Super Micro's AI rise and Google's legal battle

Market overview

Today's trading session showed a negative trend throughout the day. The most important indices initially recorded slight declines, which increased further in the afternoon. The S&P 500 closed 1.0% lower, while the Nasdaq Composite fell 1.2%. The Dow Jones Industrial Average fell 0.9% and the Russell 2000 closed with a loss of 0.8%.

Stock performance

• Meta Platforms (META) fell 1.9% to 584.88, despite rising 1.2% earlier.
• Broadcom (AVGO) fell 0.9% to 175.08 after an initial rise of 0.9%.
• Apple (AAPL) fell 2.3% to 221.69 after Jefferies downgraded the stock to “hold” from “buy.”
• Amazon.com (AMZN) fell 3.0% to 180.88 due to a downgrade from Overweight to Equal Weight at Wells Fargo.

Market influences

The sell-off was partly due to profit-taking following a recent strong performance. Major indexes were near record highs, buoyed by a robust jobs report for September. In addition, geopolitical concerns about possible tensions between Israel and Iran contributed to the negative sentiment. This led to a significant increase in oil prices, with WTI crude oil futures rising 3.7% to $77.18 per barrel. The price increase was also influenced by the strengthening of Hurricane Milton into a Category 5 storm.

Sector performance

• The energy sector of the S&P 500 was the only one to close higher, gaining 0.4%. Chevron (CVX) rose 0.3% to 151.13 after selling shares in the Athabasca Oil Sands Project and Duvernay Shale for $6.5 billion.
• The utilities sector recorded the largest decline, falling by 2.3%.
• The communications services sector fell by 2.0%.

Interest rates

Rising market interest rates also contributed to the stock sell-off. The 10-year yield rose five basis points to 4.03%, and the 2-year yield rose seven basis points to 4.00%.

Performance since the beginning of the year

• Nasdaq Composite: +19.4%
• S&P 500: +19.4%
• Dow Jones Industrial Average: +11.3%
• S&P Midcap 400: +11.3%
• Russell 2000: +8.2%

Review of economic data

In August, consumer loans rose $8.9 billion, below the consensus of $12.7 billion, after a revised increase of $26.7 billion in July. The key finding is the decline in revolving credit, indicating increased caution among consumers.

Latest news

Shares of Super Micro Computer (SMCI, Financial) rose over 15% after announcing major AI server deployments. The company announced that it recently deployed more than 100,000 GPUs with its liquid cooling solutions for large AI factories and cloud service providers, increasing investor confidence in its innovative technology offerings.

Google (GOOG, Financial) is appealing a court ruling in favor of Epic Games, arguing that proposed changes to the Android and Google Play ecosystems could jeopardize user privacy and security. Google claims that these changes, designed to allow the installation of third-party apps, could reduce competition and negatively impact the consumer experience.

Nvidia (NVDA, Financial) shares rose nearly 4% as anticipation builds for CEO Jensen Huang's keynote address at the Consumer Electronics Show in January 2025. Investors are looking forward to potential GeForce RTX 50 series announcements that could underscore Nvidia's continued leadership in GPU technology.

Scholar Rock Holding Corp. shares (SRRK, Financial) rose 335% after its spinal muscular atrophy drug apitegromab met primary endpoints in a Phase III trial. The promising results have paved the way for regulatory submissions in the US and Europe.

ExxonMobil (XOM, Financial) continued its upward trend, marking its seventh straight advance amid rising oil prices due to tensions in the Middle East. The stock has benefited from the recent rise in Brent crude oil prices due to geopolitical concerns.

Occidental Petroleum (OXY, Financial) also posted gains, closing higher for the seventh straight session. The company is benefiting from current oil market momentum and is supported by recent financing of its carbon sequestration projects.

Shares of Pfizer (PFE, Financial) rose nearly 3% after activist investor Starboard Value acquired a significant stake in the company and pushed for strategic changes. The move reflects growing investor interest in Pfizer's potential for operational improvements.

Lockheed Martin (LMT, Financial) has reached an agreement with the US Department of Defense for software and hardware upgrades for its F-35 jets. The deal includes a significant investment to improve the Pentagon's testing facilities, with the goal of delivering improved jets by the end of the year.

Black Diamond Therapeutics (BDTX, Financial) announced a corporate restructuring to focus on its lead oncology program BDTX-1535. The company aims to extend its cash runway into 2026 despite an after-hours decline in its share price.

Allstate (ALL, Financial) and other insurance stocks posted declines as Hurricane Milton approached Florida, raising concerns about increased claims. The looming storm has triggered extensive evacuation preparations in the state.

Charles Schwab's (SCHW, Financial) Trading Activity Index saw a significant decline as retail investors reduced their risk amid market volatility and a recent interest rate cut by the Federal Reserve. This divergence highlights investors' cautious stance despite broader market gains.

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