Nvidia falls while the S&P 500 and the Nasdaq disappear from the record

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US stocks fell on Thursday after a Big Tech-driven winning session, with investors weighing new labor data against growing hopes for rate cuts.

The S&P 500 (^GSPC) fell below the flat after a record close. The Dow Jones Industrial Average (^DJI) fell slightly, while the tech-heavy Nasdaq Composite (^IXIC) gave back the early session, down about 0.3%.

Stocks took a breather after the roaring rally that also lifted the Nasdaq to a record high on Wednesday. Technology stocks contributed to the gains, with Nvidia (NVDA) overtaking Apple (AAPL) as the second-largest U.S. company.

However, on Thursday, Nvidia shares gave back early session gains and fell below the flatline, pushing the AI ​​chip giant’s market capitalization below the $3 trillion mark. Megacap techs Apple and Meta (META) were little changed.

Meanwhile, government bond yields rebounded from declines that boosted the stock market rally. The benchmark 10-year yield (^TNX) rose slightly to around 4.30%, hitting its lowest level since Wednesday in March.

The market has seen the recent soft economic data as a reason to put another policy pivot on the table from the Federal Reserve, with ADP’s private payrolls missing only the latest sign of a labor market cooling. Traders now see a 69% chance of a rate cut in September, up from about 50% a week ago, according to the CME FedWatch tool.

On the other side of the ocean, the European Central Bank cut interest rates by 25 basis points on Thursday for the first time since 2019, a measure that was widely anticipated.

Read more: What influence does the labor market have on inflation?

Weekly U.S. unemployment claims released Thursday morning came in at 229,000, versus the 220,000 economists had expected. The data gives investors another clue as to whether the Fed will achieve the desired soft landing for the economy. But the countdown is on for Friday’s May monthly jobs report, which is considered crucial for stocks.

Among individual investors, shares of Lululemon (LULU) fell 4% after the athleisure clothing maker boosted its earnings outlook and stock buyback program.

Live10 updates

  • GameStop shares jump 17% as “Roaring Kitty” livestream teases

    Shares of Gamestop (GME) fell about 20% on Thursday afternoon following a post on YouTube from an account linked to Keith Gill.

    Gill, credited with fueling the 2021 meme stock rally, is also known as “Roaring Kitty” on X, formerly Twitter, and YouTube. The post wasn’t an actual video, but rather a teaser for a livestream that would begin Friday at noon.

    GameStop shares have been on a wild ride in recent weeks after Gill’s X account started posting for the first time in three years. The stock has since fallen from its peak, but remains up about 130% over the past month.

    Gill, who rose to fame on YouTube by posting videos talking about GameStop, has yet to appear despite the activity on his various social accounts. But the YouTube post follows other posts from Gill’s accounts on X and Reddit in recent weeks.

  • KeyBanc really takes on Apple in WWDC

    I appreciate KeyBanc analyst Brandon Nispel trying to burst the hype bubble surrounding Apple’s (AAPL) Worldwide Developers Conference (WWDC) next week.

    From his note this afternoon:

    “Investor enthusiasm is extremely high regarding a potential AI upgrade cycle triggered from WWDC, which we have seen no evidence to be true and believe is more of a ‘sell-the-news’ event. We continue to expect that US upgrade rates will reach historic lows. While market share losses in China have improved, growth is likely to remain challenged in our view.”

  • Nvidia is retreating, sending its market value below $3 trillion

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

    The artificial intelligence chip giant opened higher but quickly fell. The stock fell more than 1% around 11:45 a.m. ET.

    As Yahoo Finance’s Dan Howley reported, Nvidia has been the example of investor enthusiasm for artificial intelligence, which accelerated with OpenAI’s release of ChatGPT in late 2022.

    Nvidia shares are up more than 140% year to date.

    Read more here.

  • Oil gains as the ECB cuts interest rates, Saudi Arabia signals flexibility in gradually phasing out production cuts

    Oil gained on Thursday after the European Central Bank cut its key interest rate and OPEC leader Saudi Arabia said it still prioritizes price stability. This indicates it could change an earlier decision to phase out some voluntary reductions from this year.

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

    Earlier this week, oil prices fell following a decision by the oil alliance to keep most production cuts in place but start phasing out voluntary cuts from October. The market had widely expected that all cuts would remain in place until 2024.

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

    Lower interest rates tend to stimulate economic activity, increasing demand for oil and gas.

  • Nvidia reverses previous gains and ends up in negative territory

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

    The stock hit an all-time high of $1,255.87 shortly after market open, but then fell as much as 3% at 10 a.m. ET.

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

  • Shares stable now that Nvidia is a few centimeters higher

    U.S. stock prices were little changed Thursday morning after a tech-driven rally that sent the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) to records.

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

    On Thursday morning, the S&P 500 and the Dow Jones Industrial Average (^DJI) were hovering around the flat line. The Nasdaq rose about 0.1%.

    Investors have their eyes on the highly anticipated jobs report due Friday morning.

  • The commercial PC market is recovering

    Two are a trend, in my books.

    Recent results from the major PC manufacturers indicate that the commercial PC market is finally rebounding.

    John Donovan of Loop Capital comes out with a note this morning that provides more insight into the emerging trend:

    “The more we delve into this sector, honestly, the news and updates become more and more exciting. All ingredients are present for a long-lasting and extended renewal cycle. Inputs include the completion of back-to-work doctrines, an extensive and extended renewal cycle. lack of upgrades since the pandemic (this also plays out on the consumer side to some extent), the rollover of Windows 10-11 – and this is leading to growing optimism ASPs, especially on the commercial side of the ledger, and the optimism seems realistic. Keep in mind that upgrading companies simply cannot take the ‘cheap route’ as AI innovations would make ‘just good enough solutions’ obsolete, we see. a roadmap to a level of “overbuying” in the near future.

    This is what CEO Enrique Lores of HP Inc. (HPQ) told me about this revival.

  • A new face on Walmart’s board

    A meaningful new side job for one of the most popular CEOs in the fast food industry.

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

    Niccol takes over the place of former 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 Chipotle’s borders. He previously served on the boards of directors of KB Home (KBH) and Harley-Davidson (HOG).

    The addition of Niccol makes sense.

    Both Chipotle and Walmart have seen success in recent years as value-conscious consumers look for items they believe can boost their dollar. Niccol has also led digital ordering at Chipotle, while McMillon has led a digital renaissance at Walmart.

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

    A similar vibe at Walmart: U.S. same-store sales rose 3.9% year over year.

    The burrito chain’s shares are up nearly 38% this year, while Walmart’s 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 the 50-for-1 split.

  • Hey, before you get excited about this Lululemon neighborhood

    The bears raided Lululemon (LULU) stock last night ahead of the earnings report, so I’m getting a 9% pre-market pop on the results that weren’t quite as brutal.

    But this wasn’t a typical Lululemon quarter by any means (strong double-digit growth at every division), and the positive reaction may be overstated.

    Worryingly, comparable sales in the US division remained unchanged from the previous year. The company called out misses from customers in colors, which is usually not a good sign of future demand. (I used to cover the stock as an analyst – believe me, this is not a good indicator.)

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

    Konik reiterated an underperform rating for the stock.

    It makes a lot of sense.

  • Good for learning AI terminology

    If you’re going to invest in artificial intelligence, it’s good practice to understand the jargon.

    And that also applies to the undersigned, who does not invest in AI, but writes much more about it than I thought ten years ago.

    Here’s some helpful insight into the topic of “liquid cooling” below in my conversation with Antonio Neri, CEO of HPE (HPE) on Yahoo Finance. I think you’ll be hearing more about this given the power new AI chips are generating.

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

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