Tech Stocks Rebounded After Investors Searched for Bargains, Global Markets Trade Sideways

Alexander Garcia
28 Jan, 2025
Miami

Wall Street indexes attempted a rebound a day after a sharp sell-off that saw leading artificial intelligence company stocks plunge as much as 17%. 

Nvidia plunged 17%, Broadcom declined 9%, and AMD dropped 5%.

Market indexes advanced amid a growing list of worries, including U.S. trade policy uncertainty, chaotic and weak presidential administration, resurgent inflation, higher-for-longer interest rates, and the emergence of Chinese competition in the race to dominate artificial intelligence infrastructure. 

The S&P 500 index edged up 0.8%, and the Nasdaq Composite advanced 1.8%, but investors remained cautious about investment by large tech companies in artificial intelligence infrastructure. 

The emergence of cheaper and more cost-competitive artificial models by China's upstart DeepSeek raised doubts about the need to purchase expensive servers using the latest advanced chips for building large language models using artificial intelligence. 

China's DeepSeek claims it developed its advanced chatbot for $6 million, and the app with the open-source models was most downloaded on the Apple App Store in January, displacing ChatGPT. 

Investors are hoping that the latest wave of nationwide strikes organized by the new presidential administration is likely to have less impact on the labor market. 

Despite the widely publicized and repeated claims by the Trump administration of more than 12 million illegal immigrants, federal government agencies managed to arrest less than 1,000 illegal immigrants in multiple raids over the last three days. 

Moreover, in the first week of the new presidential administration, at least 12,000 illegal immigrants have crossed the southern border, according to several independent analysts tracking migrant flows.

Former President Biden's administration deported more than 4 million illegal immigrants, sharply higher than the 1.6 million deported under the first presidential administration of Donald Trump. 

 

Durable Goods Orders Extended Decline In December 

On the economic front, new orders for durable goods declined in four of the last five months, the U.S. Census Bureau reported Tuesday. 

Durable goods orders decreased 2.2% from the previous month to $276.1 billion, and this followed a 2% decline in November. 

On an annual basis and not adjusted for seasonal factors, durable goods orders dropped nearly 4% to $288.6 billion in December from $299.9 billion a year ago. 

Non-defense capital goods orders declined to $95 billion from $115.2 billion, and orders excluding aircraft orders, which are considered a proxy for business spending, rose to $78.4 billion from $76.2 billion a year ago.

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.8% to 6,060.54, the Nasdaq Composite edged up 1.8% to 19,686.22, and the Russell 2000 index was down 0.2% to 2,279.74.

The yield on 2-year Treasury notes edged higher to 4.22%, 10-year Treasury notes climbed to 4.56%, and 30-year Treasury bonds moved up to 4.80%.

WTI crude oil increased $1.05 to $74.21 a barrel, and natural gas prices edged lower by $0.16 to $3.54 a thermal unit.

Gold rose by $8.28 to 2,749.80 an ounce, and silver edged down by $0.03 to $30.14.

The dollar index, which weighs the US currency against a basket of foreign currencies, gained 0.57 to 107.91 and traded at a two-year high.

 

U.S. Stock Movers 

Nvidia rebounded 3.2% to $122.38, Broadcom jumped 3.2% to $208.50, Meta Platforms advanced 1% to $665.63, and Alphabet Inc. gained 0.7% to $193.08. 

Boeing Company declined 0.3% to $175.35 after the aviation company reported higher-than-expected losses and weaker-than-expected revenue in the fourth quarter. 

 

European Markets Rebounded, Spain's Jobless Rate Dropped to New Low Since 2008 

European markets advanced in Tuesday's trading, and investors awaited rate decisions from major central banks and updates on inflation and growth outlooks.

Benchmark indexes in Frankfurt, Paris, Milan, and London advanced, and investors looked forward to comments from ECB president Christine Lagarde after the two-day policy meeting ending Thursday.

Investors are also looking forward to signals for additional rate cuts and updates on inflation and economic growth amid persistent weakness in the broader economy in the region and a lack of improvement in consumer sentiment.

Germany, France, and Italy are struggling to increase their global exports amid rising competition from Asian companies and slowing economic growth in China and Japan.

Moreover, chaotic U.S. presidential administration and U.S. trade policy uncertainties are also adding to market anxieties in European trading. 

Separately, Spain's economy ministry said it will raise GDP growth estimates for the current year above the target of 2.4%. 

Spain's jobless rate eased to 10.6% in the fourth quarter of 2024, down from 11.2% in the previous quarter, the National Statistics Institute reported Tuesday. 

The jobless rate dropped to the lowest level since the second quarter of 2008, after the number of unemployed people declined by 158,600 from the previous quarter to 2.59 million. 

Meanwhile, the number of employed increased by 34,800 to 21.86 million. 

 

Europe Indexes and Yields

The DAX index moved higher by 0.4% to 21,355.89; the CAC-40 index fell 0.2% to 7,892.81; and the FTSE 100 index advanced by 0.4% to 8,537.75. 

The yield on 10-year German bonds inched higher to 2.54%, French bonds advanced to 3.28%, the UK gilts moved up to 4.60%, and Italian bonds edged higher to 3.65%.

The euro edged higher to $1.04; the British pound was flat at $1.24; and the U.S. dollar was higher and traded at 90.64 Swiss cents.

Brent crude increased $0.39 to $77.47 a barrel, and the Dutch TTF natural gas was higher by €0.17 to €49.91 per MWh.

 

Europe Stock Movers

SAP AG gained 1% to €264 after the German software company posted strong growth in the fourth quarter ending in December.

SThree Plc dropped 5% to 270.84 pence after the London-based staffing company posted lower pre-tax earnings in the fiscal year ending in November. 

Sartorius AG surged 10.8% to €231.40 after the life sciences company closed fiscal 2024 with a positive fourth quarter ending in December.

Preliminary full-year sales revenue increased 0.1% to €3.38 billion, at a profit margin of 28%.

The biotech company remains cautiously positive for its 2025 outlook, with growth expected in both divisions.

Freenet AG increased 1.1% to €29.34 after the German media company appointed Robin John Andes Harries as its new chief executive.

Netcompany AS plunged 6.5% to €41.50 after the technology company reported lower-than-expected revenue and operating earnings in the fourth quarter. 

Free cash flow was significantly higher because of improvements in working capital, despite the decline in revenue. 

The company's revenue growth guidance of a 5% increase fell short of market expectations of a 10% increase.

 

India Indexes Shake-off Rising Geopolitical Tensions, Union Budget In Focus

Stock market indexes in Mumbai rebounded in early trading on Tuesday, and investors looked ahead to the release of the Union Budget. 

The Sensex and Nifty indexes rebounded more than 0.2% after struggling to advance for more than three weeks amid weak corporate earnings results, persistent outflow of foreign funds, and rising geopolitical tensions. 

The Union Budget is likely to show higher spending on road and rail infrastructure development, electric power infrastructure, and greater emphasis on collecting individual taxes. 

The finance ministry is also expected to provide additional incentives to accelerate renewable power infrastructure investment and the production of equipment and systems for defense and security activities. 

Foreign investors continue to trim their holdings in emerging markets, including in India, following the rise of bond yields in the U.S. and the UK to 5%. 

Market sentiment has been cautious amid geopolitical uncertainties and the possible application of additional tariffs on manufactured goods shipped from China and Asia as early as this week. 

Chaotic and combative, the U.S. presidential administration is likely to face resistance in the months ahead, as the world's largest economy relies on other nations for consumer electronics, basic household items, transportation equipment, advanced electrical and electronic supplies, and key food products.  

In trading across Asia, stock markets in mainland China are closed for a week to celebrate the Lunar New Year, and the Nikkei 225 Stock Average plunged 1.4% to 39,016.87, tracking losses in tech stocks in overnight trading in New York.  

 

Stock Indexes and Bond Yields

The Sensex index increased by 0.4% to 75,667.28, and the Nifty index increased by 0.2% to 22,881.80.

On the Mumbai stock exchange, 14 stocks traded at their 52-week highs, and 270 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds inched lower to 6.7%, and the Indian rupee hovered near a record increase and traded at 86.45 against the U.S. dollar.

The gold price increased by 0.2% to ₹79,729 per ten grams, and silver advanced by 0.02% to ₹90,244 per kilo.

Crude oil rose by 0.8% to ₹6,349 per barrel, and natural gas increased by 0.4% to ₹280.7 per thermal unit.

 

Stock Movers

Coal India declined 1.7% to ₹369.35 after the mining company reported a 17% decline in earnings in the December quarter following lower coal prices. 

Union Bank of India rose 3.4% to ₹109.25 after the financial services company reported a 38% jump in consolidated profit from a year ago. 

Canara Bank dropped 0.9% to ₹91.45 after the financial service company reported a 12% increase in profit, driven in part by a boost in non-interest income. 

Federal Bank dropped 5.4% to ₹180.80 after the financial service company reported a marginal decline in the December quarter profit. 

Emami Limited increased 1.3% to ₹541.80 after the personal care and healthcare company reported a 7% increase in the fiscal third quarter ending in December. 

Indraprastha Gas Limited dropped 5% to ₹370.80 after the natural gas distribution company reported December quarter earnings that fell short of market expectations.