Stock markets hit record highs while tech and auto sectors tumble sharply

European and U.S. stock markets have seen sharp swings in early trading this year. While major indices like Germany's DAX, Austria's ATX, and the U.S. S&P 500 reached fresh record highs, many individual sectors and companies are struggling. Tech, software, and automotive shares have faced steep declines, contrasting with gains in select industrial and energy stocks.

The year began with strong momentum for broad market indices. Germany's DAX, Austria's ATX, and the U.S. S&P 500 all climbed to new all-time peaks. Yet beneath the surface, performance has been uneven.

In software, SAP has suffered the most, dropping around 40% from its 2023 high to mid-2024 lows. A 15% single-day plunge followed weak quarterly results, as investors fretted over AI competition and a tougher business environment. Microsoft and Palantir have also fallen hard, losing 26% and 35% respectively. The wider IGV software index is down 30%, with Oracle and Intuit each shedding over half their value from past peaks.

Tech giants tracked by the NYSE FANG+ index have declined 16% from last year's highs. Meanwhile, auto stocks like Stellantis and Porsche have slumped by three-quarters and two-thirds respectively. Bayer's shares remain two-thirds below their 2015 peak, weighed down by the troubled Monsanto takeover despite some recovery.

Commodities have been volatile too. Gold and silver hit record highs earlier in the year but have since retreated—gold by 9% and silver by 30%. In Austria, circuit board maker AT&S is approaching its 2022 peak, while oilfield services firm SBO has fallen to one-third of its former value.

In other sectors, Adidas has lost over 21% year-to-date, dragging down performance. Puma reported a 10% sales drop and margin declines, leading to job cuts and lowered forecasts. Airbus weakened by over 4% after conservative outlooks disappointed investors. Symrise also dipped 4% following reduced sales guidance.

On a brighter note, three Dow Jones stocks—Caterpillar, Honeywell, and Chevron—have reached new record highs. European stocks overall have outperformed their U.S. counterparts so far this year, though the gains mask deep struggles in specific areas.

The market's mixed picture shows resilience in some sectors alongside sharp declines in others. While indices like the DAX and S&P 500 have hit new highs, software, automotive, and certain commodity stocks continue to face pressure. Investors are now watching whether the downturns in tech and manufacturing will spread or if the gains in industrials and energy can sustain broader momentum.