4:20pm: Tech selloff
Tech once again led the stock retreat into the deep red, with investors digesting fresh economic data and what it could mean for the Federal Reserve’s next move on interest rates.
The Nasdaq took the biggest hit, sliding 1.8% to 22,693, while the S&P 500 fell 1.2% to 6,721. The Dow Jones was more resilient but still ended down 0.5% at 47,886, and the Russell 2000 slipped 1.1% to 2,492.
Technology stocks were under pressure after Oracle shares tumbled nearly 6%, weighed down by worries over funding tied to its artificial intelligence ambitions. The weakness spilled across the sector, with Nvidia dropping almost 4%, Broadcom sinking more than 4%, and Alphabet sliding over 3%.
Investors are also looking ahead to Micron’s earnings, due after the closing bell, for further clues on demand trends in the semiconductor space.
Away from equities, money flowed into traditional safe havens. Gold edged closer to a record high, extending its year-to-date gains to more than 60%, while silver jumped 5% to trade above $66 an ounce, highlighting lingering caution in the broader market.
3:45pm: Proactive news headlines
- Plurilock Security Inc (TSX-V:PLUR, OTCQB:PLCKF) signed a two-year, C$2.45 million software licensing deal with a Nasdaq-listed semiconductor manufacturer to deploy its insider-risk cybersecurity solution.
- NanoViricides (NYSE-A:NNVC) is advancing its broad-spectrum antiviral NV-378 into Phase 2 trials next year, with Alliance Global Partners initiating coverage at Buy and a $6 price target.
- Tiziana Life Sciences Ltd (NASDAQ:TLSA) dosed the first patient in a Phase 2 trial of its intranasal drug foralumab for early Alzheimer’s disease, testing it alone and in combination with approved anti-amyloid therapies.
- 1911 Gold Corp (TSX-V:AUMB, OTCQB:AUMBF) launched a 2,200-metre diamond drilling program at its Ogama-Rockland gold deposit in Manitoba to expand and confirm high-grade gold resources near its True North project.
- Protalix Biotherapeutics Inc (NYSE-A:PLX) entered a collaboration and option agreement with Secarna Pharmaceuticals to co-develop antisense oligonucleotide therapies for rare kidney diseases.
2:50pm: Market movers
- Coursera said it has agreed to merge with rival Udemy in an all-stock deal valued at about $2.5 billion, sending Udemy shares sharply higher and lifting Coursera stock modestly.
- Oracle shares slid nearly 6% after a report said plans for a $10 billion Michigan data center are in doubt following Blue Owl Capital’s decision not to back the project, casting uncertainty over a key AI infrastructure expansion.
2:00pm: Medline shares pop in IPO
Medline Industries Inc, a Northfield, Illinois-based medical supplies company, saw its shares jump 20% in a blockbuster initial public offering on Wednesday, marking one of the largest healthcare IPOs in recent years.
The company priced 216 million shares at $29 each, the top of its marketed range, raising significant capital from investors including private equity backers Blackstone Group and Carlyle Group, which had invested $34 billion in Medline in 2021.
Nasdaq-listed shares opened at $35 and rose toward $36 in early trading.
1:20pm: Chipmakers weigh on stocks
The Nasdaq continued to sink in early afternoon trading as AI chip stocks weighed on the tech-heavy index.
Just after 1pm ET, the Nasdaq was down 1.2%, leading broader market declines.
The Dow was in the red by 0.3% while the S&P 500 was off by 0.8%.
12:25pm: Oracle slides again
Oracle Corp (NYSE:ORCL, XETRA:ORC) shares fell almost 6% on Wednesday morning after the Financial Times reported that its plans for a $10 billion data center in Michigan have been thrown into uncertainty after Blue Owl Capital, its largest data center investment partner, decided not to back the project.
The proposed facility, a 1-gigawatt data center in Saline Township, Michigan, was intended to support OpenAI and Oracle’s broader push to expand artificial intelligence infrastructure.
According to the FT, Blue Owl’s withdrawal has created a funding gap and placed the project’s financing structure in question.
11:35am: Nasdaq sinks lower
Wall Street stumbled on Wednesday morning, with tech stocks taking the brunt of the selling.
Nvidia and Alphabet led the losses as fresh worries about AI spooked investors just as the Santa rally was supposed to get rolling.
“Concerns about AI have reared their head again, weighing on sentiment just as the Santa rally was meant to get underway,” said Chris Beauchamp, chief market analyst at IG.
Meanwhile, Netflix shares rallied following reports that Warner Bros plans to join forces with the streaming giant.
“While a hefty price tag, the news promises to expand Netflix’s vital content library, an essential tool in the battle to keep existing and attract new subscribers,” Beauchamp added.
“Having recently fallen to an eight-month low, the shares look much cheaper compared to their summer highs, providing a nice contrast to the AI trade where overvaluation fears remain high.”
10:50am: Fed’s Waller signals room for rate cuts
Federal Reserve Governor Christopher Waller said Wednesday the central bank still has room to cut interest rates to return policy to a neutral level, though he stressed there’s no urgency to act quickly.
Speaking at the Yale School of Management CEO Summit in New York, Waller said the Fed may be “50 to 100 basis points off of neutral” and can “steadily…bring the policy rate down towards neutral” as inflation moderates and the job market softens.
On the hot topic of artificial intelligence, Waller downplayed bubble concerns, noting that most AI deals involve mezzanine or top-tranche debt, meaning banks would only face losses after equity and junior debt are wiped out.
9.55am: Nasdaq drops, Dow opens higher
Wall Street has not started as confidently, with most stocks trading in the green for only a matter of seconds and now on the slide.
The S&P 500 has dropped 0.2% and the tech-heavy Nasdaq is down 0.3%.
Going against the grain are the Dow Jones, up 0.3%, and the Russell 2000, up 0.4%.
Nvidia is down 2.3% and Alphabet is 1.1% lower, creating a heavy drag. Netflix is higher, after Warner Bros backed its merger.
Lifting the Dow are names such as Procter & Gamble, Salesforce.com, Goldman Sachs, Chevron and Boeing, which are top risers so far.
8am: Nasdaq called higher, Warner Bros rejects Paramount
The tech stocks of the Nasdaq are expected to lead gains on Wall Street on Wednesday, when economic data centers around inflation and the housing market.
Nasdaq futures were up 0.5%, while the S&P 500 and the Dow Jones were respectively expected to open 0.4% and 0.2% higher.
A day earlier, the trading session finished on a mixed note, with the Nasdaq edging up 0.2% to 23,111, led by a new high for Telsa, and solid gains for fellow tech giants Meta and Palantir.
The Dow Jones slid 0.6% to finish at 48,114, the S&P 500 dipped 0.2% to 6,800 and the Russell 2000 fell 0.4% to 2,520.
Much of the day’s focus was on the delayed October and November jobs reports, where slightly more jobs were added than expected, but the unemployment rate climbed to 4.6%, its highest level since 2021.
Wednesday's data includes mortgage applications, housing starts, building permits and new home sales.
Attention is also turning to Thursday’s US inflation data.
In company news, the board of Warner Bros Discovery rejected the $108 billion takeover bid from Paramount Skydance after a key backer was reported to have pulled out. Shares in WBD fell 1.4% in premarket trading.
In a statement, WBD directors unanimously reiterated their backing for the Netflix merger and recommended that shareholders reject Paramount's offer.
The DXY dollar index is up 0.4%, with the USD up strongly against the British pound after a downside surprise in UK inflation.
"After a choppy and volatile reaction to yesterday morning's data releases, Treasuries settled in with small gains as the long-end of the curve outperformed, flattening the curve for the first time in a week as oil prices tumbled," said analyst John Canavan at Oxford Economics.
"The long-end of the curve led a slow drift higher in Treasury yields during the Asian session last night. Investors in Asia were quick to push back against yesterday's modest gains following the mixed US jobs and retail sales data.
"Oil prices rebounded after President Trump ordered a blockade of sanctioned tankers off Venezuela, adding to the long-end led nature of the Treasury market selloff," he said.
With the payrolls jobs and retail sales releases out of the way, he said today's data releases were not significant for the Fed and markets overall.