Nvidia Slump May Weigh On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a lower open on Monday, with stocks likely to move to the downside following the mixed performance seen last week.

A notable decrease by shares of Nvidia (NVDA) may weigh on the markets, as the AI darling and market leader is slumping by 1.6 percent in pre-market trading.

The drop by Nvidia comes after a report from the Wall Street Journal said the chipmaker's plan to invest up to $100 billion in OpenAI to help train and run its latest artificial-intelligence models has stalled.

Citing people familiar with the matter, the WSJ said some inside Nvidia have expressed doubts about the deal.

Lingering trade tensions along with renewed uncertainty over U.S. monetary policy has also led to signs of risk aversion among investors.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of the Labor Department's closely watched monthly jobs report on Friday.

The report, which is expected to show employment climbed by 70,000 jobs in January after rising by 50,000 jobs in December, could impact the outlook for interest rates.

Stocks fluctuated over the course of the trading session on Friday but maintained a negative bias throughout the day before eventually closing mostly lower.

After recovering from an early sell-off to end Thursday's session mixed, the major averages all finished the day firmly in negative territory.

The tech-heavy Nasdaq led the way lower, slumping 223.30 points or 0.9 percent to 23,461.82, while the Dow slid 179.09 points or 0.4 percent to 48,892.47 and the S&P 500 fell 29.98 points or 0.4 percent to 6,939.03.

Meanwhile, the major averages turned in a mixed performance for the week. While the S&P 500 rose by 0.3 percent, the Nasdaq dipped by 0.2 percent and the Dow decreased by 0.4 percent.

The weakness on Wall Street may partly have reflected renewed concerns about inflation after the Labor Department released a report showing producer prices increased by much more than expected in the month of December.

The Labor Department said its producer price index for final demand climbed by 0.5 percent in December after rising by 0.2 percent in November. Economists had expected producer prices to rise by another 0.2 percent.

The report also said producer prices in December were up by 3.0 percent compared to the same month a year ago, unchanged from November. The annual rate of growth was expected to slow to 2.7 percent.

New tariff threats from President Donald Trump may have also have contributed to the negative sentiment, with the president threatening Canada with a 50 percent tariff on all aircraft sold in the U.S. over its refusal to certify certain Gulfstream jets.

Trump also signed an executive order that would impose tariffs on any goods from countries that sell or provide oil to Cuba.

Meanwhile, traders were also reacting to news that Trump announced his intent to nominate former Federal Reserve Governor Kevin Warsh to succeed Fed Chair Jerome Powell.

"While the markets are probably relieved that a well-known, former Fed official has been nominated as the next Fed chair, they are also likely to pivot to concerns that he won't be as dovish as they were expecting the new chair to be," said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management. Gold stocks turned in some of the market's worst performances on the day amid a nosedive by the price of the precious metal, with the NYSE Arca Gold Bugs Index plummeting by 12.6 percent.

Semiconductor and computer hardware stocks also saw substantial weakness, contributing to the slump by the tech-heavy Nasdaq.

Steel, airline, biotechnology and housing stocks also showed notable moves to the downside, moving lower along with most of the other major sectors. Commodity, Currency Markets

Crude oil futures are plunging $3.39 to $61.82 a barrel after slipping $0.21 to $65.21 a barrel last Friday. Meanwhile, after plummeting $609,70 to $4,745.10 an ounce in the previous session, gold futures are rising $17.90 to $4,763 an ounce.

On the currency front, the U.S. dollar is trading at 155.25 yen versus the 154.76 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1822 compared to last Friday's $1.1848.

Asia

Asian stocks followed Wall Street lower on Monday as lingering trade tensions along with renewed uncertainty over U.S. monetary policy and ongoing heavy selling in the precious metals space spurred risk aversion.

Investors also looked ahead to the release of key U.S. jobs data as well as central bank decisions in Australia, Europe and London for direction.

Precious metals including gold and silver continued to plunge during Asian trading, with gold falling over 5 percent and silver declining nearly 8 percent following last week's dollar-fueled collapse.

Oil prices fell nearly 5 percent after the U.S. and Iran reportedly informed each other that they are ready to conduct negotiations on an agreement to end tensions between them.

Chinese and Hong Kong markets tumbled as beleaguered property developer China Vanke warned of a 11.8 billion net loss for 2025 and electric vehicle giant BYD reported a 30.1 percent year-on-year decrease in vehicle sales for January.

China's Shanghai Composite Index plunged 2.5 percent to 4,015.75, while Hong Kong's Hang Seng Index tumbled 2.2 percent to 26,775.57. Both China Vanke and BYD fell more than 4 percent in Shanghai.

On the data front, China's official manufacturing purchasing managers' index came in well below forecasts at 49.3 and the non-manufacturing PMI fell back into contractionary territory, while a private gauge of China's manufacturing sector showed Chinese factories continued to expand activity in January.

Japanese markets joined a global sell-off as technology stocks lost ground on renewed concerns about the sustainability of AI investments. Investors also braced for the February 8 snap lower house election.

The Nikkei 225 Index slumped 1.3 percent to 52,655.18, reversing early gains after Prime Minister Sanae Takaichi said that a weak yen could be a major opportunity for export industries. The broader Topix Index settled 0.9 percent lower at 3,536.13.

SoftBank Group tumbled 3.8 percent, Advantest lost 4.7 percent, Disco Corp. plummeted 5.9 percent and Lasertec nosedived 14 percent.

Investors ignored the results of a private-sector survey showing Japanese manufacturing activity grew at the fastest pace in about three and a half years in January.

Seoul stocks nosedived after U.S. Trump's nomination of Kevin Warsh as the next Federal Reserve chair led to a sharp decline in gold and silver prices.

The Kospi plunged 5.3 percent to 4,949.67, snapping a four-session winning streak. Earlier in the day, the Korea Exchange (KRX) issued a sell-side circuit breaker for 5 minutes around noon. Hyundai Motor, Samsung Electronics and SK Hynix fell 4-9 percent.

Australian markets closed lower, with the benchmark S&P/ASX 200 Index falling 1.0 percent to 8,778.60, dragged down by financials and material stocks amid rate hike concerns and uncertainty over rare-earth pricing.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index finished marginally lower at 13,412.44.

Europe

After moving to the downside earlier in the session, European stocks have moved mostly higher over the course of the trading day on Monday. Signs of easing U.S.-Iran tension and solid German retail sales data have helped boost sentiment.

Official data showed German retail sales rose 0.1 percent on a monthly basis in December, reversing November's 0.5 percent drop.

On a yearly basis, retail sales posted an annual growth of 1.5 percent compared to an increase of 1.3 percent in November.

While the German DAX Index is up by 0.7 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both up by 0.6 percent.

The dollar held onto its gains after U.S. House speaker Mike Johnson said it'll be a few days before a government funding package comes up for a vote in the House.

Julius Baer has moved to the downside after the Swiss bank reported a sharp drop in profits for 2025.

French drugmaker Sanofi has risen after its genetic disorder drug showed promise in a late-stage trial.

British investment firm 3i Infrastructure has slumped after it flagged a likely £212 million write off of its position in DNS:NET.

U.S. Economic News

The Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of January at 10 am ET.

The ISM's manufacturing PMI is expected to inch up to 48.5 in January after slipping to 47.9 in December, although a reading below 50 would still indicate contraction.

At 12:30 pm ET, Atlanta Federal Reserve Bank President Raphael Bostic is scheduled to participate in a moderated conversation on monetary policy before the Atlanta Rotary Club.