Wall Street retreated on November 19, 2023, as anxieties surrounding artificial intelligence and upcoming earnings reports from Nvidia weighed on investor sentiment. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all closed lower, reversing earlier gains.
The downturn reflects growing concerns about the sustainability of the recent tech rally, fueled largely by enthusiasm for AI.Investors are closely watching Nvidia, a key player in the AI chip market, for signals about demand and future growth. Its earnings report, scheduled for after market close today, is expected to provide crucial insights into the health of the sector. A Bank of America survey indicates stock exposure remains at its highest level since february, prompting strategist Michael Hartnett to predict further market corrections if interest rates are not lowered next month.
The S&P 500 fell 0.81% to 4,515.77, while the Nasdaq Composite dropped 1.02% to 14,030.04. The Dow Jones Industrial Average declined 0.45% to 35,333.45. These declines follow a period of strong performance for stocks, driven by hopes that the Federal Reserve is nearing the end of its interest rate hiking cycle.
Nvidia’s performance is particularly vital because of its dominance in the production of graphics processing units (GPUs) essential for AI applications. The company’s guidance for the next quarter will be scrutinized for any signs of a slowdown in demand.Beyond Nvidia,broader economic factors,including persistent inflation and geopolitical risks,continue to contribute to market uncertainty.