Dow, S&P 500, Nasdaq slip as investors rethink rate cut bets

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• Mon, October 7, 2024 at 5:51 PM GMT+2

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  Super Micro Computer stock surges on AI server demand

  Nvidia (NVDA) customer and AI server maker Super Micro Computer (SMCI) jumped as much as 17% Monday after the company announced shipment data.

  Super Micro Computer said Monday morning that it’s shipped over 2,000 of its high-end servers to large-scale AI data centers since June. The company said it’s now selling servers using over 100,000 AI chips per quarter — a sign that there’s no near-term slow down in AI demand, as analysts and investors have feared. The server maker said it’s selling its hardware to “some of the largest AI factories ever built.”

  Super Micro’s stock climb on Monday is helping it recover from a downturn in late September, when shares fell 15% following reports that the company was being probed by the US Department of Justice over possible accounting violations.

  Super Micro stock surged at the beginning of 2024 as Big Tech has rushed to create new generative artificial intelligence technologies with ever-increasing energy demands. The stock has tumbled since reaching highs near $120 per share in March.

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  Mon, October 7, 2024 at 5:08 PM GMT+2

  Oil extends gains, up 2% as market awaits Israeli retaliation against Iran

  Oil extended its gains on Monday following its biggest weekly gain in more than a year in anticipation of an Israeli retaliation against Iran for last week’s missile strike.

  West Texas Intermediate futures (CL=F) advanced more than 2% to trade above $76 per barrel after gaining more than 9% last week. Brent crude futures (BZ=F), the international benchmark, also rose more 2% to touch $80 per barrel for the first time since August.

  Tel Aviv has vowed to strike back after Iran launched some 200 ballistic missiles toward Israel on Tuesday. Traders have been pricing in the chances that a response will target Iran’s oil infrastructure.

  “The Iranian military has responded by saying any attack from Israel would trigger yet a stronger response from Iran, so the Geopolitical stages effect on crude continues to grow,” Dennis Kissler, BOK Financial’s senior vice president of trading, wrote on Monday.

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  Mon, October 7, 2024 at 4:24 PM GMT+2

  ‘Mag 7’ stocks mixed as Nvidia rises 1%, Amazon falls 2%

  Nvidia (NVDA) and Amazon (AMZN), two of the ‘Magnificent Seven’ megacap tech stocks, were moving in opposite directions on Monday.

  Chip heavyweight Nvidia rose more than 1% to trade above $126 per share.

  E-commerce and cloud giant Amazon fell more than 2% after Wells Fargo downgraded the stock to Equal-weight from Overweight amid the expectation that advertising revenue will moderate.

  Growth in Amazon’s cloud unit isn’t likely to make up for margin headwinds, according to Wells Fargo analyst Ken Gawrelski. “AWS strength alone is not enough,” he wrote.

  

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  Mon, October 7, 2024 at 3:30 PM GMT+2

  Stocks open lower as 10-year Treasury yield tops 4%

  The major averages opened lower on Monday as the 10-year Treasury yield (^TNX) rose back above 4%.

  The Dow Jones Industrial Average (^DJI) fell about 0.3% after notching a fresh record high on Friday. The S&P 500 (^GSPC) shed roughly 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) fell 0.5%.

  The yield on the benchmark 10-year Treasury (^TNX) hit 4% for the first time since August, as hopes of another 50 basis point rate cut from the Federal Reserve faded after a stronger-than-expected September jobs report.

  Oil prices extended gains on Monday following their biggest weekly increase in more than a year as markets awaited an Israeli retaliation against Iran over its missile barrage last week.

  West Texas Intermediate crude futures (CL=F) advanced more than 1% to trade above $75 per barrel, after gaining more than 9% last week. Brent futures (BZ=F), the international benchmark, also advanced more than 1% to trade above $79 per barrel.

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  Mon, October 7, 2024 at 2:38 PM GMT+2

  Pfizer stock jumps on reports of Starboard taking $1 billion stake

  Pfizer (PFE) stock rose 2.6% premarket Monday as investors reacted to multiple media reports that activist investor Starboard Value has taken a $1 billion stake in the pharmaceutical giant.

  Starboard has approached Pfizer executives Ian Read and Frank D’Amelio about helping turn the tides at the drugmaker, various media outlets reported, citing unnamed sources. Pfizer, the manufacturer of the world’s first-approved COVID-19 vaccine, has struggled to maintain its dominance post-pandemic. Read and D’Amelio expressed interest in assisting Starboard, The Wall Street Journal reported. Starboard’s plans and the changes it would make at Pfizer are unclear.

  The stock’s moves early Monday morning will bring it into the positive for the year, but shares are far below record highs of nearly $60 in 2022.

  Pfizer is set to report earnings on Oct. 29. Wall Street analysts expect the company to report revenues of $14.8 billion, up about 12% from the prior year. Only half of analysts covering the stock recommend buying it, according to Bloomberg data.