Markets droop as AI credit fears grow and jobs report looms
The S&P 500, Nasdaq 100, and Russell 2000 all slumped on Monday.
The markets had a case of the Mondays and drooped as the last full week of trading for 2025 kicked off. All three major indexes finished down for the day.
Investors went risk-off ahead of tomorrow’s release of delayed jobs and payroll data and Thursday’s CPI report, all of which will influence the odds of how many rate cuts the Federal Reserve may enact in the new year.
A growing concern around AI credit risk also weighed on stocks, with Broadcom and Oracle both continuing their declines from last week. Tech and energy S&P sector ETFs saw the biggest declines, while healthcare topped the leaderboard.
Stocks that moved higher:
Tesla rallied following news that its Austin Robotaxi fleet was now testing driverless cars without safety monitors — which seemed to investors like concrete momentum toward Tesla’s autonomous future.
GameStop rallied on bullish options activity, “The Big Short” investor Michael Burry’s promised post on the meme stock, and its poaching of the artist formerly known as “Best Buy Rilie.”
GE Vernova ticked up as Evercore ISI initiated coverage of the company with an “outperform” rating.
Nvidia rose following its launch of an updated edition of its family of open models, the Nemotron 3.
Stocks that moved lower:
While Nvidia itself gained on the day, three companies — Applied Digital, CoreWeave, and Nebius — that the chip designer holds major positions in all fell as worries of AI credit risk spreads.
And what’s good for Tesla is often bad for its competitors — Lyft and Uber both suffered following the report that it began testing its driverless cars without safety monitors.
Crypto had a rough session, and bitcoin’s slide dragged down a host of crypto-sensitive stocks, including Cipher Digital, CleanSpark, Hut 8, TeraWulf, and IREN.
ServiceNow tumbled on a report that it’s nearing a deal to buy cybersecurity startup Armis for up to $7 billion.
Roomba maker iRobot plunged after it filed for Chapter 11 bankruptcy over the weekend.
