- Futures are trying to claw back Tuesday’s losses. Dow Jones Industrial Average futures gained 92 points, or 0.18%, early Wednesday, while S&P 500 futures climbed 0.6% and Nasdaq-100 futures advanced 1.43%, according to CNBC, with tech leading the attempted rebound.
- Tuesday left technical damage. The S&P 500 fell 0.38% to 7,520.93 for its first negative session in three and remains 4.1% below its record, while the Nasdaq Composite fell 0.74% to 25,065.87, closing below both its 50-day and 200-day moving averages and sitting 9.6% below its record. The Dow lost 0.3% to 52,231.89, its third negative session in four.
- Nvidia was at the center of the decline. The chipmaker fell 5.5% as CEO Jensen Huang’s affair with an alleged Chinese spy weighed on the stock for a second straight session, and the two-day slide cut its market value to around $4.07 trillion, its lowest since late March, CNBC reported.
- The Fed is now expected to hike. October’s consumer price index rose 0.4% from September, topping expectations, and the odds of a quarter-point increase next month rose to about 90% on CME Group’s FedWatch tool. “The question now is more of one of the extent of the hike,” wrote Rick Rieder, BlackRock’s CIO of global fixed income.
What Happened?
U.S. stocks closed lower on Tuesday as Nvidia’s drop and a hotter-than-expected inflation report weighed on sentiment, with UnitedHealth adding the most points to the Dow and Caterpillar subtracting the most. Comments from Fed Governor Christopher Waller also led traders to price in a greater chance of a quarter-point move. Overnight, Asia was mixed: Japan’s Nikkei 225 traded 0.85% higher, South Korea’s Kospi rose 1.22% and Australia’s S&P/ASX 200 added 0.23%, while Hong Kong’s Hang Seng fell 0.66% and the CSI 300 lost 0.39%. Taiwan Semiconductor Manufacturing shares rose 2.19% after its board approved investments of up to $1 billion in Anthropic and OpenAI, and Stoxx 50 futures pointed 0.78% higher ahead of Europe’s open.
Why It Matters?
The shape of the bounce is telling. Nasdaq-100 futures are rising more than twice as fast as S&P 500 futures, which suggests investors are still willing to buy beaten-down tech even as the rate outlook darkens. But that dip-buying is running into a Fed that markets now expect to tighten, and Rieder’s comment shifts the debate from whether the Fed hikes to how much. With the Nasdaq Composite below its 50-day and 200-day averages, a single strong session would not repair the trend, and Nvidia’s headline risk remains a drag on the tech complex.
What’s Next?
Traders will keep their eyes on the AI trade after CoreWeave reported third-quarter revenue that beat analyst expectations, a report that initially sent the neocloud stock slightly higher. The U.S. bond market is closed on Wednesday for Veterans Day, so the next read on rate expectations will come from futures and Fed commentary rather than cash Treasurys. Watch whether Nvidia can stabilize after its two-day slide and whether the Nasdaq can reclaim its moving averages.
Affected Tickers and Coins: SPY, QQQ, DIA, NVDA, CRWV, TSM
Source: CNBC
