The S&P 500 index faced a setback as Nvidia’s stock plummeted by 6.1%, dragging down the overall performance of the index. Despite this, approximately 75% of stocks in the index saw gains, indicating a mixed day for investors.
Nvidia, a chip company that has seen a meteoric rise of 1,000% since the autumn of 2022, is now on a three-day losing streak. The demand for Nvidia’s chips to power artificial intelligence applications has been a major driver of the recent record-breaking performance of the U.S. stock market.
However, concerns have been raised about a possible bubble in the stock market due to the frenzied AI boom and high expectations among investors. Nvidia’s stock has been pulling back after briefly surpassing Microsoft as the most valuable company on Wall Street.
The size of Nvidia’s market capitalization means that its stock movements have a significant impact on the S&P 500 and other indexes. It was the heaviest weight on the S&P 500 on Monday, highlighting the influence of tech giants on the broader market.
In other news, RXO saw a significant jump of 22% after agreeing to acquire the Coyote Logistics freight brokerage business from UPS for nearly $1.03 billion. This deal positions RXO as the third-largest provider of brokered transportation in North America. UPS, which originally bought Coyote in 2015 for $1.8 billion, also saw a 1.3% increase in its stock price.
Meanwhile, Under Armour experienced a turnaround in its stock performance, swinging from an early loss to a gain of 1.6%. The athletic wear company announced a $434 million settlement to resolve charges related to its accounting and sales practices. Under Armour denied any wrongdoing but agreed to separate the roles of chairman and CEO for at least three years.
Overall, the stock market is navigating through a complex landscape influenced by factors such as inflation, interest rates, and economic growth. With Treasury yields holding steady and hopes for a potential rate cut by the Federal Reserve, investors are closely monitoring economic indicators for signals of future market trends.
