Stock Market Update: Dow Hits One-Month High, Tech Stocks Tumble
US stocks closed mixed on Monday, with the Dow reaching a one-month high but the S&P 500 and Nasdaq falling as investors shifted away from technology stocks that had driven this year’s rally. Here’s a breakdown of the latest market movements:
Dow Jones Industrial Average
- The Dow climbed nearly 0.7%, hitting a one-month high.
S&P 500
- The S&P 500 dropped about 0.3%.
Nasdaq
- The tech-heavy Nasdaq fell over 1%.
Nvidia and Tech Stocks
AI darling Nvidia saw a more than 6% decline for the third consecutive session. Last week, the chip maker briefly held the title of the world’s most valuable company, but it has since been surpassed by Microsoft.
- Other chip stocks like Broadcom, Qualcomm, and Marvel Technology also experienced significant one-day losses.
Investor Sentiment
While some investors may have taken profits in AI-related stocks, Rod von Lipy, managing director at UBS Private Wealth Management, believes that the pullback in the sector is temporary. He sees continued potential in companies that enable AI, such as semiconductor and cloud-based firms.
- Approximately 40% of companies in the S&P 500 have mentioned AI in their recent quarterly calls, indicating ongoing interest and investment in the sector.
Market Performance
Despite the overall decline in tech stocks, both Apple and Meta Platforms (formerly Facebook) saw gains. Apple’s stock rose following reports of potential collaboration with Meta on AI technology development for iPhones.
- Technology and consumer discretionary stocks were the main decliners among the S&P 500 sector indexes.
Energy Sector Outperformance
The energy sector was a standout performer, gaining over 2.5% on Monday. This trend was a contrast to the broader market movement away from tech stocks.
Fed Inflation Report
Investors are closely watching Friday’s release of the Personal Consumption Expenditures Price Index report, the Federal Reserve’s preferred inflation gauge. The report is expected to confirm a cooling trend in price increases, which could impact the Fed’s monetary policy decisions.
Hot Take: Market Mixes Highs and Lows
Despite the Dow’s one-month high, the overall market saw a mix of gains and losses driven by a rotation away from tech stocks. As investors navigate changing sector dynamics and economic indicators, staying informed about market movements and trends is crucial for making informed investment decisions.
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