S&P 500 Fails to Recover after Friday Dropoff
The S&P 500 slipped further on Monday, and it appears that the tech rally is over for now as Nvidia and AMD slip.
Quick overview
- The S&P 500 fell 1.24% on Friday and continued to decline by 0.2% on Monday amid inflation fears and negative economic factors.
- Oil prices remain high, with Brent crude at $109 per barrel, contributing to market instability influenced by the ongoing conflict in Iran.
- Tech stocks, particularly Nvidia and AMD, have experienced significant declines as traders remain cautious, despite some potential for recovery.
- President Trump emphasized the need for Iran to reach an agreement to avoid further escalation, which could impact international trade and commodity prices.
On Friday, the S&P 500 fell 1.24%, and instead of getting back up on Monday, the index declined further by 0.2% as the market trended downward.
Inflation fears and other economic factors led to a bearish Friday for the stock market, and Monday started off no better with all three major indices slipping further. The Nasdaq slipped 0.1% and the Dow fell 0.4% as traders consider several negative economic factors affecting the market this week.
Oil prices are still elevated, with Brent crude around $109 per barrel and West Texas Intermediate trading at $105 a barrel. Treasury bond yields also rose recently, marking close to a 12-month high. Investors should expect the market to remain subdued throughout the day but potentially start recovering by Tuesday.
No Peace in Iran Yet
The stock market continued to feel pressure from the conflict in Iran and its effect on inflation and international trade. Climbing oil and gas prices are directly caused by the Iran conflict, and the situation there did not look any better as the week began.
U.S. President Donald Trump spoke Sunday to say that Iran needs to come to an agreement or “there won’t be anything left of them.” The ceasefire that has been active since April 8th has been repeatedly violated according to both sides, creating global tensions and fears that the way will continue for a long time and spread to other areas.
If it does, that would affect international trade even further, increasing the price of commodities and making it difficult for the stock market to maintain stability. Trump and Israeli Prime Minister Benjamin Netanyahu talked recently about starting back attacks on Iran.
Tech Stocks Fell Hard
The stocks that were hit hardest by ongoing conflict, rising oil rates, and climbing inflation were in the technology sector. These same stocks performed well in recent weeks and enjoyed a strong rally, but they have pulled back since Friday as traders behaved cautiously heading into the weekend.
Nvidia (NVDA) lost much of last week’s gains and is now trading just under $230 per share. The company may see another surge soon, though, since Trump approved the sale of their high end H200 chips to Alibaba and other key Chinese companies.
Advanced Micro Devices (AMD) ticked up 1.21% on Monday but remains very low compared to last week’s high of $468 per share. The stock is now trading at $429 per share and has been pulled into the tech sector downtrend.
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