The S&P 500 futures are down 187 points, trading 3.5% below fair value. Nasdaq 100 futures are down 925 points, trading 2.2% below fair value. Dow Jones Industrial Average futures are also down 925 points, trading 2.2% below fair value.
The global sell-off that started late last week over fears about US economic growth continues. Treasury yields are falling, with the 10-yr note yield down eight basis points to 3.71% and the 2-yr note yield down 14 basis points to 3.73%.
Mega cap stocks and semiconductor shares show significant pre-open declines, adding to the downward trend.
Japan's Nikkei (-13.5%) dropped to levels last seen in November, while the yen rose to 142 per dollar, its best level against the dollar since early January.
Oil prices are also falling due to growth concerns. WTI crude oil futures are down 2.1% to $72.00 per barrel.
In corporate news:
- Nvidia (NVDA, Financial): Dropped 13.0% to 93.31 as a chip delay may impact Microsoft (MSFT, Financial), Google (GOOG, GOOGL), and Meta (META).
- Apple (AAPL, Financial): Fell 7.8% to 202.81 after Berkshire Hathaway cut its stake by about 50%.
- CrowdStrike (CRWD): Dropped 7.7% to 201.09 as it tells Delta (DAL) it isn't responsible for the airline's losses.
- Coinbase Global (COIN): Fell 15.7% to 172.39 amid falling cryptocurrency prices. Bitcoin is at $51,540.
- Kellanova (K): Rose 21.6% to 79.55 on news that Mars is considering acquiring the company.
Reviewing overnight developments:
Today's News
Nvidia (NVDA, Financial) was in focus on Monday as U.S. technology stocks sank for a variety of reasons, including a report that the chip giant has delayed the release of its new Blackwell line of graphics processing units to its customers. As such, Citi lowered its sales estimates for the 2025 fiscal year. Nvidia shares fell 10% in premarket trading. Given that the demand for chip usage related to artificial intelligence has not slowed down, Citi analyst Atif Malik said customers increasing their demand for H100 and H200 could help Nvidia "partially offset" any decline related to the reported delay, which could be as long as three months. Malik cut his fiscal 2025 revenue estimates by 5% but kept his fiscal 2026 estimates unchanged, as he believes any sales will likely just be pushed out by a quarter. Malik reiterated his Buy rating and $150 price target on Nvidia.
U.S. technology stocks dropped sharply in premarket trading on Monday for a variety of reasons, including a crash in Japan's Nikkei, Berkshire Hathaway (BRK.A, BRK.B) slashing its stake in Apple (AAPL, Financial) and increased fears of recession. However, Wedbush Securities said the tech trade is likely to still continue, aided by artificial intelligence. "In a nutshell.... This is not the time to panic on the tech trade, [it's] the time to go bargain hunting for our top tech names after this panic sell-off," Wedbush Securities analysts led by Dan Ives wrote in an investor note. The firm reiterated its position that "massive sell-offs" like this in the past "have created the best long term opportunities" to own companies such as Microsoft (MSFT, Financial), Apple, Nvidia (NVDA, Financial), Salesforce (CRM, Financial), Oracle (ORCL, Financial), Palo Alto Networks (PANW, Financial), Tesla (TSLA, Financial), Alphabet (GOOG, Financial) and Amazon (AMZN, Financial).
Apple (AAPL, Financial) shares plunged more than 7% after Warren Buffett (Trades, Portfolio)'s Berkshire Hathaway (BRK.A, BRK.B) shocked the market by slashing its stake in the iPhone maker by nearly 50%. The company reported that the fair value of its Apple holdings fell significantly, contributing to a broader sell-off in tech stocks.
Tesla (TSLA, Financial) traded lower on Monday amid a global market selloff. The bloodbath started in Japan, where the Nikkei 225 Index plunged 13.2% for its worst session since the 2011 Fukushima nuclear meltdown. Adding to the concerns were the BOJ's steps toward policy normalization, and it has translated into Japan's world-beating rally this year being wiped out over the last several sessions. Circuit breakers were also activated for South Korea's Kospi after the index rapidly dropped 8%, while Australia's ASX 200 slid nearly 4% for its worst session since June 2022. S&P 500 futures were down 3.19% and Nasdaq 100 futures were off 4.84%. Meanwhile, Tesla CEO Elon Musk stated over the weekend that the Federal Reserve should lower interest rates, calling their decision not to do so already "foolish" due to concerns of a financial slowdown.
Bitcoin (BTC-USD) crashed below the $50K mark amid a global selloff sparked by recession fears in the U.S. pushing stock markets around the world into the red. Crypto related stocks were also down. The world's oldest cryptocurrency plunged 15% in intraday trading, but regained some ground later as it climbed to $52K. Ether (ETH-USD) also fell 19% at one point. BTC slid after a disappointing July jobs report stoked fears that the U.S. economy is headed toward a recession and the Federal Reserve is behind the curve in cutting interest rates.
CrowdStrike (CRWD) has rejected Delta Air Lines' (DAL) claims that the cybersecurity firm was to blame for the carrier's extended flight disruptions in the aftermath of last month's global tech outage. "CrowdStrike reiterates its apology to Delta, its employees, and its customers," its external lawyer Michael Carlinsky wrote in a letter to Delta's counsel David Boies. "However, CrowdStrike is highly disappointed by Delta's suggestion that it acted inappropriately and strongly rejects any allegation that it was grossly negligent or committed willful misconduct."
Groq announced on Monday that it has raised $640M in a Series D funding round as it looks to compete with Nvidia (NVDA, Financial) in the semiconductor space. The new funding, which values the company at $2.8B, includes investors such as BlackRock (BLK), Neuberger Berman, Type One Ventures, Cisco (CSCO) and others. Groq produces language processing units, or LPUs, which it says are faster and more cost-efficient than GPUs for handling AI training needs.
Procter & Gamble (PG, Financial), Coca-Cola (KO, Financial), Costco (COST), Walmart (WMT, Financial), Philip Morris International (PM), and PepsiCo (PEP) were holding up better than broad stock market averages in early trading on Monday as investors took a more defensive position amid a global market selloff. The bloodbath started in Japan, where the Nikkei 225 Index plunged 13.2% for its worst session since the 2011 Fukushima nuclear meltdown. Adding to the concerns were the BOJ's steps toward policy normalization, and it has translated into Japan's world-beating rally this year being wiped out over the last several sessions.
Elon Musk said in a podcast with host Lex Fridman on Friday that a second trial patient has been implanted with the Neuralink brain-computer interface device. The CEO of Tesla (TSLA, Financial) and SpaceX identified the second patient as someone with a spinal cord injury similar to the first patient, with 400 of the implant's electrodes currently working. Neuralink mentions on its website that its implant has 1,024 electrodes.
