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US markets fall for a second day driven by a softer Nasdaq & Tech weakness

The Nasdaq Composite fell for a second session Wednesday to start the year, building on its worst daily performance in nearly three months.The tech-heavy index lost 1.18% to close at 14,592.21, marking its fourth consecutive losing session. The S&P 500 slipped 0.80% to end at 4,704.81. The Dow Jones Industrial Average slid 284.85 points, or 0.76%, finishing at 37,430.19.The Nasdaq is coming off its worst day since October, dragged down by major technology stocks and a nearly 4% decline in Apple after Barclays downgraded the iPhone maker. Apple shares dipped another 0.8% on Wednesday.Other tech stalwarts Nvidia, Tesla and Meta all declined Wednesday. This pullback also came as the U.S. 10-year Treasury yield briefly rose above the key 4% mark. It was last trading around 3.91%.Investors appeared to be selling last years tech winners, which soared as the market anticipated easing monetary policy in 2024. But with uncertainty around when the Federal Reserve will finally begin cutting rates, investors seem to have curbed their enthusiasm.Short-term corrections are nothing out of the ordinary in a market thats coming off of fresh highs and entering primary season, he added, noting that the longer-term setup looks positive on a six- to twelve-month horizon.The major averages were also under pressure Wednesday afternoon following the release of the Feds latest meeting minutes, as they showed the central bank was still not quite ready to lower rates.However, officials indicated that they expect three quarter-percentage point cuts sometime this year, although a high degree of uncertainty remains around when these cuts are likely to occur.The markets coming off a breathtaking year that saw all the major averages bounce back from a devastating 2022. The S&P 500 surged more than 24% and capped off its longest weekly winning streak since 2004, while the Nasdaq jumped 43% for its best year since 2020.Increased attacks on Red Sea ships by Iran-backed militants caused over $200 billion in trade diversions, leading to higher freight rates, surcharges, and longer shipping times. This disrupts global trade, potentially reviving inflation. Nations issued warnings, blaming militants for threatening lives and the economy. Around 20% of vessel capacity remains unused due to reduced manufacturing orders, while carriers cut sailings, tightening capacity and driving up rates, now exceeding $4,000 per container from Asia to Europe and $5,175 to the Mediterranean. Some carriers even announced rates surpassing $6,000 per container, plus surcharges up to $2,700.In commodity-related news, oil prices surged over 3% following the U.S. warning to Houthi militants about Red Sea attacks, coupled with OPECs commitment to maintaining market stability. Additionally, Libyas Sharara oilfield closure due to protests contributed to the price hike. West Texas Intermediate for February jumped by $2.32, reaching $72.70 per barrel, while Brent for March climbed by $2.36, settling at $78.25 per barrel.Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.