S&P 500, Nasdaq, and Dow sink to start final trading week of 2024

Nvidia (NVDA) stock reversed direction following a report from The Information that its customer, ByteDance, plans to spend $7 billion on its AI chips in 2025 despite US export restrictions on goods to China.

Nvidia shares were up 1.8% midday after falling as much as 2% earlier in the trading session.

Chinese TikTok parent ByteDance has reportedly been using Nvidia’s Hopper AI chips in data centers outside of its home country to avoid US trade restrictions, which have ramped up under the Biden administration and are expected to further tighten under President-elect Donald Trump. It is unclear whether the $7 billion commitment from ByteDance represents growth in its spending on Nvidia GPUs from the current calendar year.

Nvidia’s gain Monday brings the stock into the green for the month after a sharp decline in mid-December.

“NVDA shares have underperformed mega cap peers since June, but had very strong performance in 2024,” D.A. Davidson analyst Gil Luria told Yahoo Finance in an email Monday. “That means some investors may want to add NVDA as window dressing for their end of year reports, which should help the stock during the last two days of the year.”

All three of the major indexes were off their session lows around 12:30 p.m. ET on Monday.

The benchmark S&P 500 (^GSPC), the tech-heavy Nasdaq Composite (^IXIC), and the Dow Jones Industrial Average (^DJI) were all off by about 0.7%.

Both the Nasdaq and S&P 500 had been down more than 1.6% at one point in the day. An upswing in Nvidia (NVDA) helped the revival, as the stock, which opened lower on Monday, was up about 1.5%.

US natural gas futures for February delivery soared on Monday, rising as much as 20% as demand for fuel rose amid expectations of a colder January. This marked the largest one-day move since the contract started trading in 2012, according to Bloomberg.

The pop in natural gas spread to the equity market. Energy (XLE) was the lone S&P 500 (^GSPC) sector in the green, up about 0.15% on the day.

Read more on the natural gas spike here.

While stocks are slumping Monday, 2024 was still a year of records on Wall Street with the S&P 500 clinching 57 records to fall into the top five years for most all-time highs recorded by the benchmark index.

Two years into the bull market, strategists pin the rally on strong corporate earnings and outsized momentum from several members of the “Magnificent Seven” tech stocks, which include chipmaker Nvidia (NVDA), along with Tesla (TSLA), Alphabet (GOOGL, GOOG), Amazon (AMZN), Apple (AAPL), Microsoft (MSFT), and Meta (META).

Read more:10 charts that tell the story of markets and the economy in 2024.

Former President Jimmy Carter died Sunday at the age of 100 at his home in Plains, Georgia, the Carter Center said.

On Monday, the New York Stock Exchange and the Nasdaq announced trading will be closed on Thursday, Jan. 9, in observance of the National Day of Mourning.

Yahoo Finance’s Claire Boston reports:

Housing contract activity picked up again in November as buyers shrugged off elevated mortgage rates and took advantage of higher inventory levels.

The Pending Home Sales Index, which tracks contract signings on existing homes, rose 2.2% from October to 79, its highest reading since February 2023, according to the National Association of Realtors (NAR). An index level of 100 is equal to contract activity in 2001.

It’s the fourth straight month of gains. Pending home sales are up 6.9% compared to November 2023.

“Consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory,” Lawrence Yun, NAR’s chief economist, said in a statement.

All 11 sectors in the S&P 500 (^GSPC) were in the red at the open on Monday. The Information Technology sector (XLK), a key driver of the 2024 stock market rally, was off by about 1.8%, leading the losses.

The “Magnificent Seven” tech stocks — Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) — were all of more than 1% to start the trading session.

Futures are pointing to a lower open on Wednesday as stocks continue to struggle during a historically strong period for the S&P 500 (^GSPC).

Since 1950, the S&P 500 has risen 1.3% during the seven trading days beginning Dec. 24, well above the typical seven-day average of 0.3%, according to LPL Financial chief technical strategist Adam Turnquist. History has shown that if Santa does come and the S&P 500 posts a positive return during the time period, then January is typically a positive month for the benchmark index and the rest of the year averages a 10.4% return.

When the S&P 500 is negative during that time frame, January usually doesn’t end in the green, and the return for the upcoming full year averages just 5%, per Turnquist. Three days into this year’s Santa Claus period, which will close on Friday, Jan. 3, the S&P 500 is down less than 0.1%

While history may be flashing a warning sign, it’s notable that last year the Santa Claus rally didn’t materialize. January started poorly too. Still, the S&P 500 is still set to end the year up more than 20%.

Boeing (BA) shares slipped more than 3% in premarket trading on Monday morning after one of its aircraft was involved in a fatal crash in South Korea on Sunday.

The 737-800 aircraft operated by Jeju Air Co. crashed on Sunday morning at Muan International Airport, leaving all but two of the 181 occupants on board dead. Bloomberg reported investigators will be focusing on a bird strike to the aircraft as well as a landing gear failure.