Stocks Plunge To Start September as Nvidia Leads Chipmakers Sharply Lower

Biggest S&P 500 Movers on Tuesday

September 03, 2024 06:07 PM EDT

Decliners

• Shares of Texas-based power generator Vistra (VST) plummeted more than 11%, the biggest drop of any S&P 500 stock. The company has drawn attention because of opportunities associated with demand for power from data centers running artificial intelligence (AI) technology and oil field operations. That had helped the stock gain more than 120% year to date heading into Tuesday’s session.
• Monolithic Power Systems (MPWR) shares dropped 10% on Tuesday. The manufacturer of power management chips saw its stock price soar to an all-time high last week as analysts at TD Cowen boosted their price target. However, recent regulatory filings showed that Monolithic’s executive vice president of global operations sold $8.7 million worth of shares in the company.
• Shares of Constellation Energy (CEG), a power utility headquartered in Maryland, sank 9.6%. Similar to Vistra, Constellation Energy stock has posted strong gains in 2024 driven by expectations of high demand from AI data centers. Although Bank of America analysts recently boosted their price target on the stock, predicting strength for the company in the second half of the year, they maintained a “neutral” rating on the shares. Recent reports have questioned whether Constellation Energy’s debt levels could be a cause for concern.

Advancers

• Molson Coors Beverage (TAP) shares jumped 5.4%, marking the S&P 500’s top daily performance on a day when food and drink stocks broadly performed well. Molson, owner of Miller beer and other brands, completed the sale of several craft breweries to cannabis-focused Canadian firm Tilray Brands (TLRY).
• Shares of DexCom (DXCM), which provides medical devices to help patients manage diabetes, added 4.4%. The stock plunged in July after DexCom reported weaker-than-expected quarterly results and lowered its full-year sales guidance. However, last week’s launch of Stelo—the first continuous glucose monitor (CGM) to be available in the U.S. without a prescription—could bode well for future growth.

• Shares of options exchange operator Cboe Global Markets (CBOE) were up 3.6%. Zacks Equities Research recently highlighted CBOE as an attractive momentum stock, noting outperformance versus its industry and sector as well as strong organic sales growth driven by transaction fees.

–Michael Bromberg

September is Typically a Bad Month, But Should You Sell?

September 03, 2024 05:39 PM EDT

September is the only calendar month to average a negative return over the past 98 years.

However, over the last century, the S&P 500 has been positive in September more often than it has been negative.

Equities have also tended to perform better in the Septembers leading up to a presidential election.

Read here our full analysis of the so-called ‘September Effect.’

–Colin Laidley

US Steel Falls on Kamala Harris Comments

September 03, 2024 04:55 PM EDT

U.S. Steel (X) shares tumbled Tuesday, a day after Democratic presidential candidate and Vice President Kamala Harris said that she supported the White House stance against Japan’s Nippon Steel purchase of the Pittsburgh-based firm.

Speaking at a Labor Day event in that city, Harris explained that “U.S. Steel is a historic American company, and it is vital for our nation to maintain strong American steel companies.” She added, “I couldn’t agree more with President Biden, U.S. Steel should remain American owned and American operated.”

The $14.9 billion deal was announced last December after U.S. Steel had earlier rejected a lower offer from Ohio-based Cleveland-Cliffs (CLF). However, in March President Biden issued a statement opposing the Nippon acquisition, noting that he “told our steel workers I have their backs, and I meant it.”

In an email response to an Investopedia request for comment, U.S. Steel argued that the firm “will be a much stronger company as a result of the transaction with Nippon Steel, and the American steel industry will be more globally competitive.

Former President Donald Trump, the Republican nominee, has said he would block the Nippon-U.S. Steel merger, according to news reports.

U.S. Steel shares fell 6.1% to close at $35.60. The stock has lost 27% of its value since the start of the year.

Intel Drops Amid Concerns It Could Lose Dow Status

September 03, 2024 04:15 PM EDT

Intel (INTC) shares fell nearly 9%Tuesday amid worries the chipmaker could be in danger of losing its status as a member of the Dow Jones Industrial Average.

The company was one of the first tech companies to join the 30-stock index in 1999, but last month’s disappointing second-quarter earnings results sent shares to their lowest level since 2013. The stock is the worst-performing constituent of the DJIA this year, with shares down nearly 60% from the start of 2024.

The DJIA is a price-weighted index that tracks 30 large, publicly-owned companies trading on the New York Stock Exchange and the Nasdaq. Intel is the lowest-weighted component of the index, making up just 0.3% of the DJIA as of last last week. 

–Andrew Kessel

Beer is Buzzing as Staples Shares Surge

September 03, 2024 02:02 PM EDT

On a day when tech shares were leading markets lower, investors decided it was time for a beer. 

The S&P 500’s consumer staples sector was recently up about 1.1%, rising as tech stocks were pulling the benchmark index lower, making it the best-performing sector on the day so far. Real estate was up about 0.4%.

Molson Coors (TAP), recently up about 5%, was the best-performing stock in the entire index, while several others—including JM Smucker (SJM), Campbell Soup (CPB), and Modelo owner Constellation Brands (STZ)—were among the top gainers. Constellation earlier today updated its full-year guidance, which included a bump in the low end of its outlook for earnings per share.

–David Marino-Nachison

Boeing Tumbles as Wells Fargo Cites Cash Flow Concerns

September 03, 2024 12:16 PM EDT

Boeing (BA) shares tumbled Tuesday after Wells Fargo downgraded the stock on concerns about the plane maker’s long-term free cash flow. 

The bank lowered its rating on the stock to “underweight” from “equal weight,” and slashed its price target to $119 from $185.

Analyst Matthew Akers pointed to Boeing’s “extensive delays and added cost” impacting aircraft production cash flow. Akers said Wells Fargo’s “deep dive into FCF drivers through 2030 shows cash peaking in 2027 at or below BA’s prior $10B target. Our FCF estimates are 15-20% below consensus in 2026-27.”

Boeing shares were down 8% at $159.92 around midday, leading Dow decliners.

–Bill McColl

Broadcom Slides as Earnings Report Looms

September 03, 2024 10:52 AM EDT

Shares of Broadcom (AVGO) were down nearly 5% in early trading Tuesday amid a broader downturn for chip stocks, as the company prepares to release its quarterly earnings report on Thursday.

Investors will likely be scrutinizing the company’s AI sales growth and full-year outlook, which have benefited in recent quarters from growing demand for its custom AI chips.

Broadcom shares reclaimed the 50-day moving average last month after a steep correction, through the recovery has occurred on decreasing volumes, indicating a lack of institutional activity.

Investors should monitor key lower chart levels at $157 and $141, while also watching important higher levels around $168 and $195.

Read our full technical analysis piece here.

–Timothy Smith

Stocks to Watch in September

September 03, 2024 08:46 AM EDT

Stocks rebounded in the final weeks of August, putting the S&P 500 just below its all-time high heading into September. But a lot has changed under the surface since July.

The Magnificent Seven stocks that once dominated the market have yet to fully recover from recent sell-offs. The year’s most popular trade—a long bet on big tech stocks—has faltered as investors have warmed up to dividend payers and other rate-sensitive stocks in anticipation of interest rate cuts by the Federal Reserve.

With the Fed all but guaranteed to lower rates at its September meeting, the big unknowns hanging over markets in September are: How much will rate cuts be? And can the AI trade regain its footing?

Read here about five stocks, including Nvidia (NVDA) and Apple (AAPL), that could either lead market trends or see big price moves in September.

–Colin Laidley

Major Indexes Poised to Open Lower Tuesday

September 03, 2024 08:08 AM EDT

Futures tied to the Dow Jones Industrial Average were down 0.5%.

S&P 500 futures were also down 0.5%.

Nasdaq 100 futures were off 0.7%.