will pause hiring in part of its consulting unit, reduce travel expenses and cut marketing expenses, according to an internal memo.

Meanwhile, Meta announced in an internal note on Tuesday that it will “exit about 5% of our lowest performers.” (When one “gets out” of fact-checking or “enters” free speech, I guess.) Zuckerberg also warned employees that 2025 will be “an intense year.”

Zuckerberg’s warning was directed at Meta, of course, but it could also apply to tech companies facing a heavy investment in artificial intelligence, without necessarily having the revenue to justify such a high capital outlay.

As we enter the fourth quarter earnings season, however, there are signs of optimism in the business environment for this year.

“We think earnings will be stronger,” said Jay Hatfield, founder of Infrastructure Capital Advisors.

“The economy is strong in the fourth quarter. Usually, companies will learn if they have a problem by then, and they will probably be quite optimistic about the future because the Trump administration is pro-business. So we think the most CEOs are quite optimistic about the forecast for 2025”.

Perhaps the optimistic CEO leads other sectors, such as the movements of investors, who have moved from technology to utilities, financial and material Tuesday, they suggest.

Whether this sectoral rotation persists will depend on the consumer price index, which will drop later today.

— CNBC’s Lisa Kailai Han, Hakyung Kim and Brian Evans contributed to this report.