Markets News, October 8, 2024: S&P 500, Nasdaq Surge as Nvidia Leads Large-Cap Gains; Oil Falls Sharply
· InvestopediaMajor indexes surged Tuesday, recovering from the previous session's steep downturn, as large-cap technology stocks surged and oil prices plunged.
The S&P 500 and Nasdaq closed 1% and 1.5% highger, respectively, while the Dow Jones Industrial Average added 0.3%. The major indexes, which entered the week near all-time highs, tumbled on Monday as oil prices jumped amid concerns about Middle East tensions and as expectations for big interest rate cuts subsided following last week's strong jobs report.
Large-cap tech stocks were higher across the board Tuesday, led by AI investor favorite Nvidia (NVDA), which rose 4.1% on continued optimism about demand for the company's next-generation products. Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Meta Platforms (META), Alphabet (GOOGL) and Broadcom (AVGO) also gained ground. Nvidia had surpassed Microsoft yesterday to become the second-largest company by market capitalization.
Shares of PepsiCo (PEP) rose 1.9% even as the consumer goods company reported quarterly results that came in short of expectations. The earnings reporting season kicks into high gear later in the week when several big banks are scheduled to report their results.
Crude oil futures fell more than 4%, giving back a big chunk of the gains that have been posted over the past week amid rising concerns that an escalation of the conflict in the Middle East could threaten global oil supply. The S&P 500 energy sector was down 2.6%, as some of the companies that had surged in line with the recent oil price gains, such as Marathon Petroleum (MPC), Phillips 66 (PSX) and Valero Energy (VLO), fell sharply.
U.S.-traded shares of Chinese companies also tumbled after authorities in Beijing failed to announce new stimulus measures as the country reopened after a week-long holiday. The iShares MSCI China ETF (MCHI), which had gained 38% since the first batch of measures were announced two weeks ago, dropped 11% on Tuesday.
The economic data calendar was light on Tuesday but picks up significantly later in the week with the release of closely watched inflation data and the latest reading on consumer sentiment. Investors will be monitoring the numbers for further confirmation that the economy is on sound footing, while also looking for clues about how aggressive the Federal Reserve will be as it cuts interest rates. The Fed cut its benchmark fed funds rate for the first time in four years last month.
Following the strong jobs report on Friday, market participants now believe it's likely the Fed will make two quarter-percentage-point cuts in the benchmark rate before the end of the year, according to fed fund futures trading data. Before the jobs report, markets were pricing in the likelihood that the central bank would announce a half-point cut at the Fed's next policy meeting in November, as well as a cut in December.
The yield on 10-year Treasurys was down slightly at 4.014%, after jumping above 4% on Monday for the first time in two months as market hopes for big rate cuts dimmed.
Gold futures were down about 1% at around $2,640 an ounce, the lowest level in more than two weeks, while bitcoin was down 1.3% to around $62,500.
Biggest S&P 500 Movers on Tuesday
13 hr 8 min ago
Advancers
- Shares of data analytics firm Palantir Technologies (PLTR) jumped 6.6% on Tuesday, the strongest daily gain in the S&P 500. Asset management firm Ark Invest spotlighted software as an area with more room to benefit from artificial intelligence (AI) trends. Rahul Bhushan, managing director of Ark Invest Europe, said firms like Palantir could be poised to take market share from the mega-cap tech companies whose cloud-computing platforms have been a focal point in the emerging AI boom.
- Edwards Lifesciences (EW) shares surged 6.2%. The medical device company could see increased momentum for its heart valve repair system after The Centers for Medicare and Medicaid Services (CMS) said it was evaluating the possibility of national Medicare reimbursement for transcatheter repair procedures.
- Shares of cybersecurity provider Palo Alto Networks (PANW) were up 5.1% following positive commentary from several investment research firms. Goldman Sachs boosted its price target on Palo Alto, suggesting the company's strategy to upgrade to more advanced serviced offerings could drive growth. Meanwhile, BNP Paribas initiated coverage of the networking technology company's stock with an "outperform" rating.
Decliners
- Crude oil futures prices fell more than 4% amid reports of potentially easing tensions in the Middle East. The slip in prices pressured oil and gas stocks. Marathon Petroleum (MPC) shares plunged 7.7%, posting the steepest drop of any stock in the S&P 500. Shares of fellow refiner Valero Energy (VLO) closed the session down 5.3%.
- Super Micro Computer (SMCI) shares slipped 5.0% on Tuesday, giving back a portion of the strong gains posted by the stock in the previous session after the company reported upbeat delivery figures for its graphics processing units. Challenges to Supermicro include reports emerging last month that the Department of Justice is conducting an investigation into the firm's accounting practices.
- Analysts at KeyBanc downgraded their view on shares of industrial chemical maker Celanese (CE) to "sector weight" from "overweight," citing softness in the automotive end market and a cautious outlook for the near term. Celanese shares lost 4.6% on Tuesday.
Palantir Jumps on Fresh AI Demand Optimism
13 hr 44 min ago
Shares of data analytics software firm Palantir Technologies (PLTR) were Tuesday's biggest gainers in the S&P 500 after after asset management firm Ark Invest spotlighted software as an area with more room to benefit from artificial intelligence (AI) trends.
In an interview with CNBC, Rahul Bhushan, managing director of Ark Invest Europe, said data analytics and software firms like Palantir could be poised to take market share from mega-capitalization tech companies like Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOGL), whose cloud-computing platforms have been a focal point in the emerging AI boom.
According to Bhushan, hardware and infrastructure have accounted for 80% of the value that has accrued over the past two and a half years as investors pour money into shares of AI-related companies. Ark Invest is "finding far more asymmetrical opportunities today" in companies operating further down the "AI stack"—including those providing software-as-a-service and platform-as-a-service products—Bhushan said.
Data analytics providers like Palantir can provide customized data and AI services that are tailored to the needs of specific clients, Bhushan said.
Palantir shares rose more than 6% on Tuesday, leaving them up some 140% in 2024.
Robinhood Stock Soars After Upgrade, Investor Day News
15 hr 7 min ago
Robinhood Markets (HOOD) shares jumped Tuesday after the online trading platform announced its first investor day, and Barclays gave a positive view of the company in its third-quarter outlook for the brokerage industry.
Robinhood said the investor day would be held on Dec. in New York City, where the company will "share more about our vision for the next 10+ years and how that can drive customer and shareholder value." Executives will also take questions from investors and analysts.
Barclays raised its price target for Robinhood to $23 from $20, with its analysts writing in a note to clients that they "see momentum in the business likely to continue given the appealing offers and product set." They said transaction revenues should grow from the second quarter, and could come in 5% ahead of Wall Street estimates.
The analysts added that they expect Chief Executive Officer (CEO) Vlad Tenev to unveil new products at the company's "HOOD Summit" scheduled for Oct. 16.
Robinhood shares were up 10% in late trading Tuesday and have doubled in price since the start of 2024.
S&P 500 Moves Near Another Record High
16 hr 53 min ago
With its rebound on Tuesday, the S&P 500 is now just 0.5% away from its all-time closing high set on Sept. 30.
Chinese Stocks Tumble After Two Weeks of Big Gains
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Chinese stocks tumbled Tuesday after China reopened following a week-long holiday and disappointed investors hoping for further stimulus measures.
During a key policy meeting, the Chinese government said it would speed up spending but otherwise mainly repeated its previous plans to increase investment and boost help for fresh graduates and low-income groups, Bloomberg reported. Investors had been hoping for a slew of fiscal spending measures to accompany the mainly monetary-focused stimulus announced last month.
The iShares MSCI China ETF (MCHI), which had gained 38% since the first batch of measures were announced two weeks ago, was down 12% in afternoon trading Tuesday,
U.S.-listed shares of Chinese e-commerce giants Alibaba (BABA), JD.com (JD), and Temu parent PDD Holdings (PDD) each fell more than 6%.
Nvidia Stock Continues Rising, Nears Record High
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Nvidia (NVDA) stock rose on Tuesday after Foxconn, the world’s largest contract electronics manufacturer, touted strong demand for artificial intelligence servers.
Executives at Foxconn said druing the company's annual tech day they were constructing in Mexico the world’s largest facility for assembling AI servers to house Nvidia’s GB200 chips, part of its Blackwell AI architecture.
Young Liu, chair of Foxconn, said in an interview with Bloomberg Television that the company is aiming to produce 20,000 GB200 NVL72 servers at the factory in 2025. HSBC analysts have estimated the price of one GB200 NVL72 server is about $3 million.
Demand for Nvidia’s Blackwell system is “awfully huge,” said Benjamin Ting, Foxconn’s senior vice president of cloud enterprise solutions, at the company’s tech day. Liu told Bloomberg demand was “crazy,” echoing comments from Nvidia CEO Jensen Huang last week.
Nvidia stock was up nearly 4% Tuesday afternoon, extending gains from yesterday when the company overtook Microsoft (MSFT) as America’s second-most valuable company. The stock, which was trading near $133 on Tuesday, is approaching its record closing high of $135.57, which was set on June 18. Nvidia's all-time intraday high, set on June 20, is $140.76.
Energy Stocks Slide as Oil Price Plunges
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Shares of several energy companies moved sharply lower Tuesday as crude oil futures plunged after several days of big gains spurred by concerns about escalating tensions in the Middle East.
Brent crude futures, which had gained 13% over the past five trading sessions amid fears that conflict in the Middle East could affect global oil supply, were down nearly 5% in late-morning trading. Some of the stocks that had been big beneficiaries of the run-up in oil prices fell in tandem.
Marathon Petroleum (MPC) was down 8%, leading S&P 500 decliners, while Valero Energy (VLO) and Phillips 66 (PSX) also fell sharply.
DocuSign, MDU Resources Rise on S&P Global Index Changes
20 hr 12 min ago
Shares of DocuSign (DOCU) and MDU Resources Group (MDU) advanced in early trading Tuesday, a day after S&P Global announced changes to its indexes.
DocuSign is set to replace MDU in the S&P MidCap 400 index, while MDU is moving to the S&P SmallCap 600 index, bumping Chuy Holdings (CHUY).
S&P Global explained that the latter decision was based on the fact that Chuy is being purchased by S&P 500 Index member Darden Restaurants (DRI), and that deal is expected to close soon. It added that MDU plans to spin off a company, its Everus Construction Group subsidiary, later this month.
All of the index moves will become effective before the opening of trading on Friday.
Stocks often get a lift or turn lower when S&P Global shifts the membership of its indexes since inclusion exposes them to a wider group of investors who could become aware of a company through an index. They can also be added to various index funds that track stocks that are added to the measures. The opposite is true as well.
Super Micro Computer Levels to Watch as Stock Surges
22 hr 5 min ago
Shares in server maker Super Micro Computer (SMCI) were up 5% in premarket trading Tuesday after surging 16% yesterday. The latest gains come after the company reported strong shipments of its GPUs, fueled by AI demand.
Super Micro Computer shares formed two troughs at similar levels on the chart last month, raising the possibility of a double bottom, a classic chart pattern that signals a potential bullish reversal.
Investors should watch key overhead price levels on Super Micro's chart around $48, $70, and $97.50, while monitoring important longer-term support near $35.50.
Read the full technical analysis piece here.
Major Indexes Poised to Open Higher Tuesday
22 hr 42 min ago
Futures tied to the Dow Jones Industrial Average were up 0.2%.
S&P 500 futures were up 0.4%.
Nasdaq 100 futures were up 0.5%.