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Nvidia falls for third day, S&P 500 follows: Market Takeaway

The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) fell from their record highs seen last week as Nvidia (NVDA) sank for its third session in a row, losing over 6% for the day. With Nvidia and other tech giants, holding much of the weight of the S&P, what does this mean for the future of the index?

Yahoo Finance Markets Reporter Josh Schafer joins Market Domination Overtime to break down the top market takeaways for the trading day on June 24.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Nicholas Jacobino

Video transcript

Nvidia's continued slide, dragging on the NASDAQ to start the final trading week of June and the final trading week of the quarter.

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By the way, Yahoo Finance's Josh Schafer is joining us now with more on the trading day takeaways.

NVIDIA definitely a big part of the takeaways today, NVIDIA falling over 6% and I don't think it's a surprise when you see that, that you see the S and P 500 the NASDAQ also fall from their record highs and slip a little bit because we really saw you guys were looking at this earlier, Jared today, you saw decent participation sort of across the market and some sectors certainly did well.

But when you consider Nvidia's weight in the S and P 500 also sort of the sentiment it has within the tech sector and within the chip space when that stock goes down, it's just not surprising to see the market wag on a day like that.

Uh Blackrock had an interesting note out today, sort of highlighting a chart that we've seen quite a bit over the last year, but sort of how tech has had an outsized per performance drag up the S and P 500.

So what, what you're looking at here in purple is S and P 500.

Tech sector.

Light blue is the S and P 500 yellow is when you take tech out.

So if you took tech out, you wouldn't have a lot of the gains over the last year.

But on days like today when tech does fall and the large stock, like in video falls, it sort of serves the other way.

It was interesting blackrock highlighted today that they're still overweight us tech stocks and the large take away from that was because they still believe in the A I trade and they feel like the overweighting of the A I trade is more of a feature, not a bug of the current bull market.

It is a huge r just to see like whether that kind of like as we were talking earlier, the show, the baton can get handed off from NVIDIA.

I mean, it's, it is interesting, NVIDIA come under pressure like this, but it's not like the market falls apart.

I mean, it hangs in there.

Yeah.

No, you saw signs of the broadening of that rally today, right?

When you look at sort of the rest of the sectors and what was to upper form, you look at something like the equal weight index for the S and P 500.

So that doesn't overweight NVIDIA in the same way, the cap weight index does.

The equal weight was up today.

It was up almost 0.7%.

The Russell 2000 and sort of a different index that's looking at smaller cap stocks was also up today.

So you saw some participation.

But I do think it is a reminder of though Josh is with how big the big tech stocks are.

Yes, we've talked about how this rally could broaden but it would be a lot slower of a chug higher.

If you don't have the mega caps helping you out.

When you take the mega caps out, you need other stocks to perform significantly better in order to get there.

It was interesting today, uh Morgan Stanley's, Mike Wilson was highlighting that he just doesn't see the transition to a full broadening really set right now and he highlighted something that a lot of people were talking about the start of the year.

Remember when we were talking about the broadening and seemed like everyone that came on the show talking about the broadening that we're gonna see in 2024.

1 of the base cases of that was sort of this economic resilience and economic data continuing to come in better than expected.

Well, now we're about six months into the year, like Julie just said, and when you look at something like the city Economic Surprise Index, which tells you how economic data is coming in versus expectations, it's been going down pretty much all year So if your base case was, we're gonna have a broadening because data is continuing to come in better than we thought.

That's not really what's happened thus far.

And so if that was one of your pillars, you're kind of losing that pillar.

And so maybe it's harder to reason why a broadening should come.

It's so tricky with that with those economic surprise indexes though, because for so long, economic data was surprising to the upside.

So you could argue that economists said just shifted the expectations, you know, we've been burned too many times.

And so now then you're disappointing.

But yes, I mean, a lot of economists are talking about that the data has even leaving out the surprise part of it that things are getting a little bit worse and there are some vulnerabilities there which you could argue, could also argue for broadening in some ways, right?

If you, if some of those, because then you get cuts because then you get cuts and some of the other groups if, if you take away, I don't know, there are groups that perform better from a defensive posture that haven't necessarily participated.

I don't know, Mike Wilson likes health care.

So there you go.

But that would be sort of one of the players you're mentioning, I think right to that extent would be maybe OK, things are slowing down.

But you said some people that's he likes it.

I've seen that health care is almost like some, I just talk about, I don't know if Mike Wilson does but I'm saying some thinking of almost like utilities they see as Iron Man, I, I was gonna say both sides of the ball, just like Josh, in high school football, both sides of the ball.

Was it Michael Cant?

Was, was one of, I think utilities was the one that also he talked about.

But, yeah, a I, and then also a defensive play, I mean, it's hard.

Yeah.

Maybe.

Exactly.