U.S. indices went negative, pressured by a selloff in Nvidia and other tech giants

The U.S. stock market on Monday, November 17, went into negative territory, having been under pressure from the sell-off of shares of technology companies. More than 400 companies in the S&P 500 fell in price, Bloomberg reports. The S&P 500 and Nasdaq Composite indices ended trading at their lowest levels for the last month, MarketWatch notes.

Investors are expecting several key events of the week - the publication of Nvidia's quarterly results and the employment report for September, which was not released on time due to the shutdown. The market is anxiously watching the securities of AI-related companies, fearing that their revaluation may lead to a broader sell-off, CNBC explains.

- The Dow Jones Industrial Average blue-chip index fell by 1.2% on November 17. The most noticeable pressure on it was exerted by the securities of Nvidia, Salesforce and Apple, which fell in price by 1.9%, 2.7% and 1.8%, respectively. Investors sold off shares of the leading chipmaker ahead of its quarterly report, which will be published on Wednesday, November 19. In addition, following SoftBank, which sold its entire $5.8 billion stake in Nvidia in the third quarter, one of the wealthiest men in the U.S., Peter Thiel, said Monday he did the same.

- The S&P 500 broad market index fell 0.9%. It has lost almost 3% since the beginning of November and 4% from the recent all-time high.

- The index of the technology sector Nasdaq Composite sagged by 0.8%. Since the beginning of the month, the losses amount to almost 6%, which makes it an outsider among the three major indices of the U.S. market, notes CNBC. At the same time, a rare positive signal amid the general correction in the AI sector was the disclosure of Berkshire Hathaway Warren Buffett's Berkshire Hathaway stake in Alphabet. The tech giant's securities hit a record high during the session and ended the trading day more expensive by almost 3%.

- Bitcoin continued its decline: quotes have fallen below $92,000, data from crypto exchange Binance show. During the day, the value of the token decreased by almost 2%. Ethereum lost about the same amount, at the moment it was trading cheaper than $3000, but then the price corrected upwards. Bitcoin's movement is a leading indicator for trends in the U.S. stock market, eToro analyst Bret Kenwell told CNBC. He admitted that if the decline intensifies, it will put pressure on other risk assets as well.

Investors are wary of a "slightly moderate outlook" from Nvidia, according to Baird strategist Ross Mayfield, whose opinion is quoted by CNBC. Even a hint of weakening, he said, could trigger a negative reaction from the market, which needs to get a signal that demand for AI chips remains strong. If the company does not demonstrate additional confidence in its prospects, the question remains what will be the return on investment for players who bought up all these processors, explains the analyst.

Following Nvidia - on Thursday - the largest U.S. retailer Walmart will report its financial results. This report will allow investors to understand how confident the American consumer feels, CNBC points out. "In the absence of fresh labor market data, consumer stocks are the key indicators of holiday sentiment," Mayfield explained to the channel.

Simultaneously on Thursday, the September nonfarm payroll employment report will be released. It will be the first after a break in the publication of a number of data caused by the US government shutdown. Along with this, investors are waiting for the publication of the minutes of the October meeting of the Federal Reserve - they may shed light on the mood of the regulator, especially in the vacuum of statistics, which will remain for several weeks, while the agencies are preparing missed reports, the channel notes. At the same time, the market expects less and less for a rate cut in December. The probability of such a move is estimated at about 40% versus 90% a month ago, according to the CME FedWatch tool.

"Usually the monthly jobs report sets the tone for the week's entire economic agenda, but as AI-related stocks have struggled of late, Nvidia's financial results look to be a key piece in the puzzle of market momentum," Morgan Stanley's Chris Larkin explained to Bloomberg.

U.S. stocks could return to growth before the end of the year despite recent pressure, according to Canaccord Genuity analyst Michael Graham. "We still see a balance between bullish and bearish signals, but maintain the view that a year-end rally is likely," he predicts. According to the analyst, the accelerated release of macroeconomic statistics after the U.S. government reopens could add volatility, but factors such as strong reporting and seasonality play in the market's favor. November and December are historically strong months, and the current position of the S&P 500 index slightly below the record "gives room for the realization of the seasonal effect," the analyst expects.

Despite talk of a possible bubble in AI stocks, HSBC sees no serious cause for concern, CNBC writes. "In our view, the likelihood of an accelerated rally towards the end of the year is now much higher," said strategist Max Kettner. He notes that mentions of staff layoffs during conference calls since the reports were published have tapered off, and so far the analyst is not picking up signs that the proliferation of AI is leading to mass employee layoffs. The rise in investments in money market funds, on the other hand, suggests investors are overly cautious and are perceived as a counter-signal in favor of buying risky assets, Kettner noted.

Aaron Norwick, an equity strategist at UBS, believes that the S&P 500 index will rise above the 7,000-point mark before the end of the year, Bloomberg reports. This implies a growth of about 5% relative to the closing level on November 17. The analyst advised to use any market pullbacks for purchases. According to him, the strategy "buy in November" - that is, for the next six months until April - shows particularly strong returns in years when the period from Ma to October, contrary to the reputation of a weak season, shows strong growth, as it happened this year. Since 1950, the average rise in the index in such cases has been 7.3% in the last two months of the year.

This article was AI-translated and verified by a human editor