Nvidia (NVDA) tumbled 9% on Tuesday, weighing on the Nasdaq which closed down over 3%. Nvidia was the worst performing of the Magnificent Seven yesterday and less than a week after beating expectations that failed to move NVDA higher. Chip stocks Broadcom (AVGO), Qualcomm (QCOM), and Taiwan Semiconductor Manufacturing Company (TSM) were all down over 6%.
An after-hours Bloomberg report is sending Nvidia stock down more. The report says the US Justice Department sent subpoenas to Nvidia, seeking evidence the company has violated antitrust laws. The DOJ had previously sent questionnaires to chip makers back in June and antitrust officials are now concerned that Nvidia is making it harder to switch to other suppliers and penalizing buyers that don’t exclusively use their AI chips.
A new Treasury report released Tuesday shows that business startups are surging. So far in 2024, the US is averaging 430K new business applications per month, which is 50% higher than 2019, the last pre-COVID year. Business applications most likely to hire employees have risen to 140K per month. Small businesses are providing 70% of new US jobs.
Corporate earnings premarket include DICK’S Sporting Goods (DKS), Dollar Tree (DLTR), and Hormel Foods (HRL). Earnings after the bell include Copart (CPRT) and Hewlett Packard Enterprise (HPE).
The economic calendar includes Trade Balance @ 8:30am ET, JOLTS Job Openings and Factory Orders @ 10:00am ET, and the Fed Beige Book @ 2:00pm ET. The JOLTS reading is expected to show further cooling of the labor market as market focus shifts from inflation to economic growth concerns.
Volatility jumped higher on Tuesday’s selloff. The 5-day average ES daily range jumped to about 88 points.
Whale bias is leaning bullish into the US session open on relatively light overnight large trader volume given yesterday’s volatility.
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