Nvidia drops as S&P 500 and Nasdaq slip from records

US stocks were unchanged after a winning session driven by Big Tech on Thursday, with investors considering fresh labor data amid rising expectations for an interest rate cut.

The S&P 500 (^GSPC) slipped below the flatline after a record close. The Dow Jones Industrial Average (^DJI) gained 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) lost about 0.2% in the early session.

The stock market took a brief breather after the Nasdaq hit an all-time high on Wednesday. Tech stocks also helped extend the gains, with Nvidia (NVDA) overtaking Apple (AAPL) to become the second-largest U.S. company.

However, Nvidia shares gave up early session gains and fell below the flatline on Thursday, leaving the AI ​​chip giant’s market cap below the $3 trillion mark. Other megacap techs held steady, with Apple and Meta (META) little changed.

Meanwhile, Treasury yields eased to a tumble, helping to lift the stock market. The benchmark 10-year yield (^TNX) rose to around 4.30%, having fallen to its lowest level since March on Wednesday.

The market has seen recent soft economic signals as a reason to bring Federal Reserve policy back into the discussion, with ADP private payrolls missing the latest sign of a slowdown in the labor market. Traders now see a 69% chance of interest rate cuts in September, up from about 50% a week ago, according to estimates. CME Fedwatch Tool,

Across the globe, the European Central Bank on Thursday cut interest rates by 25 basis points for the first time since 2019, a widely anticipated move.

Read more: How does the labor market affect inflation?

Weekly U.S. jobless claims released Thursday morning were 229,000, while economists had expected 220,000. That data gives investors another indication about whether the Fed will accomplish its intended soft landing for the economy. But the countdown has begun for May’s monthly jobs report on Friday, which is seen as crucial for stocks.

Among individual leading companies, shares of Lululemon (LULU) rose 4% after the athletic apparel maker boosted its profit outlook and stock buyback program.

stay9 Updates

  • KeyBank maintains its hold on Apple at WWDC

    I applaud KeyBanc analyst Brandon Nispel for attempting to burst the hype bubble surrounding Apple’s (AAPL) WWDC next week.

    From the note they released this afternoon:

    “Investor excitement regarding a potential AI upgrade cycle from WWDC is overwhelming, which we have seen no evidence of and we believe this news is a sell-side event. We expect upgrade rates in the US to reach all-time lows. While China’s market share has declined, growth is still challenging in our view.”

  • Nvidia steps back, pushing market value below $3 trillion

    Nvidia’s (NVDA) valuation dropped below the $3 trillion mark on Thursday, a day after the company achieved the milestone.

    The AI ​​chip giant started with a gain but soon fell. The stock was trading down more than 1% at 11:45 a.m. ET.

    As Yahoo Finance’s Dan Hawley pointed out, Nvidia has been the poster child for investor enthusiasm in artificial intelligence, which accelerated with OpenAI’s release of ChatGPT in late 2022.

    Nvidia shares are up more than 140% so far this year.

    Read more information here.

  • Oil prices rise as ECB cuts interest rates, Saudi Arabia hints at phasing out production cuts

    Oil prices rose on Thursday after the European Central Bank lowered its key interest rate and OPEC leader Saudi Arabia signaled price stability was still a priority, indicating it could reverse an earlier decision to phase out some voluntary cuts from this year.

    West Texas Intermediate (CL=F) futures rose 0.8%, while Brent (BZ=F), the international benchmark price, also gained nearly 1%.

    Crude oil prices fell earlier this week after the oil alliance decided to continue most of its production cuts but begin phasing out voluntary cuts from October. The market had widely expected all cuts to remain in place until 2024.

    On Thursday the ECB cut its key rate by 25 basis points for the first time since 2019, a move that was widely anticipated.

    Low interest rates boost economic activity which increases the demand for oil and gas.

  • Nvidia reverses earlier gains, falls into negative territory

    Nvidia (NVDA) slipped into negative territory after gaining 2.6% in early trading.

    The stock hit an all-time high of $1,255.87 shortly after the market opened but had since fallen by about 3% by 10 a.m. Eastern time.

    Nvidia’s decline has pushed the Nasdaq Composite into negative territory

  • Stock market stable as Nvidia rises

    U.S. stocks were little changed on Thursday morning after a tech-led rally that pushed the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) to record highs.

    Nvidia (NVDA) opened slightly higher, as the AI ​​darling surpassed the $3 trillion market capitalization level in the previous session.

    On Thursday morning, the S&P 500 and Dow Jones Industrial Average (^DJI) hovered around the flatline. The Nasdaq gained about 0.1%.

    Investors are eyeing the much-awaited employment report to be released on Friday morning.

  • The commercial PC market is booming

    Two things make a trend in my books.

    Recent results from major PC makers showed that the commercial PC market has finally rebounded.

    John Donovan of Loop Capital released a note this morning that provides more details about the emerging trend:

    “The more we explore this space, clearly the news and updates are becoming increasingly exciting. All the elements are in place for a long and extended refresh cycle. Add in the finalization of back-to-work principles at Input, the extended and prolonged lack of upgrades since the pandemic (this is applicable to the consumer side to an extent as well), the Windows 10-11 rollover – and this is leading to growing optimism. Add to this the simple fact that AI PC solutions will undoubtedly carry higher ASPs, particularly on the commercial side of the ledger, and the optimism appears realistic. Keep in mind that corporations upgrading cannot simply go the “cheap route” because AI innovations will render “just good enough solutions” obsolete, so we see a roadmap to a level of “overbuying” in the near future. More good news for PC OEMs.”

    HP Inc. (HPQ) CEO Enrique Lores told me about this surge.

  • A new face on the Walmart board

    A worthwhile new side hustle for one of the most popular CEOs in the fast-food industry.

    Chipotle (CMG) CEO Brian Niccol has officially been elected as a director to the Walmart (WMT) board. He is now the fifth new, independent director appointed by Walmart since 2017, CEO Doug McMillon said ahead of a shareholder vote Wednesday morning.

    Niccol replaces longtime board member Rob Walton (son of Walmart founder Sam Walton), who retired on Wednesday.

    This isn’t Niccol’s first rodeo as a board member outside of Chipotle. He’s previously served on the boards of KB Home ( KBH ) and Harley-Davidson ( HOG ).

    Having Nicole involved means a lot.

    Both Chipotle and Walmart have seen success in recent years as value-conscious consumers look for items that they feel help them save their money. Niccol has also led the charge for digital ordering at Chipotle, while McMillon has led the digital rebirth at Walmart.

    While other food chains struggled to maintain traffic last quarter, Chipotle’s same-store sales grew 7%, thanks in part to Niccol’s efforts.

    The situation was similar at Walmart: Its same-store sales in the U.S. rose 3.9% year over year.

    Shares of the burrito chain are up nearly 38% so far this year, while Walmart shares are up more than 26%. It’s also worth noting that Walmart recently completed a 3-for-1 stock split, while Chipotle is awaiting shareholder approval for its own 50-for-1 split.

  • Hey, before you get too excited about this Lululemon quarter…

    Bears pounced on Lululemon’s ( LULU ) stock before its earnings report last night, so I got a 9% pre-market jump on the results, which wasn’t all that brutal.

    But this was by no means a typical Lululemon quarter (strong double-digit growth in every division), and the positive reaction may be exaggerated.

    Worryingly, comparable sales in the Americas division remained unchanged compared to the previous year. The company highlighted defaults with customers in the paint, which is usually not a good sign of future demand. (I used to cover the stock as an analyst — trust me, this is not a good indicator.)

    “We advise investors to be sellers on any strength; in our view the Lululemon brand and its fundamentals have peaked, and we expect relentless competition ahead,” Jefferies analyst Randal Konik said in a client note this morning.

    Konik reiterated an under-perform rating on the stock.

    Makes a lot of sense.

  • It’s good to learn AI terminology

    If you’re going to invest in AI, it’s a good idea to understand its language.

    And that includes me, who is not investing in AI but is writing about it more than I would have thought possible a decade ago.

    Below is some useful information on the topic of “liquid cooling” from my conversation with HPE (HPE) CEO Antonio Neri on Yahoo Finance Live. I imagine you’ll be hearing more about this as new AI chips are powered by AI.

    I also found what Neri said about Nvidia (NVDA) interesting.

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