Wall Street Ends Lower as Tech Stocks Dip Amid China Probe and Inflation Fears

Wall Street Ends Lower as Tech Stocks Dip Amid China Investigation and Inflation Concerns

U.S. stocks dipped on Monday, with the technology sector bearing the brunt of the decline after an investigation into Nvidia by Chinese regulators and as investors anxiously awaited key inflation data later in the week.

China’s Investigation into Nvidia Weighs on Tech

The Nasdaq Composite led the downturn, falling 0.62% to 19,736.69, while the S&P 500 dipped 0.61% to 6,052.85. The Dow Jones Industrial Average also succumbed to pressure, losing 0.54% to close at 44,401.93.

The decline was mainly triggered by news from China. The State Administration for Market Regulation (SAMR), the nation’s market watchdog, revealed an investigation into American semiconductor giant Nvidia for alleged violations of anti-monopoly laws.
Nvidia’s shares fell 2.55% on the news, pulling down other technology stocks in its wake.

“The market was a little surprised by the investigation carried out by China into Nvidia, which may have acted in violation of the anti-monopoly law. So this is an element which slows down the market a little,” commented Sam Stovall, senior investment strategist at CFRA Research in New York.

Inflation Data Looms Large

Adding to the uncertainty, investors are keenly anticipating the release of critical inflation data this week. The Consumer Price Index (CPI) for November is scheduled to be released on Wednesday, followed by the Producer Price Index (PPI) a day later.

These figures are expected to significantly influence the Federal Reserve’s monetary policy decisions at its meeting on December 17 and 18. Market expectations for a 25 basis point rate cut at that meeting have surged to over 85% following Friday’s jobs report, which showed a rise in the unemployment rate to 4.2% in November, signaling a potential softening of the labor market.

However, several Fed officials, including Chair Jerome Powell, have cautioned against moving too quickly to ease monetary policy, citing the continued resilience of the economy.

Stock Movers

Beyond the overarching concerns, individual stocks also saw notable movements. Advanced Micro Devices slumped 5.57% after BofA Global Research downgraded its rating on the stock, weighing on the Philadelphia Semiconductor index.

Comcast, anticipating a loss of more than 100,000 broadband internet subscribers in the fourth quarter, sank 9.5%, negatively impacting the communication services sector.

On a brighter note, Hershey soared 10.85% following reports that Mondelez International, parent company of Cadbury, was exploring the possibility of acquiring the chocolate maker. Meanwhile, Mondelez shares declined by 2.26%.

Will the Chinese government ⁣expand it’s scrutiny of US tech companies beyond Nvidia?

The Chinese⁢ examination into Nvidia certainly caught ⁤the market ⁢off guard. Do you think this signals a broader shift⁣ in US-China relations, particularly in the ‌tech sector, or is this just an isolated incident?