Dips in US chip prices, crypto on the retreat
US stocks market dips on chip weakness. Nvidia down 3.0%. Dow up 0.11%, S&P down 0.23%, Nasdaq down 0.71%. Fed policy awaited
US Stocks Market Trends
In the US stock market, both the S&P 500 and the Nasdaq experienced declines on Tuesday, largely attributed to weakness in megacap and chip stocks. Nvidia, a leading AI chipmaker, saw a 3.0% drop despite unveiling the Blackwell B200, a chip claimed to be 30 times faster than its predecessor. This announcement failed to impress investors, possibly due to already factoring it into the stock’s high valuation. Other chipmakers, including AMD, Marvell Technology, and Intel, witnessed declines ranging from 1.9% to 4.9%. Super Micro Computer plummeted nearly 11.5% after revealing plans to sell 2 million shares, potentially fetching around $2 billion.
Market Indices and Stocks Performance
As of mid-morning, the Dow Jones Industrial Average edged up 0.11%, while the S&P 500 and the Nasdaq Composite dipped 0.23% and 0.71%, respectively. Notably, the information technology sector declined by 0.8%. Tesla and Meta Platforms, among other megacap stocks, registered losses, contributing to the downward trend. However, the previous session had seen a rebound in the Nasdaq, supported by growth stocks like Alphabet and Tesla.
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Federal Reserve Policy Expectations
Investor attention remained focused on the Federal Reserve’s March policy meeting, with anticipation regarding the central bank’s stance on interest rates. Recent robust inflation data prompted some traders to adjust their expectations, with fewer predicting a rate cut in June compared to the previous week. The upcoming economic projections from the Fed, particularly the dot plot, were viewed as potential indicators of the future trajectory of interest rates.
Global Stocks Insights
Internationally, Japanese stocks saw a rise, with the Nikkei 225 increasing by 0.7% following the Bank of Japan’s decision to hike its benchmark interest rate for the first time in 17 years. This move marked a shift from a prolonged period of rates below zero to a more normalized easing stance. However, Hong Kong and Shanghai stocks faced declines due to issues surrounding troubled property developer China Evergrande Group.
In Europe, Airbus SE abandoned talks to acquire Atos SE’s big data and cybersecurity business, impacting the latter’s debt reduction plans. Meanwhile, Unilever’s decision to spin off its ice cream businesses, including Ben & Jerry’s, led to a 2.6% rise in its US-traded shares.
Cryptocurrency and Commodities
Cryptocurrency-linked stocks experienced declines as Bitcoin extended its retreat, dropping below $63,300 after reaching a peak above $73,000. This downward trend in Bitcoin prices also affected shares of companies like Coinbase Global, Riot Platforms, and Marathon Digital Holdings. MicroStrategy Inc. continued its bullish stance on Bitcoin, making another multi-million dollar purchase, further increasing its holdings of the cryptocurrency.
In the commodities market, West Texas Intermediate crude rose by 0.7% to $83.34 a barrel. However, spot gold fell by 0.4% to $2,152.39 an ounce.
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