US stocks exhibited mixed performance on Monday as uncertainty around potential interest rate cuts loomed over the market. Investors are particularly focused on the upcoming earnings report from Nvidia (NVDA), set for Wednesday, and the postponed September jobs report, which is expected to be released on Thursday.
The tech-heavy Nasdaq Composite (^IXIC) edged up 0.25%, while the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) remained largely unchanged after initially declining at the market’s opening. This gain comes as Wall Street prepares for Nvidia’s earnings, a highly anticipated event that will address lingering doubts over Big Tech valuations and significant expenditures related to artificial intelligence.
A noteworthy catalyst for the market was Berkshire Hathaway’s (BRK-B) announcement of a nearly $5 billion investment in Alphabet (GOOG, GOOGL). This strategic move, likely one of the final ones under Warren Buffett’s leadership, prompted a 6% surge in Alphabet’s stock during early trading. Conversely, Nvidia saw a dip, following news that hedge fund Thiel Macro, co-founded by Peter Thiel, had sold its stake in the AI chipmaker.
Investors are eagerly awaiting the delayed September jobs report, which is expected to provide clearer insights into the health of the labor market. This report comes on the heels of a more cautious stance from Federal Reserve officials, who have raised doubts about the likelihood of rate cuts in the near future. Market futures currently reflect a 45% probability of a rate cut next month, a noticeable drop from 62% just a week earlier.
In addition to Nvidia, major retailers including Walmart (WMT), Home Depot (HD), Target (TGT), Lowe’s (LOW), and Gap (GAP) are all scheduled to report earnings this week, providing insights into consumer strength.
The cryptocurrency market is also facing fluctuations, particularly Bitcoin (BTC-USD), which has seen its price fall from a historic high of over $126,000 to around $94,000 in just a few weeks. This decline showcases a potential shift in investor sentiment toward a more risk-averse posture.
Within the realm of Big Tech, the so-called “Magnificent Seven” stocks showed a mixed bag of performance on Monday. While Alphabet experienced a rise, companies like Apple (AAPL) and Microsoft (MSFT) saw minor declines. Notably, Nvidia shares trimmed earlier losses but were still down about 1% as news of the stake sale by Thiel Macro surfaced.
The market opened with a slight dip, as all three principal indices fell briefly but quickly rebounded to hover near flat territory. The Nasdaq initially lost about 0.5%, the S&P 500 about 0.4%, and the Dow dropped around 0.3%. However, the indices managed to recover shortly thereafter, signaling resilience amidst ongoing concerns regarding the Federal Reserve’s monetary policy.
In the biotech sector, Zymeworks (ZYME) and Jazz Pharmaceuticals (JAZZ) saw significant gains—over 34% and 20%, respectively—following promising results from a late-stage trial of their stomach cancer treatment. This positive news was underscored by statements from Zymeworks’ CEO, who described the outcomes as a pivotal moment in a field traditionally limited by treatment options.
Furthermore, XPeng (XPEV), a Chinese electric vehicle manufacturer, forecasted disappointing fourth-quarter sales, attributing its cautious outlook to a fierce pricing war within China’s competitive EV market. This projection created downward pressure on XPeng’s stock, which fell approximately 4% in pre-market trading.
Amidst the fluctuations, the broader market remains vigilant as traders digest recent developments, preparing for a week that promises to deliver crucial economic indicators and earnings reports that could set the tone for the coming months.
