Market Retreats as Nvidia Cools Off, Dow Marks Its Worst Week Since Autumn

Vida Markets

Monday 11th March 2024, 10:03 am Time to read: 6 mins.

This past week, the stock market experienced a notable shift in momentum, transitioning from its recent highs to a more passive stance. The spotlight was on the Nasdaq Composite as it felt the impact of Nvidia's slowdown, marking a significant moment of pause for the tech giant. Meanwhile, the Dow Jones Industrial Average ended the

This past week, the stock market experienced a notable shift in momentum, transitioning from its recent highs to a more passive stance. The spotlight was on the Nasdaq Composite as it felt the impact of Nvidia's slowdown, marking a significant moment of pause for the tech giant. Meanwhile, the Dow Jones Industrial Average ended the week with its most significant downturn since the previous fall, and the S&P 500 also saw a retreat. This change of pace reflects a broader market sentiment that switches between hope and caution. Investors are recalibrating their expectations against a backdrop of evolving tech valuations and economic indicators, signalling a period of reassessment and cautious navigation through the markets' crossroads.

Key Takeaways:

Nasdaq Feels the Nvidia Chill: The Nasdaq Composite fell by 1.16% to close at 16,085.11, reversing gains after touching new highs earlier in the session. This downturn was led by a significant 5% drop in Nvidia, marking its sharpest decline since late May, despite the stock ending the week up by over 6% amid its meteoric rise throughout the year.
Dow Records Its Worst Week Since October: The Dow Jones Industrial Average shed 68.66 points, or 0.18%, finishing at 38,722.69. Over the week, the Dow faced a 0.93% decline, its most substantial weekly loss in months, highlighting investor caution amid a volatile market environment.
S&P 500 Takes a Step Back: The S&P 500 dropped 0.65% to close at 5,123.69, reflecting broader market hesitancy. This week's 0.26% pullback from earlier highs indicates a cautious re-evaluation of the market's recent bullish run.
Mixed Labor Market Signals: February's job additions soared to 275,000, surpassing expectations of 198,000. However, the unemployment rate edged up to 3.9%, with wage growth showing signs of cooling, offering a mixed bag for investors gauging the Fed's next moves.
European Markets Waver Amid Economic Data: European stocks showed mixed reactions, with the Stoxx 600 inching up 0.03%. This came as investors digested the ECB's revised inflation projections and the mixed US job report, with tech stocks falling by 1.5% but financial services climbing 1%.
Asia-Pacific Markets Respond to Fed's Rate Cut Hints: Asian markets ended higher, pushed by Federal Reserve Chair Jerome Powell's comments suggesting that rate cuts could be on the horizon, pending inflation trends. This optimism led the S&P/ASX 200 to hit a record high, up by 1.07%.
Cryptocurrency Volatility Peaks: Bitcoin broke through the $70,000 barrier, setting a new record before experiencing a pullback. This week's price movements highlight the cryptocurrency's heightened volatility, even as it captures investor interest amidst broader market uncertainties.
Oil Prices Reflect Demand Concerns: Crude oil futures closed the week lower, with US WTI dropping 1.2% to $78.01 a barrel, and Brent crude falling 1.1% to $82.08 a barrel. Weak demand from China and a well-supplied market contributed to the sector's downturn.

FX Today:

EUR/USD Reacts to Mixed Jobs Data: The pair experienced fluctuations within a tight range, reflecting the market's digestion of the US jobs report's mixed signals. Initially, it showed resilience, nudging slightly upward from 1.0692, a position it had previously retreated to, emboldened by the comprehensive job growth figures. However, the uptick in unemployment to 3.9% seemed to have tempered bullish momentum, leaving the pair navigating cautiously around the 1.07 mark, reflecting the broader uncertainty in the market.
GBP/USD Amid Fiscal Anticipation: The British Pound showcased a notable restraint against the Dollar, maintaining levels around 1.2700, in anticipation of the upcoming Spring Budget. The currency pair's movements were confined within a narrow band, as investors weighed the potential impact of fiscal policy announcements on the UK's economic trajectory.
USD/JPY Adjusts to BoJ Speculations: The Yen saw a modest depreciation against the Dollar, closing around 147.85, amidst growing speculation over the Bank of Japan's stance on negative interest rates. Investors keenly adjusted their positions in light of potential policy shifts, with an eye on the critical resistance levels, pondering over Japan's economic indicators and their implications on inflation and wage growth.
USD/CAD Finds Equilibrium Post-NFP Volatility: The Canadian Dollar saw a rollercoaster ride, briefly touching 1.3420 against the Dollar following the NFP release, before stabilizing around 1.3475. The fluctuations underscore the currency pair's sensitivity to North American economic indicators, with traders closely monitoring the balance between the USD's strength and oil price movements, a key export commodity for Canada.
Gold's Rally Amid Dollar Dynamics: In a direct response to the nuanced shifts in the job market and its potential implications on Federal Reserve policy, Gold prices surged, reaching new heights at $2,170 per ounce. The precious metal's ascent reflected growing investor appetite for safe-haven assets amid the currency market's uncertainty, marking a significant weekly percentage increase since mid-October.
Market Movers:

Broadcom (AVGO) Sees Drop After Earnings Announcement: Shares of Broadcom declined more than 6% following its disclosure of Q1 semiconductor solutions revenue of $7.39 billion, missing the anticipated $7.70 billion. The revenue miss indicates potential challenges in the semiconductor industry, despite ongoing demands for tech innovation.
Costco Wholesale (COST) Takes a Dip: Costco's shares faced a downturn, closing more than 7% lower, as its Q2 revenue of $58.44 billion fell short of market expectations set at $59.04 billion. The shortfall underscored the challenges even dominant retailers face in navigating current economic headwinds.
Marvell Technology (MRVL) Witnesses Sharp Decline: The semiconductor company's stock plummeted over 11% after projecting Q1 net revenue at $1.15 billion, considerably below the consensus estimate of $1.37 billion. This forecast adjustment reflects the broader pressures within the tech sector, particularly in semiconductor demand and supply dynamics.
MongoDB (MDB) Underperforms on Future Earnings Guidance: The database platform's stock retreated more than 6% after setting its 2025 adjusted EPS guidance range at $2.27-$2.49, significantly below the analyst consensus of $3.53. This projection dampened investor sentiment around the company's growth trajectory.
Amylyx Pharmaceuticals (AMLX) Plummets on Study Results: The biopharmaceutical company's shares nosedived more than 82% after its ALS treatment study failed to meet primary or secondary endpoints, starkly underscoring the inherent risks within biotech investment landscapes.
Boeing (BA) Faces Setback Over Runway Incident: Boeing's stock edged down more than 2% as the FAA launched an investigation into a 737 Max 8 jet incident, highlighting ongoing challenges in regaining public and investor confidence in its aircraft.
Eli Lilly (LLY) Drops Amid Regulatory Delays: Shares of Eli Lilly declined more than 2% after the FDA announced a planned advisory panel hearing for its Alzheimer's disease drug, signalling potential delays in the drug's market entry and impacting investor confidence.
The Gap (GPS) and Carvana (CVNA) Make Gains: The Gap's shares surged more than 8% on stronger-than-expected Q4 net sales, and Carvana's stock jumped over 7% following an upgrade from RBC Capital Markets, highlighting potential rebounds in both the retail and online car sales sectors.
Cruise Line Stocks Rally on Positive Outlook: Carnival (CCL), Royal Caribbean (RCL), and Norwegian Cruise Line (NCLH) saw their stocks climb more than 4%, 2%, and 1% respectively, after upbeat commentary from Stifel about the sector's recovery prospects, underscoring a bright spot in the travel and leisure segment.
While stocks took a breather on Friday, with the Nasdaq and S&P 500 retreating from recent record highs, the overall market sentiment remained upbeat. The pullback was largely thanks to profit-taking in the technology sector's blistering rally, led by AI giant Nvidia. However, indications of cooling inflation and comments from Fed Chair Powell hinting at potential future rate cuts provided a supportive backdrop. As investors digested the mixed signals from the latest jobs report, currencies and commodities saw significant movements, with the US dollar dipping and bitcoin smashing records while gold rallied to new highs. Looking ahead, the market's focus will likely remain on economic data, central bank policy shifts, and the sustained strength of the AI and tech boom driving market optimism.


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