Wall Street Today: S&P 500, Nasdaq Composite and DJIA Fall as Rally on Nvidia Earnings Fades
The Nasdaq Composite, S&P 500 and Dow-30 all fell Thursday as a morning rally on better-than-expected earnings results from Nvidia faded – renewing worries about Big Tech stocks and the so-called "AI trade."
The tech-laden $Nasdaq Composite Index (.IXIC.US)$ led the way downward by shedding 486.18 points (2.2%) to a 22,078.05 close. The $S&P 500 Index (.SPX.US)$ likewise gave up 103.4 ticks (1.6%) to 6,538.76, while the $Dow Jones Industrial Average (.DJI.US)$ lost 386.51 points (0.8%) to 45,752.26.
The downturns marked a sharp reversal from earlier in Thursday's session, when the Nasdaq Comp had been up as much as 2.6%, the S&P 500 gained 1.9% and the DJIA rose 1.6%.
All three indexes initially rallied as $NVIDIA (NVDA.US)$ rose as much as 5.1% after reporting fiscal Q3 earnings and revenue beats and what looked like well-regarded fiscal Q4 guidance late Wednesday.
NVDA is the leading supplier of artificial-intelligence chips and the largest publicly traded U.S. company by market capitalization, and its seemingly good results initially reassured Wall Street that Big Tech and AI stocks remained in an uptrend.
However, NVDA's share price later turned negative and the chip giant closed 3.2% lower, taking the market's key indexes and multiple tech stocks down with it.
Significant tech decliners included $SanDisk Corp (SNDK.US)$ (down 20.3%), $NEBIUS (NBIS.US)$ (11% lower), $Micron Technology (MU.US)$ (off 10.9%), $Advanced Micro Devices (AMD.US)$ (which lost 7.8%), $Palo Alto Networks (PANW.US)$ (7.4% weaker after reporting earnings Wednesday night), $Oracle (ORCL.US)$ (6.6% softer) and $Palantir (PLTR.US)$ (which shed 5.9%).
Macro
Adding to the market's concerns, the U.S. Bureau of Labor Statistics released the first official employment figures since the government shutdown ended – reporting that America created 119,000 non-farm jobs in September. That beat the 50,000 new jobs that economists had forecast.
The stronger-than-expected showing raised worries that the Federal Reserve – which tries to balance U.S. inflation and unemployment – won't cut its benchmark rate at next month's policy meeting to shore up the job market.
The CME FedWatch tool put the odds of a 25-point December cut at just 39.8% as of Thursday afternoon, down from 98.8% a month earlier.
Wall Street tends to prefer Fed rate cuts because those typically drive bond and money-market yields lower, prompting some investors to move money into stocks in search of better returns -- historically sending equity prices higher.
Meanwhile, investors' dour mood Thursday extended to cryptocurrencies, with $Bitcoin (BTC.CC)$ shedding 3.3% to $86,258.35 as of shortly before 3:30 p.m. ET – its lowest level since April.
$Ethereum (ETH.CC)$ likewise gave up 3.4% to $2,819.04 as of that hour, while $Ripple (XRP.CC)$lost 2.4% to $1.99. Only $Solana (SOL.CC)$gained ground among major cryptos, inching up 0.1% to $132.65.
Moo-vers
Thursday's sell-off sent all of the "Magnificent Seven" stocks lower, with $NVIDIA (NVDA.US)$ leading the sector's losses with its aforementioned 3% pullback.
Other Mag-7 decliners included $Amazon (AMZN.US)$ (off 2.5%), $Tesla (TSLA.US)$ (2.2% weaker), $Microsoft (MSFT.US)$ (down 1.6%), $Alphabet-A (GOOGL.US)$ (1.2% softer), $Apple (AAPL.US)$ (which gave back 0.9%) and $Meta Platforms (META.US)$ (0.2% lower).
Elsewhere in the marketplace, Thursday's other noteworthy decliners included:
-- Select quantum-computing stocks, which fell in part on tech's broad sell-off. Decliners included $IonQ Inc (IONQ.US)$ (off 14.4%), $D-Wave Quantum (QBTS.US)$ (12.5% softer), $Quantum Computing (QUBT.US)$ (which gave up 11.2%) and $Rigetti Computing (RGTI.US)$ (10.5% weaker).
-- Certain crypto-related stocks, which lost ground amid the declines for Bitcoin and other cryptocurrencies. Losers included $Bitmine Immersion Technologies (BMNR.US)$ (down 10.8%), $Applied Digital (APLD.US)$ (off 7.5%), $Coinbase (COIN.US)$ (7.4% weaker), $Strategy (MSTR.US)$ (which gave up 5%) and $Circle (CRCL.US)$ (4% softer).
Conversely, Thursday's significant percentage gainers included:
-- $Walmart (WMT.US)$, up 6.5%. The retail giant, which is a major S&P 500 and Dow-30 component, rose on stronger-than-expected Q3 results and a higher full-year revenue forecast.
--Select off-price retailers, which rose in apparent sympathy with Walmart. Gainers included $TJX Companies (TJX.US)$ (up 1.6%) and $Costco (COST.US)$ (up 0.3%).
Disclaimer: This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Indexes are unmanaged and cannot be directly invested in. Past performance is no indication of future results. Investing involves risk and the potential to lose principal. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors' financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information regarding your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Jerry Kronenberg
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Former top editor at Seeking Alpha, Fidelity.com, TheStreet.com and UPI.
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topcing : thanks for letting us know.. like who cares now
piggycow : finally mystery solved for the dip
Smiiu : The dip and gain is always a mystery to retailers as the big hands control the price action. You never know what's behind that Wall
103106806 : best buy hahahaha and drop 7%
Gunslinger45 : was a short lived relief yesterday through today but I think NBIS has the best buy of these 5
73016578 : some one needs to fly another jet up wall streets ass get rid if these criminal bastards that are manipulating the market. where is bin lodin when you need him