On November 13, the three major US stock indexes quickly gave back their opening gains, with technology shares coming under pressure once again.
Although the US October producer price index (PPI) came in below market expectations, briefly lifting investor sentiment, the continued decline in NVIDIA (NVDA) shares redirected market attention back to the risks surrounding the AI sector.
As of 22:55 Beijing time, the S&P 500 had fallen 0.3% to 7,568.31 points, the Nasdaq Composite had dropped 0.7% to 25,187.14 points, and the Dow Jones Industrial Average edged slightly higher to 52,316.45 points.
Data released by the US Bureau of Labor Statistics that day showed October PPI rose 0.3% month-on-month, below the market expectation of 0.4% and a marked slowdown from 1.4% in September; on a year-on-year basis it rose 6.5%, below the expected 6.6%, though still the largest annual gain since November 2022.
Core PPI, which strips out food and energy prices, rose 0.3% month-on-month, in line with expectations and down from 0.8% in September; it rose 5.0% year-on-year, unchanged from the previous month.
Despite some easing in producer-side inflation, the previously released US October CPI reading, which came in above expectations, strong nonfarm payrolls data, and hawkish comments from Federal Reserve officials have significantly reinforced market expectations for a December rate hike.
Chris Zaccarelli, chief investment officer at Northlight Asset Management, said the latest PPI data showed some signs of improvement, but overall inflation remains too high and is unlikely to change the Fed's policy stance in December.
Among technology stocks, NVIDIA (NVDA) shares fell about 2.3% during the session, extending the more than 4% drop from the previous trading day.
After Jensen Huang was removed from the chief executive role over a personal scandal, investors have remained concerned about the company's future management strategy and its AI investment model.
It is understood that NVIDIA (NVDA) has commissioned an outside firm to find a permanent successor, with former chief financial officer Colette Kress currently serving as interim chief executive.
NVIDIA (NVDA) has seen its market value shrink by nearly $1 trillion so far this month, and the company is set to report its latest quarterly earnings next week.
Other technology stocks showed mixed performance.
AI chip maker Cerebras Systems rose more than 11% after its quarterly revenue and guidance beat expectations and it announced a new agreement with Microsoft (MSFT).
Applied Materials and Cisco both fell 4.1% and 5.5% respectively, even though they issued optimistic business outlooks.
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