Wall Street Today | Nvidia Shares Pull Back, Dragging Stock Market Lower

Moomoo Recap US wrote a column · Mar 9, 2024 05:21

Wall Street Today | Nvidia Shares Pull Back, Dragging Stock Market Lower

RECAP

After carrying the entire US stock market on its back, pushing major indices to record highs, $NVIDIA (NVDA.US)$ shares took a breather.

The stock market rally paused as investors debate whether shares have climbed too far too fast and are now at frothy levels. Another point of contention was whether the recent uptick in unemployment in February could be a signal the labor market is now cooling enough to convince the Federal Reserve to start cutting interest rates.

The tech-heavy $Nasdaq Composite Index (.IXIC.US)$ lost 1.16% to 16,085.11, while the $S&P 500 Index (.SPX.US)$ slipped 0.65% to 5,123.69. The $Dow Jones Industrial Average (.DJI.US)$ slid 0.2% to 16,085.

The decline came as Nvidia shares shed 5.6% after touching a record high of $974 earlier in the day. The stock has more than tripled from a low of $222.97 reached in March last year. Despite the slump on the last trading day of the week, shares are still up 6.4% in the past five days.

The one bright spot was bitcoin that surged to a record $70,000, before paring gains. The upward momentum has been fueled by increasing demand from institutional investors after the Securities and Exchange Commission approved the trading of exchange-traded funds backed by the biggest cryptocurrency.

MACRO

Unemployment rose to 3.9% in February, the highest in two years, data from the Bureau of Labor Statistics showed. While the latest release showed better-than-expected 275,000 jobs were added in February, previous payroll figures were lowered, muting the latest monthly gains.

The revision meant non-farm job gains totaled only 229,000 in January, instead of the previously reported 353,000. For December, the payroll data was revised down by 43,000.

Source: Bureau of Labor Statistics

SECTORS

Oil Demand Worries

Oil futures declined on Friday, deepening losses for the week, as downward revisions to U.S. monthly jobs data fueled concerns over the resilience of the economy in the US, the largest consumer of the fuel. The increase in unemployment could lead to less travel and driving for workers who lost their jobs, adding to oil demand concerns.

COMPANIES

Broadcom's Results Fail to Impress

$Broadcom (AVGO.US)$ shares slumped after the slight beat in the chipmaker's $50 billion revenue guidance for the full fiscal year failed to impress investors who have seen the stock price more than doubled in the past year. The rally was juiced by the same AI craze that sent the stock of market leader $NVIDIA (NVDA.US)$ soaring this year, helping the tech giant overtake $Alphabet-A (GOOGL.US)$ as the third-most valuable company.

Wegovy's FDA Approval

Not even the potential for an expanded insurance coverage for $Novo-Nordisk A/S (NVO.US)$'s Wegovy could arrest the stock's slide. Shares slipped even after the US Food and Drug Administration approved Wegovy (semaglutide) injection as treatment to reduce the risk of cardiovascular death, heart attack and stroke in adults. Strong demand for the drug to curb obesity helped fuel the stock's 28% surge this year.

Cannabis Stocks Go High on Biden

$CURALEAF HOLDINGS INC (CURLF.US)$, $Cresco Labs, Inc. (CRLBF.US)$, $Trulieve Cannabis Corp (TRUL.CA)$, $Green Thumb Industries Inc. (GTBIF.US)$, $VERANO HOLDINGS CORP (VRNOF.US)$, $AYR WELLNESS INC (AYRWF.US)$, and $TerrAscend (TSNDF.US)$ rose after US President Joe Biden said "no one should be jailed for using or possessing marijuana!" In his state of the union address Thursday, Biden also said directed his Cabinet to review the federal classification of marijuana.

Bitcoin's Climb to $70,000

$Coinbase (COIN.US)$, $MARA Holdings (MARA.US)$ and $Riot Platforms (RIOT.US)$ rallied, tracking the unstoppable gains in $Bitcoin (BTC.CC)$ that sent the cryptocurrency to a fresh record of $70,000. While prices have since pulled back from that high, bitcoin stayed in the green, defying the negative sentiment that swept across the stock market.

- Luzi Ann Santos | moomoo News

Source: Bloomberg, Dow Jones, CNBC, Reuters

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