why is the stock market down today: Stock market today: S&P 500, Dow, Nasdaq dip as AI stocks fall ahead of key economic data – Broadcom and Oracle lead losses
US Stock Market Today: Broadcom and Oracle Lead Losses in the AI Sector
AI stocks were a major drag on the market. Broadcom and Oracle, two companies moving away from AI last week, fell more than 5% and 2%, respectively, while Microsoft and other tech giants also saw declines, according to the report.
Investors Shift to Consumer Discretionary Services, Industrials, and Healthcare
Meanwhile, investors have shifted to sectors more sensitive to economic trends, including consumer discretionary and industrial sectors, and added healthcare stocks to their portfolios, according to the CNBC report.
Weekly Performance: S&P 500 and Nasdaq Fall, Dow Gains
Last week was a mixed week in terms of criteria. While the S&P 500 and Nasdaq closed lower, the Dow, which is less exposed to technology and artificial intelligence, rose. According to the CNBC report, Oracle lost 12.7% in the weekly period, Broadcom lost more than 7% and the S&P 500 technology sector fell 2.3%.
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US Stock Market Outlook: AI Trading Pullbacks Are Normal, Seven Leading Markets Are Spectacular
“Everyone seems to hate AI trading right now. There’s no doubt about that,” David Wagner, head of equities at Aptus Capital Advisors, told CNBC, adding, “But I see the market continuing to be driven by concentration in the market, like the Magnificent Seven names, because of the core tenants that I think the market continues to undervalue.” [which] As stated in the report, it is the operating leverage that these companies have.
“As long as you get some sort of revenue growth, these guys will continue to expand their margins and enjoy strong returns next year,” he also said, as quoted by CNBC.
This Week’s Key US Economic Reports: Nonfarm Payrolls, Retail Sales, CPI
This week, investors will focus on important economic reports. November nonfarm payrolls data and October retail sales figures are due out Tuesday after being delayed by the fall U.S. government shutdown. Economists surveyed by FactSet expect November payrolls to show an increase of 40,000 jobs, up from 119,000 in September. The consumer price index for November will be announced later in the week.
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Analyst Warns AI Trading Looks ‘Toppy’
Some analysts are signaling caution is needed for AI stocks, too. BTIG chief market technician Jonathan Krinsky said AI trading “seems choppy,” adding, “It’s hard to say it’s a ‘top,’ but from a medium-term perspective, AI Basket has hit ‘lower lows’ and ‘lower highs’ over the last few months,” adding, “This is a harbinger of a process leading to a top,” as quoted by CNBC.
What Motivates the Stock Market Today
Despite the volatility, 12 S&P 500 stocks reached all-time highs, including General Motors, Ralph Lauren, Tapestry, Walmart, Assurant, Bank of America, Chubb, JPMorgan, Wells Fargo, Johnson & Johnson, Delta Air Lines and Raytheon Technologies, according to a CNBC report on Monday.
At the same time, six stocks traded at 52-week lows: Trade Desk, Costco, Texas Pacific Land, Motorola Solutions, Tyler Technologies and CoStar Group, according to the report.
FAQ
Why did the stock market struggle on Monday?
AI-focused stocks faced losses, dragging the S&P 500 and Nasdaq lower.
What important economic reports will be published this week?
November non-farm employment data, October retail sales and November consumer price index.
