4:13pm: Nvidia probe, CPI expectations weigh on sentiment
US stocks closed lower on Monday, weighed down by a drop in Nvidia shares amid a Chinese antitrust investigation and investor caution ahead of a key inflation report.
The Dow fell 0.5% to close at 44,402, marking a subdued start to the week after its recent losing streak. The S&P 500 dropped 0.6% to 6,053, while the tech-heavy Nasdaq also slid 0.6%, ending at 19,737.
Shares of Nvidia, a leader in the artificial intelligence chip market, finished 2.6% lower following reports of an antitrust probe by Chinese regulators.
Investors are now turning their attention to the November Consumer Price Index (CPI) report, due Wednesday, which is expected to be a critical data point ahead of the Federal Reserve’s final interest rate decision of the year. The inflation reading will follow a November jobs report that left intact widespread expectations for a quarter-point rate cut on December 18.
Wall Street will closely analyze the inflation numbers for clues on the Fed's monetary policy trajectory, with any surprises likely to drive market volatility in the coming days.
3:10pm: M&A truths and rumors
The week is starting off with some big M&A activity.
Omnicom and Interpublic (IPG) have agreed on a $30 billion mega-merger to overthrow WPP PLC (LSE:WPP) (WPP PLC (LSE:WPP)) as the largest advertising firm in the world.
First rumoured in a Financial Times article on Monday morning, Omnicom confirmed the merger in a subsequent press release.
According to one industry insider, IPG had been up for sale for a while, with French heavyweight Publicis initially rumoured to be the suitor.
Confirmation that US giant Omnicom was the actual buyer came as a surprise, but it nonetheless represents a stellar move that is expected to have a profound impact on the global advertising sector.
And in rumored deals, shares of Hershey Company jumped nearly 19% on Monday following a report that Cadbury-maker Mondelez International is exploring a potential acquisition of the chocolate giant that, if successful, would create one of the world’s largest confectionery companies.
Bloomberg News, citing people familiar with the matter, reported that Mondelez has made a preliminary approach about a possible combination.
The talks are reportedly in early stages, with no certainty that they will lead to a deal.
2:00pm: A look at the week ahead
The spotlight will be on inflation as US markets navigate a relatively light economic calendar this week.
Key data releases on the Consumer Price Index (CPI) on Wednesday and the Producer Price Index (PPI) on Thursday are expected to influence both investor sentiment and the Federal Reserve's policy decisions ahead of its December 18 meeting.
The inflation data this week will be pivotal. Deutsche Bank forecasts November's headline CPI to rise 0.3%, driven by increases in food and energy prices, while core CPI is expected to rise 0.27%. If these projections hold, the year-over-year headline inflation rate would round up to 2.8%, with core inflation steady at 3.3%.
The PPI report on Thursday will provide further insights into categories that influence the core Personal Consumption Expenditures (PCE) index, the Fed's preferred inflation gauge. Deutsche Bank projects a 0.18% gain in November's core PCE index, factoring in October’s decline in asset prices.
1:00pm: Tech troubles weigh
US stock markets are experiencing a downturn across major indices as of midday trading on Monday.
The Dow Jones is down 0.3%, the S&P 500 has fallen 0.5%, and the Nasdaq has dropped 0.5%,
This pullback comes after the S&P 500 recently set its 57th all-time high of the year.
The market's retreat is partly attributed to a 3.4% drop in Nvidia's stock, following news of a Chinese investigation into the company over suspected anti-monopoly law violations. The technology sector, which has been a strong performer recently, is facing some pressure today.
Investors are also digesting recent economic data, including the November jobs report and consumer sentiment figures, which have implications for potential Federal Reserve rate decisions.
11:55pm: US markets drift lower
The week has begun with US markets shedding some ground after the record highs of last week, IG's Chris Beauchamp noted.
"The mid-December lull seems poised to descend, and a combination of fading volume, this week’s CPI print and next week’s Fed decision means that a further trimming of gains over the next week or so is highly likely," the analyst wrote.
11:05am: Workday, Apollo Global get S&P inclusion
Workday Inc (NASDAQ:WDAY) (Workday Inc (NASDAQ:WDAY)) shares added almost 6% on Monday morning at about $282 after it was announced the software firm will join the S&P 500.
The company will join the index ahead of the start of trading on Monday, December 23, as part of its quarterly rebalance.
Workday, founded in 2005, reported a quarterly profit of $193 million on revenue of $2.16 billion in November, up 16% year-over-year. It expects 14% revenue growth in fiscal 2026.
Also joining the S&P 500 is Apollo Global Management (NYSE:APO) (Apollo Global Management (NYSE:APO)), which traded 1.4% higher on the news.
Workday and Apollo replace Qorvo and Amentum, which will be moving to the S&P SmallCap 600.
9.43am: Nasdaq, S&P 500 drop early on as Dow gains
Wall Street got off to a mixed start to the week on Monday as the S&P 500 and Nasdaq headed lower in early trading.
The Nasdaq dropped 0.2% as trading got underway, while the S&P 500 fell by 0.1% and the Dow Jones moved just above the mark.
Nvidia Corp was among those weighing early on, as shares in the chip-making giant dropped 2.9% on news of an anti-monopoly investigation by China.
Omnicom Group Inc (NYSE:OMC) fell by 6.1%, despite firming up plans to create an advertising powerhouse with revenue of almost $26 billion through the takeover of Interpublic Group.
Temu owner PDD Holdings Inc (NASDAQ:PDD) surged 11% in the meantime after fresh pledges from China for stimulus measures to prop up the world’s struggling second-largest economy.
8.50am: Nvidia drops as China launches anti-monopoly probe
Nvidia Crop shares dipped 2.3% ahead of Monday's trading as China hit the chip-making giant with a probe over suspected anti-monopoly law breaches.
China’s State Administration for Market Regulation did not elaborate on the potential breaches, but said Nvidia was also suspected of violating commitments made in 2020 during its acquisition of Mellanox Technologies Ltd.
Beijing unveiled the investigation days after US president Joe Biden’s administration launched its third crackdown on China’s semiconductor industry in as many years.
"This isn’t just a regulatory issue; it’s a calculated geopolitical manoeuvre," Nigel Green, head of investment firm deVere Group, said.
"China is sending a strong message that it won’t hesitate to push back, and Nvidia’s targeting is a harbinger of more aggressive measures to come"... Read more
7.20am: Mixed start seen on Wall Street
Wall Street was braced for a mixed start to the week, with futures pointing to a gain for the Dow Jones, but declines for the S&P 500 and Nasdaq.
Ahead of Monday’s opening bell, the Dow Jones was seen just above the mark, while the Nasdaq looked set to drop by 0.2% as the S&P 500 dipped 0.1%.
The Dow had fallen over the course of last week, including on Friday when non-farm payroll data showed the addition of 227,000 jobs across the US economy in November.
Despite beating expectations, markets upped bets on the Federal Reserve cutting interest rates later in the month, leaving attention on this Wednesday’s consumer price index reading.
“[This] should clinch the deal providing that there are no shocks to the consensus,” interactive investor analyst Richard Hunter said, with markets anticipating inflation at 2.7%.