Dow closes down more than 550 points, dragged down by Nvidia, tech shares
Stocks pulled back on Monday, plagued once again by declines in tech, as Wall Street awaited key releases this week, including Nvidia earnings and the September jobs report.
The Dow Jones Industrial Average lost 557.24 points, or 1.18%, to close at 46,590.24, as losses in the artificial intelligence chip darling along with Salesforce and Apple pushed the blue-chip index lower. The S&P 500 sank 0.92% to end the day at 6,672.41, while the Nasdaq Composite tumbled 0.84% to settle at 22,708.08.
Nvidia dropped about 3% ahead of the company’s third-quarter results, which are scheduled for after the bell on Wednesday. The chipmaker and other names in the AI trade were a source of recent pressure as investors have grown anxious about stretched valuations. Blue Owl Capital, a private credit lender, dropped 7% amid concerns about its heavy lending related to the AI datacenter buildout.
Following Nvidia, Walmart will report before the market opens Thursday, and those results could offer insights into just how tapped out the consumer is and demonstrate if spending is bifurcated, the strategist said.
Investors will also be eyeing Thursday’s September nonfarm payrolls reading, the first to be divulged in the wake of the economic data blackout from the U.S. government shutdown. The report as well as this week’s release of the Federal Reserve’s October meeting minutes – even if somewhat “stale” – could offer some clarity at a time when the market is “still in a bit of a data vacuum for the next couple of weeks as the government gets back on pace,” Mayfield noted.
The market has been reducing its expectations that the Fed will lower its benchmark overnight borrowing rate by a quarter percentage point at its final meeting of the year next month. Fed funds futures traders are currently calling for a roughly 40% chance of a cut, down substantially from the more than 90% probability priced in a month ago, according to the CME FedWatch tool.
Alphabet was a bright spot in Monday’s session, surging nearly 3% after Warren Buffett’s Berkshire Hathaway revealed it had taken a stake in the Google and YouTube parent. Investors were encouraged that Berkshire still finds value in the AI name after a big run this year, although Buffett himself likely was not directly responsible for the purchase, but rather his two equity managers.
Source : Cnbc.com
