Wall Street's main indexes closed lower on Monday, driven by a drop in AI leader Nvidia that weighed on tech stocks, as investors looked ahead to a crucial inflation report set for later this week.
Market Snapshot
The Dow Jones Industrial Average fell 240.59 points, or 0.54%, to 44,401.93, the S&P 500 lost 37.42 points, or 0.61%, to 6,052.85 and the Nasdaq Composite lost 123.08 points, or 0.62%, to 19,736.69.
Market Movers
China will adopt an "appropriately loose" monetary policy next year as part of steps to support economic growth, state media reported on Monday citing a Politburo meeting, marking the first such shift towards loosening since 2010.
China ETFs and ADRs rally. Fangdd Network Group rose 52%; YINN rose 24%; CHAU rose 13%; XPeng rose 13%; PDD rose 10%; Alibaba rose 7%.
Super Micro Computer said it has been granted an extension from Nasdaq that gives the server marker until Feb. 25, 2025, to file its latest annual report. In a statement, Super Micro said it currently expects to file all the required reports by the deadline. The company also said its stock would remain listed on the Nasdaq during the exception period as long it remains in compliance with listing rules. Super Micro shares rose 0.5%.
Tesla stock gained 0.15% to $389.79 after rising 5.3% on Friday to $389.22, the electric-vehicle maker's highest closing level since Jan. 3, 2022, and finishing with a market capitalization of $1.249 trillion, a record high, according to Dow Jones Market Data.
Nvidia declined 2.55% as China began an investigation of the chip maker on suspected violation of the country's anti-monopoly laws. China's State Administration for Market Regulation said it had an initiated an investigation into Nvidia due to a suspected violation of anti-monopoly law, according to a statement translated by Barron's using online tools.
Advanced Micro Devices was down 5.6% to $130.87. It was downgraded to Neutral from Buy at BofA and the price target was reduced to $155 from $180. The analysts said AMD faces competitive pressures from other dominate AI chip companies, specifically Nvidia, along with an expected decline in demand for PC processors in the first half of 2025.
C3.ai raised its forecast for fiscal year 2025 revenue on Monday, helped by healthy demand for the company's enterprise artificial intelligence software as companies look for tools to help streamline their workflow. Shares of the company rose 18% at one time but last up 5.5% in extended trading.
Oracle missed Wall Street expectations for second-quarter revenue and adjusted profit on Monday, hit by stiff competition and softer-than expected spending on its database and cloud services as enterprise clients slash budgets amid an uncertain economy. Shares of the company were down over 7% in extended trading.
Palantir Technologies fell 5.1% after trading higher earlier in the session. The software company expanded its partnership with the U.S. government to expedite software deployment and increase the use of its artificial-intelligence technology. A one-year contract, worth $37 million, establishes Palantir as the lead software integrator for the U.S. Special Operations Command's Mission Command System. Shares have risen 334% this year.
Comcast declined 9.5% after David Watson, president and CEO of Comcast Cable, said at a conference the company "could be looking at a broadband subscriber loss" in the fourth quarter of just more than 100,000.
Hershey jumped 11% after Bloomberg reported Mondelez was exploring a takeover of the chocolate maker. Mondelez was down 2.3%.
Apollo Global Management, the alternative asset manager, and Workday, the workplace cloud-services platform, will be added to the S&P 500 prior to the start of trading on Dec. 23, in conjunction with the index's quarterly rebalancing. They will replace Qorvo and Amentum Holdings, both of which will move to the S&P Small Cap 600 index. Apollo Global was down 3% and Workday jumped 5.1%. Qorvo rose 1.7% and Amentum was up 2.5%.
AppLovin fell 15% after the advertising-technology company wasn't added to the S&P 500. Barron's had reported Friday that AppLovin, Apollo, and Coinbase Global were leading candidates that might be added to the index because they have three of the largest market values of any companies not in the S&P 500. Coinbase declined 9.6%.
Interpublic Group rose 3.6% to $30.30 after agreeing to be acquired Omnicom in a stock-for-stock transaction, creating the world's largest advertising agency. Omnicom shares fell 10%.
Market News
Levered China ETF Bullish Bets Net $138 Million Paper Gain
Traders who scooped up millions of shares worth of bullish options over the past week in tiny, levered exchange-traded funds tracking Chinese indexes are up more than $130 million on paper as shares surged after top leaders in Beijing signaled stronger economic support next year.
The options buying was centered on two ETFs — Direxion Daily FTSE China Bull 3x Shares and Direxion Daily CSI 300 China A Shares Bull 2x Shares. Their combined market capitalization of around $2.5 billion lags larger funds like iShares China Large Cap, which has almost $8 billion.
Bitcoin Wavers, Smaller Tokens Sink as Frothy Crypto Rally Frays
A bout of selling buffeted crypto as the optimism sparked by President-elect Donald Trump’s embrace of the sector begins to cool.
Bitcoin retreated below $95,000 at one point on Tuesday, while an index of smaller digital assets slid more than 10%, one of its biggest drops of the year.
Speculators plowed into crypto after the US election on Nov. 5, catalyzed by Trump’s pledge of supportive rules and controversial backing for a national Bitcoin reserve. At the same time, the hair-trigger volatility of digital assets leaves traders prone to exiting bets quickly once momentum turns.
