Stock market today: Stocks slide, Dow suffers worst day in a year as Nvidia fails to spur market rally

Much of the last week was spent talking about Nvidia's highly anticipated earnings release. The company did its part for market bulls, once again racing past Wall Street's high expectations.

But the rest of the market didn't come along for the ride.

All said, Nvidia's (NVDA) stock rose nearly 10% on Thursday while all three major indexes closed in the red. Even the tech-heavy Nasdaq Composite, which Nvidia usually influences rather heavily, fell nearly 0.4%.

Stocks headed lower on the day after a hotter-than-expected reading on economic activity sent bond yields higher and fueled concerns that the Fed may not cut interest rates as soon as many hoped. This dominated the market action with interest rate-sensitive sectors like Real Estate (XLRE), Utilities (XLU), and Financials (XLF) among the worst performers in the S&P 500.

Despite the pre-earnings hype around Nvidia, Thursday's market action showed that a market at record highs remains fickle when yields rise and fears over a too-hot economy arise.

Another hot reading on the US economy sent bond yields higher and worried investors about when the Federal Reserve would cut interest rates on Tuesday.

S&P Global Market Intelligence chief business economist Chris Williamson told Yahoo Finance that the highest reading of US composite PMI in 25 months is clearly "one that is going to worry the central bank."

And it worried investors in a down day for markets on Thursday.

But stock strategists are often quick to point out the upshot of this data: It means the economy is growing. And, Fed rate debate aside, that's a good thing.

HSBC chief multi-asset strategist Max Kettner said that as long as the debate doesn't shift to how much more the Fed will hike, the market can be OK. Because based on the current data, if the Fed doesn't cut this year, it's because economic growth is "so strong that inflation isn't going down."

"It's the good kind of inflation where it's growth-led," Kettner said. "As long as that continues that's still pretty good for risk assets."

Today's price action in chip stocks and copper futures provides a fascinating look at two markets that are intertwined, yet remain distinct.

The PHLX semiconductor index (^SOX) opened at an all-time high today thanks to Nvidia's monster surge (to its own record high).

Meanwhile, futures contracts for copper (HG=F) — a key raw material in semiconductors — are down 6.7% over the last couple days. That's the worst two-day slump in two years.

Both markets happen to be up 24% this year. But the SOX hadn't notched a record in over two months. Meanwhile, copper was minting new highs as recently as last week.

A note of concern — since its record open this morning, the SOX has been trending down all day. It's creating an ugly chart with a big, red candle that mirrors similar price action in the major indes.

Investors are slowly losing faith the Federal Reserve will cut interest rates in September.

As of Thursday afternoon, markets were pricing in a 51% chance the Fed cuts at the September meeting, down from a 68% chance last week, and 73% a month ago, per the CME FedWatch Tool.

The move comes as the latest reading on business activity showed a surprise increase in the month of May, fueling fears that a hot economy could prevent inflation from falling further. This was coupled with comments from Goldman Sachs CEO David Solomon that he doesn't expect the Fed to cut at all this year.

Also on Wednesday, minutes from the Fed's May meeting revealed various participants mentioned a "willingness" to tighten policy "should risks to inflation materialize in a way that such an action became appropriate."

Stock losses accelerated in afternoon trade on Thursday.

The tech-heavy Nasdaq Composite (^IXIC) fell about 0.4% while the S&P 500 (^GSPC) dropped nearly 0.8%. The Dow Jones Industrial Average (^DJI) dipped more than 1.7%, weighed by a drop in Boeing (BA) shares.

Interest rate-sensitive areas of the market continued to feel the most pain, with the small-cap Russell 2000 Index (^RUT) falling by almost 1.8%.

After a day that started with stocks eyeing fresh records following a blowout earnings report from Nvidia (NVDA), the trading action has turned.

US economic output came in hotter than expected in May, weighing on investors' hopes for interest rate cuts and sending interest rate-sensitive sectors like Real Estate (XLRE), Financials (XLF), and Utilities (XLU) down more than 1% on the day.

Technology (XLK) had held up for a large portion of the day, but it, too, has now given up its gains for the day.

Nvidia (NVDA)

Shares of the chip giant were in the Yahoo Finance No. 1 trending tickers slot on Thursday after a blowout quarter. Nvidia not only beat on the top and bottom line, but the chipmaker also raised its guidance, quelling investor concerns over a slowdown in demand as the company transitions to its next-generation AI chips.

Nvidia soared 10% to a new all-time high.

Boeing (BA)

Boeing shares dropped 5% after the aircraft maker's CFO said free cash flow would be impacted by a lack of recent plane deliveries to China.

The delivery delay is due to a request from the country's regulators for more certification documentation related to batteries inside cockpit voice recorders.

Boeing shares weighted on the Dow Jones Industrial Average (^DJI) on Thursday, which fell as much as 0.6%.

Snowflake (SNOW)

Shares of Snowflake dropped 2% despite the cloud computing company's latest quarter revenue beat. Snowflake posted sales of $828.71 million against an expected $786.26 million. The company also boosted its full-year sales outlook from $3.25 billion to $3.3 billion.

Boeing (BA) shares dropped to session lows over a delay in plane deliveries to China after the country's regulators requested more documentation related to batteries inside cockpit voice recorders.

The lack of recent deliveries is expected to impact Boeing's free cash flow, said Boeing's CFO Brian West at an investor conference on Thursday.

Boeing shares fell as much as 6% during the session.

The aircraft manufacturer has faced a mountain of challenges and increased scrutiny after an exterior door plug fell off an Alaska Airlines (ALK) plane mid-flight.

Year to date Boeing stock is down more than 30%.

High mortgage rates are taking their toll on the new home market.

Sales of new single-family homes fell to a seasonally adjusted rate of 634,000 units last month from March’s revised seasonally adjusted annual rate of 665,000, according to Census Bureau data released Thursday. That’s lower than Bloomberg consensus expectations of 678,000 units in April.

The slide in sales activity reflects how the spike in mortgage rates in spring caused some buyers to hold off and wait for a lower rate. Mortgage rates climbed through April, hovering well above 7%, according to Freddie Mac.

“We think this will partly reverse in May as mortgage rates have since fallen back to 7%, therefore we don’t feel the need to abandon our above-consensus new home sales forecast just yet,” Thomas Ryan, North America economist from Capital Economics, wrote in a note after the results.

The data came after homebuilders reported feeling less confident about the housing market as higher mortgage rates dampened affordability and demand. Last week, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) posted its first monthly decline since November and officially hit negative territory.

Homebuilding stocks were red midday Thursday, with the SPDR S&P Homebuilders ETF (XHB) down 0.3%.

The Justice Department is widening its antitrust crackdown as it goes after Live Nation (LYV), filing a lawsuit Thursday that seeks a breakup of the entertainment giant.

US prosecutors and a group of states argue that Live Nation used its Ticketmaster ticketing monopoly to suppress competition. The lawsuit follows a two-year investigation into the company.

The suit comes 14 years after the DOJ approved a merger between Live Nation and Ticketmaster. Ticketmaster is a dominant provider of ticket sales across the US that processes more than 80% of sales, while Live Nation owns and operates hundreds of high-profile venues and is a giant concert promoter.

The combined company has long faced criticism of what lawmakers and regulators consider to be exorbitant fees, problematic customer service, and unfair practices.

Live Nation’s stock was down roughly 5% as the suit was filed in the Southern District of New York.

"Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators," Attorney General Merrick Garland said in a statement, cited by multiple media outlets.

"The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services," Garland added. "It is time to break up Live Nation."

Live Nation immediately refuted the lawsuit, calling the allegations "baseless."

"The DOJ’s complaint attempts to portray Live Nation and Ticketmaster as the cause of fan frustration with the live entertainment industry," said Dan Wall, Live Nation executive vice president for corporate and regulatory affairs.

"It blames concert promoters and ticketing companies — neither of which control ticket prices —for high ticket prices. It ignores everything that is actually responsible for higher ticket prices, from increasing production costs to artist popularity, to 24/7 online ticket scalping that reveals the public’s willingness to pay far more than primary tickets cost."

Read more here.

Live Nation Entertainment stock (LYV) fell as much as 5% after the Justice Department and 30 states along with the District of Columbia filed a suit to break up the concert promoter and Ticketmaster.

The lawsuit alleges Live Nation and TicketMaster, which it purchased in 2010, illegally drove up ticket prices.

The S&P 500 (^GSPC) pared earlier market gains after a reading of the S&P Global purchasing managers index (PMI) showed an acceleration of business action at the beginning of May.

Yields on the 10-year Treasury (^TNX) rose about 4 basis points to 4.47%, putting pressure on stocks.

The S&P 500 and Nasdaq Composite (^IXIC) both rose to touch fresh intraday highs earlier in the session on the heels of Nvidia's (NVDA) blowout quarter.

The Dow Jones Industrial Average (^DJI) moved to session lows, down 0.5%.

The Nasdaq and S&P 500 surged to hit new intraday records Thursday following Nvidia's (NVDA) blowout quarter. Shares of the AI chipmaker soared more than 7% at the open, trading above $1,000 each for the first time.

The Nasdaq Composite (^IXIC) jumped about 1%, while the S&P 500 (^GSPC) rose 0.6%. The Dow Jones Industrial Average (^DJI) rose slightly.

Technology and Communications Services stocks led the gains, lifted by Nvidia's first quarter results. The AI chip giant blew past Wall Street expectations. The company also raised its guidance, quelling concerns that demand would slow as it transitions to its next-generation chips this year.

In an exclusive interview with Yahoo Finance, Nvidia CEO Jensen Huang said, "People want to deploy these data centers right now. They want to put our [graphics processing units] to work right now and start making money and start saving money. And so that demand is just so strong."

Nvidia (NVDA) shares are up about 7% premarket after another big quarter AND another big earnings call.

But the insight into the most important company in the world didn't stop there.

Yahoo Finance's Julie Hyman and Dan Howley sat down exclusively with Nvidia founder and CEO Jensen Huang following the earnings call.

Huang moved quickly to quiet any concern about a demand slowdown for the powerful chips that are leading the generative AI movement:

"People want to deploy these data centers right now. They want to put our [graphics processing units] to work right now and start making money and start saving money. And so that demand is just so strong," Huang said.

The pushback on any demand slowdown by Huang was also spotted by Wall Street, which is out this morning leaving Buy ratings intact and pushing estimates higher.

Yahoo Finance's full chat with Huang below. More context from Julie and Dan here.