S&P 500 Gives Back Yesterday’s Gains, Nvidia Stock Crashes 6%
Yesterday S&P 500 made another record high after surging 1%, but it has given it all back today, while the Nvidia stock lost around 6% in a risk off day, which is negative for stock markets. China and chipmakers are currently weighing heavily on risk markets. The primary driver of the recent selloff has been the premature release of ASML’s profit guidance, which led to a significant drop in its share price—down around 20%.
This has been a major factor in the Nasdaq’s slump, as the decline spread to other semiconductor stocks like Nvidia and AMD, both of which fell by 5%. Additionally, Chinese stocks are underperforming, with Baidu (BIDU) down 5% and JD.com down 9%. The S&P 500, which saw record highs yesterday, has reversed as selling pressure began early in the US session and escalated by the close. There is some positive news amidst the broader market decline.
Nvidia Chart Daily – Big Bearish Candlestick
Closing Prices for Main US Indices
- Dow Jones Industrial Average fell 324.80 points (-0.75%) to 42,740.42 after reaching a new intraday record before declining.
- S&P 500 declined 0.76%, ending at 5,815.26.
- Nasdaq Composite dropped 1.01% to 18,315.59.
- ASML plummeted 16%, with the CEO citing “cautiousness” among customers and a slower-than-expected recovery.
- Nvidia and AMD also faced declines, down 4.7% and 5.2%, respectively.
- The VanEck Semiconductor ETF (SMH) slid 5.4%, marking its worst performance since September 3.
Cruise lines are holding up well, a good sign for consumers, and the banking sector has shown resilience following strong earnings reports from major players like Bank of America, Goldman Sachs, and Citigroup. Earlier, Fed’s Mary Daly gave a speech where she appeared in no rush to suggest immediate rate cuts, which was somewhat unexpected. The market has already priced in about 45 basis points of cuts for the year, and Daly’s remarks about the Fed’s cautious stance have added a layer of uncertainty.
Comments from the San Francisco Fed President at an event in New York
- Fed’s mandates on jobs and inflation are more balanced now.
- Anticipates one or two rate cuts this year if economic forecasts are met.
- Emphasized that monetary policy remains restrictive and is effectively lowering inflation.
- Stressed that the Fed must remain vigilant to ensure it meets the 2% inflation target and maintains full employment.
- While recognizing progress, Daly noted that achieving a “soft landing” for the economy is still a work in progress.