FX.co ★ US Stocks Start the Week Sharply Lower

U.S. stocks began the week on a notable downtrend, as investors prepared for a series of postponed economic reports and an important round of tech company earnings. The Dow dropped 1.1%, while the S&P 500 and Nasdaq decreased by 0.8% and 0.7%, respectively. This decline was predominantly driven by renewed weakness in major tech companies, with Nvidia falling 1.9% ahead of its quarterly earnings report due post-market close on Wednesday. This release is seen as a crucial indicator of the sustainability of AI-related valuations. The downturn was further exacerbated by widespread selling among other large-cap stocks. Concurrently, risk pricing has shifted significantly as Federal funds futures now suggest a 40-45% probability of a 25 basis point interest rate cut in December, prompting traders to seek clarity from the upcoming employment data and other delayed indicators. Bucking the general downward trend, Alphabet rose by 3% following Berkshire Hathaway’s announcement of a multibillion-dollar investment in the company, illustrating targeted value-seeking amid the broader market selloff.