Annabelle Chih / Bloomberg / Getty Images
Nvidia CEO Jensen Huang and Super Micro Computer CEO Charles Liang, during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024.
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The S&P 500 declined 1.1% on Tuesday, March 18, as concerns about trade and the economy weighed on sentiment and the tech sector selloff resumed.
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Shares of server maker Super Micro Computer posted the heaviest losses in the benchmark index amid concerns about near-term headwinds for AI.
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Discover stock recovered as analysts expressed confidence in the credit card issuer’s planned merger with Capital One, despite regulatory concerns.
Major U.S. equities indexes lost ground Tuesday, failing to maintain the momentum from two straight positive sessions. Trade-related uncertainties and concerns about economic growth persisted as the Federal Reserve kicked off its two-day policy meeting, with an interest-rate announcement set for Wednesday.
The S&P 500 lost 1.1%, while the Dow slipped 0.6%. Remounting pressure on tech stocks weighed on the Nasdaq, which closed 1.7% lower.
The spotlight fell on the artificial intelligence (AI) industry as semiconductor giant Nvidia (NVDA) unveiled its latest generation of AI chips at a major conference. Suggesting that Nvidia’s event might provide a reality check on AI, Wedbush analysts said macroeconomic uncertainty could create near-term headwinds but would not derail massive long-term investments in the technology. Nvidia shares ended 3.4% lower, while shares of AI server maker Super Micro Computer (SMCI) tumbled 9.6%, losing the most of any S&P 500 stock.
Shares of Norwegian Cruise Line Holdings (NCLH) fell 4.8% on Tuesday, reversing gains posted in the prior session after JPMorgan analysts upgraded the stock. In a meeting with the analyst team, cruise operator executives reportedly stressed that they see stable demand, but rising geopolitical tensions and economic uncertainty remain potential headwinds for travel demand. Shares of rival Royal Caribbean Cruises (RCL) suffered even steeper losses, slipping 7.3%.
Tesla (TSLA) shares dropped 5.3%, continuing their recent slide as RBC Capital slashed its price target on the electric vehicle (EV) maker’s stock. Analysts pointed to concerns about Tesla’s self-driving technology as well as its rollout of robotaxis in China and Europe. Moreover, Chinese competitor BYD unveiled an ultra-fast EV charger, with plans to launch vehicles equipped with the technology in April.
Shares of credit card issuer Discover Financial Services (DFS) added 3.8%, logging the top daily performance in the S&P 500. With the gains on Tuesday, the stock clawed back losses suffered the prior day following reports that Department of Justice officials may have antitrust concerns about Discover’s merger with Capital One Financial (COF). Analysts at Citi suggested that, even if regulators object to potential concentration in the subprime market, the two companies could still negotiate a satisfactory deal. Capitol One shares also recovered, gaining 2.1%.
