US stocks experienced a big drop on Monday, with the S&P 500 and Nasdaq reversing beneath a major technical indicator for the first time since April, as investors anticipate quarterly results from retailers and chip giant Nvidia and await the long-awaited US jobs report this week.
Afternoon trading accelerated the pace of losses, with all three major indexes trading below 50-day moving averages. This closely related moving average is regarded as a proxy for the intermediate-term trend.
This week, the results will witness the biggest retailers, Walmart, Home Depot, and Target will complete the quarterly earnings season.
Home Depot shares, which will report before the bell on Tuesday, ended at a loss. Those investors were also looking forward to the September jobs report that is set to be released on Thursday, following the long US government shutdown that ended last week.
Chief Executive of 50 Park Investments in New York, Adam Sarhan, noted in the matter stated that investors are waiting for two big things: “a look at the consumer … and Nvidia’s earnings. You have a consumer that is potentially getting weaker, not stronger.”
He also said, “We have got the market consolidating a very big rally from the April low.”
The world’s biggest company by market value, Nvidia, which is at the center of the artificial intelligence trade on Wall Street, is expected to report after the bell on Wednesday.
Its shares dropped on Monday and were one of the largest drags on the Nasdaq and S&P 500. The issues that have been mounting this month have been that stocks are under pressure because of the fact that AI exuberance has pushed their valuations to unreasonable amounts.
Preliminary data indicated that the S&P 500 declined 61.44 points, or 0.90 percent, to end at 6,672.67 points; therefore, the Nasdaq Composite fell 189.01 points, or 0.82 percent, to 22,710.70. However, the Dow Jones Industrial Average dropped 554.34 points, or 1.18 percent, to 46,592.91.
Google’s parent company, Alphabet, was one of the gainers of the day as it climbed to a record after Berkshire Hathaway disclosed a stake in the company worth US$4.3 billion.
Berkshire also decreased its stake in Apple, whose stock dropped to a lower level on Monday.
Among the declining shares, Dell Technologies fell after Morgan Stanley lowered its rating on the AI server maker to “underweight” from “overweight.”
Investors also absorbed perceptions on stock prospects in the coming year. Brokerage Morgan Stanley predicts US shares to do better than their counterparts and favors global equities as compared to credit and government bonds.
