The major U.S. index futures indicate a lower opening on Monday, suggesting that stocks are poised to decline after the mixed performance observed in the previous week. A notable decrease by shares of Nvidia may weigh on the markets, as the AI darling and market leader is slumping by 1.6 percent in pre-market trading. Nvidia’s decline follows a report indicating that the chipmaker’s initiative to allocate as much as $100 billion towards OpenAI for the training and operation of its newest artificial intelligence models has encountered delays. According to sources, the WSJ reported that certain individuals within Nvidia have raised concerns regarding the transaction. Persistent trade tensions coupled with renewed uncertainty regarding U.S. monetary policy have resulted in indications of risk aversion among investors. Overall trading activity may exhibit a degree of restraint, as market participants anticipate the forthcoming release of the Labor Department’s highly scrutinized monthly jobs report on Friday. The forthcoming report is anticipated to reveal an increase in employment by 70,000 jobs in January, following a rise of 50,000 jobs in December, which may influence the perspective on interest rates.
Stocks exhibited volatility during the trading session on Friday, yet retained a negative bias throughout the day, ultimately concluding mostly lower. Following a rebound from an initial sell-off, Thursday’s session concluded with the major averages all firmly positioned in negative territory. The tech-heavy Nasdaq experienced a decline, dropping 223.30 points or 0.9 percent to 23,461.82. Meanwhile, the Dow decreased by 179.09 points or 0.4 percent to 48,892.47, and the S&P 500 fell by 29.98 points or 0.4 percent to 6,939.03. Meanwhile, the major averages exhibited a mixed performance for the week. While the S&P 500 experienced an increase of 0.3 percent, the Nasdaq saw a decline of 0.2 percent, and the Dow recorded a decrease of 0.4 percent. The recent downturn on Wall Street may be attributed, in part, to resurfaced worries regarding inflation, following the Labor Department’s report indicating that producer prices rose significantly beyond expectations in December.
The Labor Department reported that its producer price index for final demand increased by 0.5 percent in December, following a 0.2 percent rise in November. Analysts had anticipated an increase in producer prices by an additional 0.2 percent. The report indicated that producer prices in December increased by 3.0 percent relative to the same month the previous year, remaining consistent with November’s figures. The anticipated annual growth rate is projected to decelerate to 2.7 percent. Recent tariff threats from President Donald Trump may have contributed to the prevailing negative sentiment, as the president has threatened Canada with a 50 percent tariff on all aircraft sold in the U.S. due to its refusal to certify certain Gulfstream jets. Trump additionally enacted an executive order imposing tariffs on goods from nations that sell or supply oil to Cuba.
Meanwhile, traders were responding to the announcement that Trump intends to nominate former Federal Reserve Governor Kevin Warsh to succeed Fed Chair Jerome Powell. While the markets may express relief at the nomination of a prominent former Fed official as the next Fed chair, there is a growing concern that he may not adopt the dovish stance that many had anticipated, according to Chris Zaccarelli. Gold stocks exhibited some of the market’s poorest performances on the day, coinciding with a significant decline in the price of the precious metal, as evidenced by a 12.6 percent drop in the NYSE Arca Gold Bugs Index. Stocks in the semiconductor and computer hardware sectors experienced significant declines, further exacerbating the downturn in the tech-heavy Nasdaq. Steel, airline, biotechnology, and housing stocks exhibited significant declines, trending downward in tandem with the majority of other major sectors.