U.S. stocks drop as Nvidia, Meta fall

U.S. stocks reversed early gains to close firmly lower as cautious investors weighed new economic data. Nvidia retreated from its record close despite the company’s significant artificial intelligence plans. The S&P 500 fell over 1.1%, while the tech-heavy Nasdaq Composite lost roughly 1.9%.

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Tune in as @nikunjdalmia breaks down the global cues shaping market sentiment!#US #Dollar #Nvidia #TechStocks #StockMarket pic.twitter.com/ObEGArAGHF

— ET NOW (@ETNOWlive) January 8, 2025

The Dow Jones Industrial Average ended the session down about 0.4%. Meanwhile, the 10-year Treasury yield added roughly 7 basis points to hover just below 4.7%. Bets on when the Federal Reserve will next cut interest rates were pushed back as well.

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— ET NOW (@ETNOWlive) January 8, 2025

Nvidia $NVDA was the worst performing stock in the Dow Jones today 📉 pic.twitter.com/q4fi5GKM6S

— Barchart (@Barchart) January 7, 2025

Earlier on Tuesday, the Institute for Supply Management indicated the service sector continued to expand last month, although the prices paid index jumped to a nearly two-year high. The surge in prices is a concern for the Federal Reserve. “This serves as a good reminder that the Fed’s fight against inflation is not over,” said Thomas Ryan, economist at Capital Economics North America. Additionally, job openings in November showed fewer hires compared to the previous month, with the quits rate—a sign of confidence among workers—falling to 1.9% from 2.1% in October. Investors are now betting with almost certainty that the Federal Reserve will keep interest rates unchanged later this month.

U.S. stocks fall amid economic concerns

Nvidia shares reversed gains to fall over 6% after hitting a record close just one day prior, making it the Dow’s worst performer of the session. Meta shares fell nearly 2% on Tuesday after CEO Mark Zuckerberg announced an end to the company’s third-party fact-checking program. Originally designed to curb misinformation, the program will now be replaced by a user-driven model similar to X’s Community Notes. “Fact-checkers have just been too politically biased and have destroyed more trust than they have created,” said Zuckerberg. Shares of AI software firm Palantir Technologies fell more than 6% after Morgan Stanley analyst Sanjit Singh set his 12-month price target for the stock at $60, implying shares could drop another 15%. Even with Tuesday’s decline, Palantir shares have rallied over 340% over the past year, driven by a surge in AI technology demand. The stock was added to the S&P 500 in September. Bitcoin fell below the critical $100,000 mark on Tuesday, echoing broader market losses as better-than-expected economic data sparked fears of an inflation resurgence. In mid-afternoon trade, the largest cryptocurrency traded around $97,000 a token after prices on Monday topped $100,000 for the first time since Dec. 19. Smaller cryptocurrencies like Ethereum also saw declines, trading above $3,400 a coin.