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Key Takeaways
- The S&P 500 fell 1.1% on Tuesday, Jan. 7, as U.S. manufacturing data reinvigorated concerns about inflation and the interest rate outlook.
- Shares of data analytics software firm Palantir lost ground for the second straight session after Morgan Stanley analysts cited valuation concerns.
- Moderna shares surged as reports of the country’s first bird-flu fatality sparked interest in the biotech firm’s experimental H5N1 vaccine.
Major U.S. equities indexes lost ground as the latest Purchasing Managers’ Index (PMI) showed an expansion in the manufacturing sector but revealed an increase in the “prices paid” index during December.
The indication of pricing pressure in the final month of 2024 could encourage a cautious stance by Federal Reserve policymakers as they weigh the appropriate timing and magnitude of additional interest rate cuts this year.
The S&P 500 slipped 1.1%. Underperformance in the technology sector dragged on the Nasdaq, which fell 1.9%, while the Dow ended the session 0.4% lower.
The heaviest losses in the S&P 500 hit shares of big data analytics software provider Palantir Technologies (PLTR), which dropped 7.8%. Tuesday’s decline extended the losses posted in the prior session after Morgan Stanley analysts expressed their trepidation about the stock’s valuation following the massive 2024 run-up that made Palantir the top performer in the benchmark index last year.
Shares of artificial intelligence (AI) semiconductor powerhouse plunged Nvidia (NVDA) plunged 6.2% on Tuesday. Although Monday’s CES conference keynote speech by Nvidia CEO Jensen Huang highlighted notable advances, including new gaming chips and a self-driving partnership with carmaker Toyota (TM), analysts cited a lack of detail on Rubin, the chipmaker’s next generation of graphics processing units (GPUs) being developed as a successor to the current Blackwell platform.
Super Micro Computer (SMCI) shares sank 5.7%, reversing a portion of the strong gains achieved in the previous session as analysts speculated that Nvidia’s keynote could be a catalyst for Supermicro. This week’s volatility is nothing new for shares of the server maker, which saw major price swings throughout 2024 as investors reacted to accounting and corporate governance issues.
Moderna (MRNA) shares logged the S&P 500’s best performance on Tuesday, soaring 11.7%. The Centers for Disease Control and Prevention (CDC) reported Monday that a patient in the U.S. had died after being infected with severe avian influenza A (H5N1), the country’s first fatality from the virus commonly known as bird flu. Moderna is developing an experimental vaccine to protect against H5N1.
Shares of hospital operator HCA Holdings (HCA) gained 3.8% after analysts at Truist trimmed their price target on the stock but maintained their “buy” rating. The analyst team noted that, although a more cost-conscious dynamic within the government could weigh on healthcare services companies, the industry should see tailwinds from demographics, trends toward value-based care, and robust core demand.
Solar power stocks built on their hot start to 2025, becoming the latest industry to benefit from expectations for surging AI-driven power demand. The Invesco Solar ETF (TAN) was up 3% on Tuesday. Shares of panel manufacturer First Solar (FSLR) jumped 3.4%, while Enphase Energy (ENPH) shares powered 3% higher as the firm announced that its microinverters had been selected for a solar project at a radioactive waste facility in Belgium.
