Today might be the day that the Dow (+0.64%) has yearned for; it's up today, while the S&P 500 (-0.19%), Russell 2000 (-0.22%), and Nasdaq Composite (-0.80%) are lower.
The Dow's strong showing today comes as just seven of the index's 30 constituents are down. At the top of the index, Merck (+3.4%) and Nike (+3.2%) are putting up healthy numbers, while other holdings like Apple (+1%) are posting more modest rises.
Meanwhile, at the other end of the index, there's the reason the other large-cap indexes are suffering: Nvidia (-3.4%). The chipmaker is taking other tech-focused names with it to the downside after the Japanese investment bank SoftBank said it had disposed of its $5.8 billion stake to begin making other bets. Softbank was an early investor in NVDA, making this sort of the end of an era.
Tuesday Reading:.
Softbank's move is dredging up bigger questions about whether AI technology is a bubble. The VanEck Semiconductor ETF (-2%) is lower, not just because of Nvidia's negative showing today but because of an industrywide decline in semiconductors. The murmurs come just days after Michael Burry of "The Big Short" fame unveiled a short position on AI stocks, pointing to 'unrepresentative' depreciation, which itself stoked fears.
Withal, we're seeing what seems to be some broadening out. Yes, the world's largest company is down today and hurting the major indexes, but 52.3%, almost 2,900, of the stocks are advancing today. So despite the declines in the indexes, investors see a silver lining in there. Bundle in the government reopening and still-solid earnings and we might be setting course for a stronger end to 2025 than we'd been expecting in the past week or so.
TurboTax Via TheStreet
-- Noah Weidner, Markets Reporter
