Wall Street Today: S&P 500 and Nasdaq Composite Fall on U.S.-China Woes and Nvidia Weakness
The Nasdaq Composite and S&P 500 fell Tuesday amid ongoing U.S.-Chinese trade tensions and weakness for Nvidia and other "Magnificent Seven" stocks, although the Dow-30 bucked the trend and rose on strength for key components Walmart and Caterpillar.
The $Dow Jones Industrial Average (.DJI.US)$ gained 202.88 points (0.4%) to a 46,270.46 finish, while the $Nasdaq Composite Index (.IXIC.US)$ eased 172.91 ticks (0.8%) to 22,521.70 and the $S&P 500 Index (.SPX.US)$ shed 10.41 points (0.2%) to 6,644.31.
Macro
The Dow rose in part on gains for index members $Walmart (WMT.US)$ and $Caterpillar (CAT.US)$, which both hit record intraday highs during the session.
Walmart added 5% on word of a tie-up with privately held artificial-intelligence giant OpenAI to allow consumers to shop on Walmart.com directly from OpenAI's popular ChatGPT app.
Meanwhile, Caterpillar gained 4.5% Tuesday and 7.4% over two sessions, apparently on continued enthusiasm for a weekend deal to buy Australian mining-software firm RPMGlobal.
CAT and WMT's gains helped the DJIA overcome weakness in key component $NVIDIA (NVDA.US)$, which lost 4.4% on word that rival chipmaker $Advanced Micro Devices (AMD.US)$ cut a deal to provide $Oracle (ORCL.US)$ with 50,000 GPUs for cloud computing.
Still, the S&P 500 and Nasdaq Composite eased amid the renewed U.S.-Chinese trade fight, which flared up again last week when the two sides ordered big new port fees on each other's cargo ships.
China then imposed export controls on key rare-earth metals and magnets, prompting U.S. President Donald Trump to threaten to order extra 100% tariffs on Chinese goods. That sent U.S. stocks plunging last Friday, although markets partly recovered on Monday after Trump softened his tone over the weekend.
Nonetheless, China ordered new sanctions Tuesday against five U.S. subsidiaries of South Korean shipbuilder Hanwha Ocean. On the American side, U.S. Trade Rep. Jamieson Greer said in a TV interview that timing on the new 100% anti-Beijing tariffs "depends on what the Chinese do."
In other macro news, Federal Reserve Chair Jerome Powell hinted in a speech Tuesday that the central bank could cut rates further at its Oct 28-29 policy meeting.
Powell said that "the downside risks to employment appear to have risen" – a possible signal that the Fed will cut its benchmark Fed Funds rate further to bolster the U.S. economy.
Wall Street generally likes Fed rate cuts because those tend to lower bond and money-market yields, often prompting investors to put more money into equities and push stock prices higher.
Meanwhile, Q3 earnings season began in earnest Tuesday with $JPMorgan (JPM.US)$, $Citigroup (C.US)$, $Goldman Sachs (GS.US)$, $Wells Fargo & Co (WFC.US)$ and other financial firms reporting results before the bell. The banks mostly beat analyst estimates, although some firms' stocks fell anyway.
Lastly, gold and silver hit new intraday records on a continued "flight-to-safety" trade amid the global economic turmoil.
$Gold Futures (DEC5) (GCmain.US)$ gained as much as 1.4% to a $4,190.90-an-ounce all-time high, while $Silver Futures (DEC5) (SImain.US)$ added 4.1% at its peak to $52.495.
Moo-vers
The "Magnificent Seven" stocks – which generally have large international exposure that could suffer from a U.S.-Chinese trade war – followed the broader market's lead Tuesday and mostly fell.
$NVIDIA (NVDA.US)$ led the way downward with its 4.4% decline, followed by $Amazon (AMZN.US)$ (1.7% weaker), $Tesla (TSLA.US)$(off 1.5%), $Meta Platforms (META.US)$ (which shed 1%) and $Microsoft (MSFT.US)$ (0.1% lower).
Only $Alphabet-A (GOOGL.US)$ (up 0.5%) and $Apple (AAPL.US)$(0.04% stronger) gained ground among the Mag-7 stocks.
Elsewhere on Wall Street, Tuesday's other noteworthy percentage gainers included:
-- Several North American rare-earth-metals firms, which rose amid concerns that China will limit exports of the key industrial materials. Winners included $Nova Minerals (NVA.US)$ (up 110.3%), $Trilogy Metals (TMQ.US)$ (61.6% stronger), $Critical Metals (CRML.US)$ (which added 28.7%), $Lithium Americas (LAC.US)$ (which added 19.2%) and $Energy Fuels (UUUU.US)$ (better by 10.4%).
-- $Navitas Semiconductor (NVTS.US)$ , which gained 26.1%. The tech firm rallied after announcing progress in the development of 800 VDC power devices that it's developing for Nvidia.
-- $SEALSQ Corp (LAES.US)$, which added 24.8%. LAES, which is develop post-quantum semiconductor technology, rose on a deal with Switzerland's Wecan Group to jointly develop a Post-Quantum Know Your Customer solution.
Conversely, Tuesday's significant percentage decliners included:
-- $Bitmine Immersion Technologies (BMNR.US)$, down 6.9%. The Ethereum-focused crypto firm fell as $Ethereum (ETH.CC)$ dropped. ETH shed 4% to $4,099.36 as of shortly after 4 p.m. ET.
-- $IonQ Inc (IONQ.US)$, off 5.5%. The quantum-computing stock retrenched after rising as much as 19.8% Monday to an all-time intraday high.
-- $Intel (INTC.US)$, 4.3% weaker. The chipmaker fell after Bank of America cut its stock to "Underperform" from a previous "Neutral." BofA said long-struggling INTC has rebounded "too far, too fast" following investor optimism for its recent announced or rumored deals with NVDA and other Big Tech players.
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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75614556 : Can you read this article for me?
webguybob : Depends on China's next move. Trump holds the power cards though and Chi doesn't believe that.
Sure taker : let’s hear what Chinese has to say to conclud everything.
BwMama 106024416 : no
天升 : Taco Trump
PhotoSynth webguybob : Actually, its China that holds the cards…… Its ALL about rare earths which China controls 90% of and we cannot live without , especially Antimony. And China is sick of listening to Trump dictate terms to them. China could shut us down via Antimony in ten minutes. There are NO Currently producing mines for Antimony in the U.S.
We are 2-3 years from producing. any Antimony domestically. Even then, we can only cover 30-35% of our critcal domestic demand,…. which is provided by….. China. Dont get distracted from the true bottom lines of this insane trade war that Trump started and cant bullshit his way out of it.
Everything else is just an orange distraction.