Wall Street’s main indexes ended the day in the red on Monday, primarily driven by a significant drop in Nvidia, the leading player in the artificial intelligence sector. The decline came as investors reacted to news that China’s market regulator has launched an investigation into Nvidia over suspected antitrust violations, leading to a 2.5% decrease in the company’s stock. This development weighed heavily on the technology sector, which fell by 0.45%.
The fallout from Nvidia’s troubles also impacted Advanced Micro Devices (AMD), which saw its stock plummet by 5.7% following a downgrade from BofA Global Research. This downturn contributed to a 0.87% decline in the Philadelphia Semiconductor Index.
“The market was caught off guard by China’s investigation into Nvidia, creating a ripple effect across tech stocks,” noted Sam Stovall, chief investment strategist at CFRA Research.
The Dow Jones Industrial Average fell by 240.59 points, or 0.54%, closing at 44,401.93. The S&P 500 lost 37.42 points, or 0.61%, ending at 6,052.85, while the Nasdaq Composite dropped 123.08 points, or 0.62%, to settle at 19,736.69.
Among other notable movements, Comcast’s shares slid by 9.5% after the company projected a loss of over 100,000 broadband subscribers in the fourth quarter, impacting the communication services sector by 1.3%. Conversely, Hershey’s stock surged by 10.9% following reports that Mondelez is exploring an acquisition of the chocolate maker.
As investors await critical inflation data—specifically the Consumer Price Index (CPI) set for release on Wednesday and the Producer Price Index (PPI) on Thursday—market sentiment remains cautious ahead of the Federal Reserve’s upcoming meeting on December 17-18.
Traders are increasingly betting on a potential rate cut of 25 basis points at this meeting, particularly after Friday’s data indicated a rise in unemployment to 4.2% in November, suggesting a cooling labor market.
Despite Monday’s downturn, Wall Street began December positively earlier this month, with both the S&P 500 and Nasdaq recording gains in their first week. However, this recent slump highlights ongoing volatility as investors assess both corporate earnings and broader economic indicators.
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