Today's markets: Tech stocks keep sliding
Tech stocks slid again on Monday as the S&P 500 notched its third straight losing session, ending the day down half a percent. Nvidia fell 3 per cent ahead of earnings this week, helping to push the Nasdaq negative for the year.
This morning, sentiment is down on tariffs again, though the FTSE 100 notched a tiny gain at the open while European indices faltered. US President Donald Trump said US tariffs on Canada and Mexico “will go forward” when a monthlong pause on their implementation expires next week, while it was also reported that the president wants to tighten Biden-era controls on chip technology exports to China. According to Bloomberg, Trump is looking to restrict Tokyo Electron and ASML engineers from maintaining semiconductor gear in China, while Nvidia may also see tougher restrictions on sales to China. ASML took a while to print but slipped 2 per cent when it opened eventually.
Asian shares fell, with the tech-led rally in Hong Kong unwinding a bit to send the Hang Seng down 2 per cent. European indices were in the red a bit this morning.
Nvidia is down 7 per cent since Thursday and the market definitely seems to be wobbling as it frets over earnings at the chipmaker. Adjusted earnings per share is seen at $0.84, up 63 per cent from the year before on revenues projected to be $38.3bn, up 73 per cent. The main focus though is probably what CEO Jensen Huang says about the state of the chip sector, where AI is going, what the DeepSeek competition means and any impact from tariffs. Read more on all that here.
Despite all the apparent concerns about Germany politics and the economy, the Dax is up 12 per cent for the year and rallied again yesterday on the election result and the new chancellor’s plans to boost defence spending immediately.
Europe has been quick to catch up with the US market on the simultaneous benefits of an expected peace dividend and push to move to a war footing. It seems kind of odd, but to have peace you must prepare for war – si vis pacem, para bellum. Rheinmetall surged more than 6 per cent on Monday after the election and is up 57 per cent year-to-date. Meanwhile Bain Capital made a move for underloved UK defence manufacturer Chemring. US defence stocks meanwhile have missed out on the rally in Europe – Trump wants to cut Pentagon spending – precisely the same driver that’s boosting European defence firms is weighing on the US firms like NOC and LMT.
Elsewhere, Unilever boss Hein Schumacher, has stepped down after just over a year and a half in the job. Fernando Fernandez, the company’s chief financial officer, will take over. Schumacher’s turnaround at the consumer goods giant and spun off the ice cream business – he seemed to be in control of things, cutting costs and jobs and the number of brands to focus on the biggest sellers. More on that here.
By Neil Wilson, an analyst at TipRanks