The stock market had a mixed performance today. The S&P 500 fell by 0.3% and the Nasdaq Composite dropped by 1.1%, both closing at their session lows. This decline was driven by a significant loss in NVIDIA (NVDA, Financial) which fell to 118.11, down 6.7%, and other mega cap stocks due to profit-taking activity.
Amazon.com (AMZN, Financial) decreased by 1.9% to 185.57, Microsoft (MSFT, Financial) slipped 0.5% to 447.67, and Broadcom (AVGO, Financial) declined by 3.7% to 1592.21. Other semiconductor stocks also faced declines; Super Micro Computer (SMCI, Financial) dropped by 8.7% to 826.98, and Qualcomm (QCOM, Financial) fell by 5.5% to 200.84. The PHLX Semiconductor Index (SOX) was down by 3.0%.
Despite these declines, buying activity was robust in other market areas. The Dow Jones Industrial Average gained 0.7%, the Russell 2000 rose by 0.4%, and the equal-weighted S&P 500 increased by 0.5%.
Energy-related stocks and bank stocks were among the top performers. The S&P 500 energy sector rose by 2.7%, and the financial sector increased by 1.0%.
Energy shares outperformed due to rising commodity prices. WTI crude oil futures settled 1.2% higher at $81.63 per barrel, and natural gas futures increased by 3.7% to $2.81 per million British thermal units. Bank stocks also outperformed ahead of the Federal Reserve's stress test results, with the SPDR S&P Bank ETF (KBE, Financial) rising by 1.9%.
No significant economic data was released today. However, Tuesday's calendar includes the June Consumer Confidence report, expected at 10:00 a.m. ET, and a $69 billion 2-year Treasury note offering with results at 1:00 p.m. ET.
The 10-year note yield settled one basis point lower at 4.25%, while the 2-year note yield remained unchanged at 4.73%.
Today's News
Nvidia (NVDA, Financial) shares experienced a significant decline of over 6.5% on Monday, marking the third consecutive session of losses for the semiconductor giant. These losses have resulted in a market cap reduction of approximately $500 billion, placing Nvidia behind Apple (AAPL) and Microsoft (MSFT, Financial) in terms of valuation. Despite these recent setbacks, Nvidia's shares have surged 145% year-to-date, driven by increased data center revenue and heavy spending on artificial intelligence.
Amazon (AMZN, Financial) is working on an AI chatbot, internally known as "Metis," to compete with OpenAI's ChatGPT. CEO Andy Jassy is personally involved in the project, which aims to create a more powerful version of Amazon's Titan foundation model. This chatbot will provide text and image answers, share links to sources, suggest follow-ups, and offer up-to-date information using retrieval-augmented generation. The project also envisions Metis as an AI agent capable of creating travel itineraries and other comprehensive plans.
The tech sector has seen nearly 100,000 job losses year-to-date, according to Layoffs.fyi. Over 340 tech companies have laid off a total of 99,672 employees since January 1. ByteDance (BDNCE), the owner of TikTok, has reduced its global workforce by nearly 2,000 in the past quarter, including 450 employees in Indonesia. This trend is part of a larger wave of layoffs in the tech industry, which saw more than 260,000 positions terminated throughout 2023.
Jefferies has raised its price target on Nvidia (NVDA, Financial) to $150 from $135, maintaining a Buy rating on the stock. The firm noted mixed performance in the AI sector, with Broadcom (AVGO, Financial) joining Nvidia's outperformance. However, concerns are growing for Advanced Micro Devices (AMD) and Marvell Technology (MRVL, Financial), as more investors are shorting these stocks. Jefferies believes Nvidia remains a key player in the AI space, with potential growth for Marvell and Astera Labs (ALAB) alongside Nvidia.
Iron Mountain (IRM, Financial) continued its winning streak, closing 0.26% higher at $89.09 on Monday. The company has benefited from the AI boom, led by Nvidia's (NVDA, Financial) rally. Goldman Sachs Research highlighted that companies involved in building AI-related infrastructure, including semiconductor designers, cloud providers, and data center REITs, stand to benefit from the ongoing AI trade.
Shares of Baidu (BIDU, Financial) snapped a six-session losing streak, closing 0.2% higher at $88.7 on Monday. Despite this minor recovery, Baidu has lost over 25% year-to-date. The company's stock has faced challenges, including a 6% decline in the past month. Analysts have given Baidu a Hold rating, with a score of 3.05 out of 5, reflecting mixed prospects for the Chinese internet search giant.
Enbridge (ENB, Financial) also ended its six-day losing streak, closing 1.15% higher at $35.10 on Monday. The pipeline operator has struggled recently, losing 4.9% in value over the past 12 months. Despite these challenges, Enbridge has received a Hold rating from analysts, with a score of 3.38 out of 5, indicating cautious optimism for the company's future performance.
FuelCell Energy (FCEL, Financial) saw its first positive session since June 12, rising 1.62% to $0.68 on Monday. The fuel cell maker has faced significant challenges, losing over 50% of its value year-to-date and about 70% over the past 12 months. Analysts have given FuelCell Energy a Strong Sell rating, with a score of 1.39 out of 5, highlighting concerns about the company's profitability and growth prospects.
Chesapeake Energy (CHK, Financial) ended an eight-day slump, closing 2.86% higher at $84.78 on Monday. The U.S. oil and gas producer has gained 3.73% over the past 12 months. Analysts have given Chesapeake a Hold rating, with a score of 2.90 out of 5, reflecting mixed views on the company's profitability and growth prospects.
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