U.S. stock markets closed lower on Monday after three successive weeks of positive close. Market participants remained concerned about the U.S.-China trade war and its implications on major tech stocks. Negative news of a big cable TV and film producer also dented investors’ confidence on risky assets like equities. All three major stock indexes ended in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) tumbled 0.5% or 240.59 points after a choppy session to close at 44,401.93. Notably, 19 components of the 30-stock index ended in negative territory while 11 in positive zone. 

The tech-heavy Nasdaq Composite finished at 19,736.69, sliding 0.6% or 123.08 points due to weak performance by technology behemoths. The S&P 500 failed 0.6% to finish at 6,052.85. Nine out of 11 broad sectors of the broad-market index ended in negative territory while two in positive zone. 

The Financials Select Sector SPDR (XLF), the Communication Services Select Sector SPDR (XLC) and the Utilities Select Sector (XLU) tumbled 1.4%, 2.1% and 1.3%, respectively. On the other hand, the Health Care Select Sector SPDR (XLV) rose 0.3%. 

The fear-gauge CBOE Volatility Index (VIX) was up 11.1%% to 14.19. A total of 15.11 billion shares were traded on Monday, higher than the last 20-session average of 14.46 billion. Decliners outnumbered advancers on the NYSE by a 1.24-to-1 ratio. On Nasdaq, a 1.56-to-1 ratio favored declining issues. 

NVIDIA and COMCAST Tumble

The State Administration for Market Regulation of China has opened an investigation on world’s largest generative artificial intelligence (AI) producer NVIDIA Corp. NVDA over possible violations of the country’s antimonopoly law.

The Chinese regulator has started an investigation regarding NVIDIA’s acquisition of Mellanox and some agreements related to the deal. Nvidia acquired the Israeli technology company in 2020. Mellanbox provides network solutions for data centers and servers. 

On the other hand, Comcast Corp. CMCSA declared that the company expects broadband subscribers to decline by over 100,000 in fourth-quarter 2024. The consensus estimate was for a decline of 63,000 subscribers. 

Consequently, stock prices of NVIDIA and Comcast plummeted 2.6% and 9.5%, respectively. NVIDIA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Rate Cut Hope Rises

Market participants are hopeful of another round of reduction in the benchmark lending rate in December. Investors believe that gradually reducing inflation rate and solid fundamentals of the U.S. economy will pave the way for a soft landing. The Fed reduced the market interest rate by 75 basis points in September and November to a range of 4.5-4.75%. The previous range of 5.25-5.5% was the highest level in 22 years.

The CME FedWatch interest rate derivative tool currently shows an 86% probability that central bank will cut the Fed fund rate by another 25 basis points in December. This probability was around 66% at the beginning of last week. If this materializes, total reduction in the Fed fund rate will be 1% in 2024. 

Economic Data

The U.S. Census Bureau reported that wholesale inventories increased 0.2% month over month in October compared with a 0.2% decline in September. The metric for October was in line with the consensus estimate.

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