4:15pm: Nasdaq in the red
The Dow Jones Industrial Average finished higher on Monday, while the Nasdaq edged lower as weakness in semiconductor stocks offset broader market gains and a sharp drop in oil prices boosted sentiment elsewhere.
The Dow climbed 263 points, or 0.5%, to 52,210. The S&P 500 was little changed, adding just 1.2 points to close at 7,413, while the Nasdaq fell 44 points, or 0.2%, to 24,932.
Chip stocks weighed on the technology-heavy Nasdaq after Nvidia dropped more than 4%, adding pressure across the semiconductor sector. Shares of ASML also fell more than 5% after The Information reported that a Chinese state-backed company had begun mass-producing a critical piece of chipmaking equipment, raising fresh questions about competition in the industry.
Elsewhere, crude plunged more than 9% as optimism grew that a diplomatic path could emerge to help bring an end to the war, easing concerns about global energy supplies.
Investors will now turn their attention to another busy stretch of earnings. Applied Digital is set to report after Monday’s closing bell, while Boeing, Coca-Cola, PayPal and UPS are among the major companies scheduled to release results before the market opens on Tuesday.
3:45pm: Proactive news headlines
- NextSource Materials Inc. (TSX:NEXT, OTCQB:NSRCF) reported positive results from an updated feasibility study for the Phase 2 expansion of its Molo Graphite Mine in Madagascar, outlining plans to increase production capacity to 150,000 tonnes of flake graphite concentrate per year over a 37-year mine life.
- Medicus Pharma (NASDAQ:MDCX) received FDA authorization to begin its Phase 2b registrational study of SkinJect for patients with Gorlin syndrome who develop multiple basal cell carcinomas.
- Graphene Manufacturing Group Ltd (TSX-V:GMG, OTCQX:GMGMF) announced that Blackwoods will distribute its liquid graphene products, G LUBRICANT and THERMAL-XR, across Australia through its nationwide industrial supply network.
- Nextech3D.AI (CSE:NTAR, OTCQX:NEXCF, FRA:1SS) said it expects to complete its acquisition of the remaining shares of ARway Corporation that it does not already own in October following the signing of a definitive agreement.
- First Phosphate Corp. (CSE:PHOS, OTCQX:FRSPF, FRA:KD0, OTC:FPHOY) said its Bégin-Lamarche phosphate mining project has received accelerated support status from Quebec's Ministry of Natural Resources and Forests to help speed up development milestones.
2:50pm: Market movers
- Forte Biosciences (NASDAQ:FBRX) shares jumped after argenx agreed to acquire the biotechnology company for approximately $2.2 billion, offering shareholders $77 per share in cash following positive Phase 1b results for its vitiligo treatment candidate FB102.
- ASML Holding NV (NASDAQ:ASML, XETRA:ASME) (ASML Holding NV (NASDAQ:ASML, XETRA:ASME), ASML Holding NV (NASDAQ:ASML, XETRA:ASME)), Advanced Micro Devices Inc (NASDAQ:AMD, XETRA:AMD) (Advanced Micro Devices Inc (NASDAQ:AMD, XETRA:AMD), Advanced Micro Devices Inc (NASDAQ:AMD, XETRA:AMD)) and Micron Technology Inc (NASDAQ:MU) (Micron Technology Inc (NASDAQ:MU)) shares declined after reports that China has begun mass-producing domestic deep ultraviolet lithography machines, raising concerns about competition for ASML’s older-generation chipmaking equipment and broader semiconductor supply chains.
- Cracker Barrel Old Country Store (NASDAQ:CBRL) shares fell after the restaurant chain named David Deno as its next CEO, replacing Julie Masino who will step down from the role but remain as an adviser through October.
- SpaceX Corp (NASDAQ:SPCX) shares dropped to a record low as investors weighed concerns over an upcoming share lock-up expiration, valuation, rising capital spending and financing needs despite the company’s recent Starship test flight success.
- Capricor Therapeutics (NASDAQ:CAPR) shares plunged after FDA reviewers raised concerns about the effectiveness of its experimental cell therapy deramiocel for Duchenne muscular dystrophy-associated cardiomyopathy ahead of an advisory committee review.
1:45pm: Attack pause doesn't calm markets
Investors are paying more attention to volatility in the tech sector than to the temporary pause in the conflict, according to IG's Chris Beauchamp, which means "more trouble ahead."
"Earlier optimism around a pause in fighting did not last once the US session began, and investors took the earlier gains as a chance to cut back exposure yet further in battered tech stocks," Beauchamp noted.
"The Nasdaq 100 fell to its lowest level since early May, hit hard by a 3% drop in Nvidia. While a lack of hostilities is good news all round, the fears hitting markets are broader than that, and in any case, there is too much event this week to go charging back into stocks.”
12:40pm: Chip stocks slide
Shares of major chipmakers fell sharply on Monday after reports that a state-backed Chinese firm has begun mass-producing domestic deep ultraviolet (DUV) lithography machines.
ASML Holding NV (NASDAQ:ASML, XETRA:ASME) (ASML Holding NV (NASDAQ:ASML, XETRA:ASME), ASML Holding NV (NASDAQ:ASML, XETRA:ASME)) dropped more than 7% as China's progress in domestic DUV production threatens the Dutch company's sales of older-generation tools in the region. Advanced Micro Devices Inc (NASDAQ:AMD, XETRA:AMD) (Advanced Micro Devices Inc (NASDAQ:AMD, XETRA:AMD), Advanced Micro Devices Inc (NASDAQ:AMD, XETRA:AMD)) also fell 7.3% and Micron Technology Inc (NASDAQ:MU) (Micron Technology Inc (NASDAQ:MU)) was down nearly 5% by midday.
China has been unable to obtain extreme ultraviolet (EUV) lithography machines from ASML, the sole global manufacturer, after export controls blocked access starting in 2019. But Chinese firms stockpiled a large fleet of older DUV machines before restrictions tightened, and companies including SMIC and Huawei have used multi-patterning techniques on those tools to produce near-frontier chips.
11:45am: Nvidia funding OpenAI data center?
Over the weekend the Wall Street Journal reporrted that Nvidia Corp (NASDAQ:NVDA, XETRA:NVD) (Nvidia Corp (NASDAQ:NVDA, XETRA:NVD), Nvidia Corp (NASDAQ:NVDA, XETRA:NVD)) is in talks to provide a roughly $250 billion financial guarantee to support OpenAI's planned data center project in Ohio.
The report said the proposed guarantee would help OpenAI secure a lease for a planned 10-gigawatt data center campus being developed in southern Ohio by SoftBank's energy subsidiary.
The overall project could ultimately cost more than $500 billion, including the Nvidia chips expected to power the facilities, making it the largest data center project announced to date.
According to the Wall Street Journal, Nvidia's backing would help developers obtain construction financing by addressing lender concerns over OpenAI's non-investment-grade credit profile. The guarantee would apply to lease and construction financing rather than purchases of Nvidia's AI chips.
10:50am: Week ahead
Wall Street is heading for a pivotal week as Big Tech earnings, the Federal Reserve's rate decision and key inflation data test a market hovering near record highs.
The busiest stretch begins on Wednesday, when Microsoft and Meta Platforms report earnings before the focus quickly shifts to the Fed's interest rate decision later in the day. Apple and Amazon then take center stage on Thursday, giving investors another read on whether the AI boom is still worth its hefty price tag.
After Tesla and Alphabet were punished last week for rising AI-related capital spending, investors are expected to scrutinize spending plans just as closely at Microsoft, Meta and Amazon. While demand for AI infrastructure remains strong, markets are becoming less forgiving of companies pouring billions into expansion.
Outside Big Tech, earnings season remains in full swing with reports due from Visa, Boeing, Coca-Cola, Qualcomm, Starbucks, Shell, Coinbase, Chevron, ExxonMobil and AbbVie.
The Fed, however, may be the week's biggest catalyst.
Most economists expect policymakers to leave interest rates unchanged in a range of 3.5% to 3.75%, but investors will be paying close attention to Fed Chair Kevin Warsh's comments on inflation, economic growth and whether higher oil prices have altered the central bank's outlook.
10am: Dow open higher as oil price falls
Wall Street has opened firmly higher, with the Dow adding 481.6 points, or 0.9%, in initial trades. The S&P 500 and Nasdaq have both gained 0.5%.
Salesforce leads the Dow with a 3.5% rise, followed by 3M, Sherwin-Williams and Boeing.
Technology names were broadly stronger, with Microsoft up 2.2% and Workday, Oracle, AppLovin and Palantir among the S&P 500 leaders.
Baker Hughes topped the wider index with an 8.6% surge after winning a major order from Venture Global LNG.
8.30am: Dow Jones, S&P and Nasdaq expected to make good start to week
Wall Street stocks are predicted to open sharply higher on Monday as a pause in US and Iranian attacks sent oil prices tumbling ahead of a massive week for markets, including a Federal Reserve meeting and earnings from several tech megacaps.
Dow Jones futures were up 568 points, or 1.1%, while those for the S&P 500 gained 0.9% and Nasdaq futures jumped 1.5%.
This follows a volatile week that ended on a mixed note, with the Dow and the S&P finishing slightly higher but losing ground over the five days of trading, while the Nasdaq continued a decline that saw it retreat around 2% from the previous Friday.
At the start of this new week, it has been oil prices on a tear downwards, with West Texas Intermediate crude tumbling 6.3% to $83.66 a barrel, taking its decline since last Thursday to around 10%.
Neither Washington nor Tehran has officially acknowledged a ceasefire, although Iran has said it will refrain from further military action for as long as the US does.
Iran's foreign ministry also confirmed discussions with Oman aimed at establishing arrangements for shipping through the Strait of Hormuz, although it denied holding direct negotiations with Washington.
Houthi attacks around the Bab al-Mandeb Strait remain a threat to shipping.
Attention now turns to what Barclays called macro’s “Super Bowl” week, with the Fed's latest pronouncement on Wednesday, with markets pricing in a 34% chance of a quarter-point increase.
Earnings will be equally important. Visa, Coca-Cola, Boeing, S&P Global and PayPal report on Tuesday, followed by Microsoft, Meta, Qualcomm and Starbucks on Wednesday. Apple, Amazon, Mastercard and Coinbase are due Thursday, before ExxonMobil, Chevron, AbbVie and Moderna round out the week on Friday.