Tech stocks experienced significant declines on Monday due to rising interest rates and new AI chip export regulations, affecting major players like Nvidia, Palantir, and Apple.
Tech stocks took a significant hit on Monday, driven by a combination of rising interest rates and new export regulations on AI chips announced by the Biden administration. The sell-off was widespread, affecting major tech companies across various sectors.
Nvidia, a leader in the AI chip market, saw its shares drop by 3.7% following the announcement of new export control rules aimed at limiting the sale of AI chips to certain countries. The company criticized the rules, stating they could stifle innovation and undermine U.S. technological leadership. Other AI-related stocks, including Super Micro Computer, Micron, and Palantir, also experienced declines, with losses ranging from 4.3% to 10%.
The broader market was also affected, with the Nasdaq and S&P 500 both falling. The Nasdaq dropped by 0.7%, while the S&P 500 saw a slight decline of 0.07%. In contrast, the Dow Jones Industrial Average managed a gain of 0.78%. The 10-year Treasury yield reached a new high of 4.77%, and oil prices surged, with West Texas Intermediate reaching $79.2 per barrel.
The sell-off in tech stocks was exacerbated by a strong jobs report released on Friday, which raised doubts about further interest rate cuts by the Federal Reserve. Investors are now scaling back expectations for rate cuts, with some Wall Street firms suggesting no cuts at all this year. This shift in expectations contributed to the tech sector's downturn, as higher interest rates typically lead to reduced valuations for growth stocks.
Quantum computing stocks, which had seen gains from last year's positive Alphabet chip announcement, also faced significant losses. D-Wave and IonQ saw declines of 28% and 10%, respectively, following comments from Meta CEO Mark Zuckerberg and Nvidia CEO Jensen Huang suggesting that practical quantum computers are still decades away.
In addition to the tech sector, other notable movements included a 23% plunge in Moderna's stock after the company lowered its sales guidance for the year. On a positive note, Lululemon's shares rose by 2.5% after the company raised its fourth-quarter earnings and revenue outlook. Trump Media & Technology Group's stock surged by more than 21% ahead of Donald Trump's return to the White House.
This week, investors will be closely watching key economic indicators such as the consumer price index (CPI) and producer price index (PPI), as well as earnings reports from major companies like JPMorgan Chase, Goldman Sachs, Taiwan Semiconductor, and UnitedHealth.
Robinhood Markets, Inc. has seen its stock price surge to a new 52-week high, driven by positive upgrades and a favorable market environment. The company's performance in 2024 and its position in the penny stock market have also contributed to its recent success.
Hino Motors, a subsidiary of Toyota, faces criminal charges in the U.S. for selling over 105,000 non-compliant diesel engines, marking a significant scandal in the automotive industry.
Instagram, owned by Meta, experienced a significant outage in the US on January 15, 2025, which was largely resolved by the afternoon, as reported by Downdetector.
BlackRock Inc. reported a record $11.6 trillion in assets under management in Q4 2024, driven by strong market performance and strategic acquisitions, leading to a rise in its stock price.
General Motors has signed a multi-billion dollar agreement with Vianode to secure synthetic graphite for its electric vehicle batteries, aiming to reduce reliance on China and enhance EV production.
The Bank of New York Mellon Corporation (BNY) reported a robust Q4 2024, with earnings and revenue surpassing expectations, leading to a significant rise in its stock price.
JPMorgan Chase reported a record annual profit and a significant Q4 earnings beat, driven by a surge in investment banking fees and trading revenue, surpassing Wall Street expectations.
Meta Platforms Inc. plans to cut approximately 5% of its workforce, focusing on low performers, as part of its ongoing efficiency drive. CEO Mark Zuckerberg announced the move in an internal memo, signaling an 'intense year' ahead with a focus on AI, smart glasses, and social media innovation.
Boeing's stock experienced a decline following a significant drop in aircraft deliveries in 2024, marking the lowest delivery numbers since the onset of the COVID-19 pandemic. The company faced challenges including a labor strike, production issues, and increased competition from Airbus.