Stock market today/ Nvidia decline/ S&P 500 retreat/ retail sales growth/ Federal Reserve rate cuts/ Bitcoin record high/ NEW YORK/ Newslooks/ J. Mansour/ Morning Edition/ U.S. stock indexes dipped on Tuesday, with the S&P 500 falling 0.6% as Nvidia’s decline weighed on the market. Retail sales exceeded expectations, signaling a resilient economy, but raised questions about future Federal Reserve rate cuts. Broadcom also saw significant losses after a strong recent rally.
Wall Street Retreats: Quick Looks
- Market Performance: S&P 500 fell 0.6%, Dow Jones down 257 points, Nasdaq slipped 0.7%.
- Nvidia’s Impact: Stock dropped 3.4%, marking an extended losing streak.
- Retail Sales Data: November’s growth exceeded forecasts, signaling economic strength.
- Fed Speculation: Interest rate cuts may slow due to robust economic indicators.
- Broadcom Decline: Fell 6.3% after two days of substantial gains.
- Bitcoin Surge: Hit a record $108,000 before retreating to $107,500.
- Global Markets: FTSE 100 down 0.5%; Japan’s Nikkei 225 slid 0.2%.
Wall Street Dips Amid Nvidia Slide and Fed Speculations
Deep Look
Nvidia’s Continuing Decline
Nvidia, a key driver of the year’s stock market rally, dropped 3.4%, extending its recent struggles. The stock is down over 10% from its record high last month, as investors grow wary of its elevated valuation. Critics argue Nvidia’s price assumes near-flawless execution, raising concerns about its long-term sustainability.
Broadcom also contributed to the S&P 500’s decline, sliding 6.3% after two days of impressive gains fueled by strong earnings and optimistic forecasts tied to AI-related demand.
Retail Sales and Economic Signals
New data from the Commerce Department showed retail sales grew by 0.7% in November, exceeding economist expectations. The increase underscores consumer resilience heading into the holiday season, bolstered by strong auto sales and holiday discounts.
While encouraging for the economy, robust retail sales could complicate the Federal Reserve’s interest rate decisions. Lower rates stimulate economic growth but can also reignite inflation.
Chris Larkin of E-Trade noted:
“The Fed is still on track to cut rates tomorrow, but strong economic data could prompt a pause in January.”
Federal Reserve and Bond Market
The Federal Reserve is expected to announce its third rate cut of the year on Wednesday. However, persistent inflation may reduce the likelihood of additional cuts in early 2025. Treasury yields remained steady following the retail sales report, with the 10-year yield at 4.39% and the 2-year yield at 4.24%.
Sector Highlights
On the tech front, however, Nvidia and Broadcom were the heaviest drags on the S&P 500, reflecting a broader cooling of the sector’s momentum.
Global Markets and Cryptocurrency
Global markets mirrored Wall Street’s cautious tone. London’s FTSE 100 fell 0.5% ahead of a Bank of England rate decision, while Japan’s Nikkei 225 slipped 0.2% as the Bank of Japan prepared to raise rates for the first time in years.
Meanwhile, Bitcoin hit a record high of over $108,000 before retreating to $107,500. The cryptocurrency has seen a meteoric rise from $44,000 at the start of the year, fueled by optimism about potential pro-digital currency policies from President-elect Donald Trump.
Looking Ahead
Wall Street will focus on the Federal Reserve’s rate announcement and projections for 2025. Investors are also closely watching economic data and global monetary policy shifts for clues about future market direction.
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