Stock Market Today: Nasdaq Falls as Chips Slide

The stock market today closed with a split decision on Friday, November 13, as worries about Nvidia pressured technology shares and pulled the Nasdaq lower, while the Dow Jones Industrial Average managed a small gain. A fresh reading on inflation failed to alter expectations for more rate hikes from the Federal Reserve, leaving traders to weigh a week that had delivered strong gains overall against a Friday session in which the market’s most important technology names came under heavy selling pressure.

The headline numbers told the story of a market pulling in two directions at once. The Dow Jones Industrial Average rose 50.46 points, or 0.10 percent, to close at 52,347.55. The S&P 500 lost 30.73 points, or 0.40 percent, to finish at 7,561.67. The Nasdaq Composite lost 229.82 points, or 0.91 percent, to close at 25,136.27. The Nasdaq 100, which tracks the largest non-financial companies on the Nasdaq exchange, lost 1.2 percent to 27,943.74.

Those Friday losses came at the end of a week that had been strong for stocks overall. For the week, the S&P 500 gained 2.51 percent, the Nasdaq rose 2.27 percent and the Dow climbed 2.07 percent. CNBC said the Nasdaq notched its best week since August, and the S&P 500 recorded its best week since early August. The contrast between the strong week and the weak Friday captures the mood of a market that has been climbing steadily but remains vulnerable to sudden shifts in sentiment around its biggest names.

Nvidia’s Troubles Weigh on Technology

The main drag on Friday’s session was Nvidia, the chipmaker whose shares have become the single most important driver of the broader market. Nvidia shares recorded their worst week since April last year, amid worries about the company’s future after Jensen Huang’s ouster as chief executive. Nvidia closed Friday at 162.86 dollars, leaving its shares more than 30 percent below their 52-week high.

The scale of that decline is striking for a company that has dominated the market’s conversation for years. Nvidia’s graphics processors power the data centres behind the artificial intelligence boom, and its share price had come to serve as a shorthand for investor confidence in the entire AI trade. A fall of more than 30 percent from the year’s high signals that investors are reassessing not just the company but the assumptions that underpinned its rise.

The selling spread beyond Nvidia to other chipmakers on Friday, though not uniformly. AMD plunged 8.8 percent to 534.06 dollars, and Broadcom fell 4.8 percent to 347.01 dollars, giving back part of Thursday’s rally in which investors had moved money out of Nvidia and into its rivals. That rotation — out of Nvidia and into AMD and Broadcom — had lifted the rivals on Thursday, but Friday’s session reversed much of that move, suggesting that traders were stepping back from the chip sector as a whole rather than simply switching between names.

The chip sell-off matters because semiconductors have become the market’s bellwether. When chip stocks fall together, it tends to drag the Nasdaq with them, since technology companies make up such a large share of the index. Friday was a textbook example: the Nasdaq’s 0.91 percent decline was nearly two and a half times the S&P 500’s fall, reflecting the heavier weight of technology in the Nasdaq and the concentration of the selling in chip names.

The Inflation Report and the Federal Reserve

Friday also brought a fresh reading on inflation, in the form of the producer price report. The producer price index, which measures the prices businesses receive for their goods and services, rose 0.3 percent month over month, against expectations of 0.4 percent, and 6.5 percent year over year, the highest since November 2022, against a forecast of 6.6 percent. Core producer prices, which strip out food and energy, rose 0.3 percent month over month and 5.0 percent year over year. Goods prices rose 0.5 percent month over month and 10.2 percent year over year.

The report landed in a market already focused on the Federal Reserve and the path of interest rates. The data did not alter expectations for more rate hikes from the central bank. After the producer price data was released, CME FedWatch showed an 89.7 percent probability of a 25-basis-point move and a 10.3 percent probability of a 50-basis-point move at the December 8-9 meeting of the Federal Open Market Committee. The Federal Reserve’s target range for its benchmark rate is 3.75 to 4.00 percent, after a hike on September 16, the first since 2023, which was held on October 28 by a 10-2 vote.

For investors, the producer price numbers added to a picture of inflation that remains stubbornly high even as it comes in slightly below the most pessimistic forecasts. The year-over-year reading of 6.5 percent is the highest since November 2022, a reminder that price pressures in the pipeline for goods and services have not gone away. At the same time, the month-over-month figures came in a touch softer than expected, which may explain why the market’s reaction was relatively contained.

The inflation report is the second major price reading of the week. The site published an article earlier today on the hot consumer price data, under the headline about the inflation report putting a Federal Reserve rate hike in play. This article is the market close, a different angle on the same week, focused on how stocks actually traded on Friday rather than on the consumer price figures themselves.

Treasury Yields and the Dollar

The bond market told its own story this week. The 10-year Treasury yield closed the week at 5.15 percent, its biggest weekly rise in 19 months, and the dollar extended its run to a new high for the year. Rising Treasury yields reflect investors demanding higher returns to hold government debt, and they tend to weigh on stock valuations, particularly for growth companies whose future earnings are worth less in today’s terms when rates are higher.

A 10-year yield above 5 percent is a significant level for the market. It raises borrowing costs across the economy, from mortgages to corporate debt, and it gives investors an alternative to stocks that pays a meaningful return with far less risk. The fact that the yield posted its biggest weekly rise in 19 months suggests that the bond market is adjusting to a world in which interest rates stay higher for longer than many investors had hoped.

The dollar’s rise to a new high for the year adds another layer to the story. A stronger dollar tends to hurt the earnings of American multinational companies, since their overseas sales translate back into fewer dollars. It also tightens financial conditions globally, making dollar-denominated debt more expensive for borrowers outside the United States. The combination of rising yields and a rising dollar is a headwind for stocks, and it helps explain why Friday’s session felt heavy even as the weekly gains held up.

Bitcoin and the Risk Appetite

Bitcoin also came under pressure during the week. The cryptocurrency fell through its 200-week moving average to near 68,400 dollars. The 200-week moving average is a long-term technical level that traders watch closely, and falling below it is often read as a sign that the longer-term trend has turned negative.

The slide in bitcoin is part of a broader pullback in risk assets that has accompanied the rise in yields and the shift in expectations around Federal Reserve policy. When interest rates rise, assets that do not pay income or dividends tend to suffer, because the cost of holding them goes up and the alternatives become more attractive. Bitcoin’s decline is covered in more detail in a separate article on the site today.

Breadth: More Stocks Rose Than Fell

Beneath the headline index moves, the market’s breadth on Friday told a more nuanced story. More than 60 percent of S&P 500 stocks rose on Friday, even as the index itself fell. That apparent contradiction is explained by the concentration of the market: a small number of very large technology companies carry so much weight in the index that their declines can pull the whole benchmark down even when most of its members are rising.

The new highs and lows data pointed in the same direction. The S&P 500 posted 9 new 52-week highs and 1 new low, while the Nasdaq Composite recorded 37 new highs and 340 new lows. The large number of new lows on the Nasdaq reflects the breadth of the selling in technology and growth stocks, where many smaller names were hitting fresh lows even as the biggest names dominated the headlines.

The Russell 2000, which tracks smaller American companies, closed the week at 2,790.49, up 1.32 percent for the week. The small-cap index’s weekly gain, smaller than the gains in the large-cap indexes, suggests that the week’s rally was led by the biggest companies rather than by a broad-based advance across the market.

The Week in Review

The week began with a strong rebound on Monday, November 9. The Dow rose 2.15 percent, the S&P 500 gained 2.35 percent, the Nasdaq climbed 2.74 percent, and the VIX, the market’s fear gauge, fell 5.72 points to 19.92. Monday’s rally set the tone for a week in which stocks recovered much of the ground they had lost in the preceding sell-off.

Tuesday, November 10, brought a pullback. The S&P 500 fell 0.38 percent to 7,520.93, and the 10-year Treasury yield stood at 4.98 percent. The Tuesday decline was modest compared with Monday’s gains, and the market went on to build on the week’s advance in the sessions that followed, before Friday’s technology-led selling trimmed the gains.

The weekly numbers are worth putting in context. A 2.51 percent weekly gain for the S&P 500, a 2.27 percent rise for the Nasdaq and a 2.07 percent advance for the Dow are strong results by any standard, and the fact that the Nasdaq’s week was its best since August and the S&P’s its best since early August underlines how powerful the rebound was. The gains came despite the concerns about Nvidia, the hot inflation data and the rise in Treasury yields, suggesting that investors were willing to look past the week’s worries and buy stocks that had become cheaper after the earlier decline.

Global Markets

Outside the United States, the week’s trading was mixed. Europe banked its best week since June, a strong result that suggests the rebound was not confined to American markets. Asia split between Tokyo and Hong Kong, with the two major regional markets moving in different directions. The divergence in Asia reflects the different forces at work in each market, from Japan’s currency and monetary policy to Hong Kong’s exposure to China’s economy.

The global picture matters because American investors increasingly trade in a connected world. A strong week in Europe can support sentiment in New York, just as weakness in Asia can weigh on it. This week, the European strength was a tailwind; the Asian split was a reminder that the global recovery is uneven.

What to Watch Next

Looking ahead, the market’s attention will remain fixed on the Federal Reserve and on the technology sector. The December 8-9 meeting of the Federal Open Market Committee is now the key date on the calendar, with traders pricing in a high probability of a 25-basis-point move and a smaller chance of a larger 50-basis-point increase. The producer price data did not change those expectations, but the consumer price data earlier in the week and the next round of economic reports will be watched closely for any sign that the Fed’s thinking is shifting.

Nvidia will also remain in focus. The company’s shares are now more than 30 percent below their 52-week high, and the questions about its future after the change at the top are unlikely to go away quickly. How the stock trades in the coming sessions will say a lot about whether investors see the recent decline as a buying opportunity or as the start of a longer reassessment of the AI trade.

The bond market is the third thing to watch. The 10-year Treasury yield at 5.15 percent, after its biggest weekly rise in 19 months, is a level that will test the stock market’s resilience. If yields keep climbing, the pressure on growth stocks will intensify. If they stabilise, the market may find room to build on the week’s gains.

For now, the stock market today leaves investors with a mixed picture: a week of strong gains, a Friday of technology-led selling, inflation data that keeps the Federal Reserve in focus, and a bond market that is sending its own warning. The Dow’s small gain on Friday, the S&P 500’s modest decline and the Nasdaq’s sharper fall capture that tension in a single session. What happens next will depend on whether the forces that drove the week’s rebound — bargain hunting, resilient earnings expectations and a willingness to buy the dip — can withstand the pressures that surfaced on Friday.

Source: AP