Stocks Slip as Nvidia, CoreWeave Revive AI Jitters: Markets Wrap
(Bloomberg) — US stock futures retreated as traders backed away from high-priced technology companies after SoftBank Group Corp. sold its entire Nvidia Corp. stake and CoreWeave Inc. warned revenues will be lower than expected.
Futures for the S&P 500 were down 0.3% and contracts on the Nasdaq 100 fell 0.5% after the tech index posted the biggest gain in almost six months on Monday. Nvidia slipped, leading Magnificent Seven stocks lower, and CoreWeave sank about 10% in premarket trading.
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The dollar was little changed, and cash trading in Treasuries was closed for the Veterans Day holiday. Stocks in Europe gained. Asia trading was mixed.
The underwhelming outlook from CoreWeave, which rents out access to powerful artificial intelligence chips, gives investors another reason to worry about the strength of the tech industry at a time when there’s widespread anxiety over valuations.
“The valuations don’t look crazy but they do if there’s nervousness on the growth story,” Helen Jewell, chief investment officer of EMEA fundamental equities at BlackRock Inc., told Bloomberg TV. “That’s why I think the AI story, of which we do remain bullish, we do think while there is a lot further to go, it is likely to be a volatile ride.”
Meanwhile, Nvidia fell 1.7% after SoftBank sold its stake to pocket $5.83 billion. “I can’t say if we’re in an AI bubble or not,” Chief Financial Officer Yoshimitsu Goto said during an earnings conference. SoftBank sold Nvidia “so that the capital can be utilized for our financing,” he added, without elaborating.
With the US government shutdown expected to end on Wednesday, investors hope that fresh jobs and inflation reports will spur more interest-rate cuts from the Federal Reserve.
Wall Street may see more gains, with S&P 500 posting an average 2.3% rise in the month following the resolution of prior shutdowns, according to data crunched by CFRA’s chief market strategist Sam Stovall.
“It will be about data, earnings and the Fed, and investors will remain on the defensive until there is clarity on all factors,” said Geoff Yu, senior macro strategist at BNY. “The bar is high for further gains in risk sentiment.”
In other markets, the pound weakened after data showed unemployment in the UK rose more than expected, prompting traders to add to bets on a Bank of England interest-rate cut next month.
Corporate News:
Gemini Space Station shares drop 8.8%. The crypto exchange founded by Tyler and Cameron Winklevoss reported a steeper loss than analysts anticipated in its first earnings release since going public. Rocket Lab shares rise 13%. The space transportation company reported revenue that beat the average analyst estimate. Sony Group Corp. jumped more than 5% after raising its profit outlook. Xpeng Inc. shares surged to their highest level in eight months, amid growing optimism over the Chinese electric carmaker’s progress in technologies including humanoid robots. Elliott Investment Management has been building a significant stake in Toyota Industries Corp. and has told the Toyota group company that its proposed privatization price is too low. Meta’s chief artificial intelligence scientist Yann LeCun intends to leave the company to launch his own startup, the FT reports, citing people familiar with the matter. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.3% as of 8:25 a.m. New York time Nasdaq 100 futures fell 0.5% Futures on the Dow Jones Industrial Average were little changed The Stoxx Europe 600 rose 0.7% The MSCI World Index rose 0.2% Currencies
The Bloomberg Dollar Spot Index was little changed The euro rose 0.3% to $1.1593 The British pound was little changed at $1.3169 The Japanese yen rose 0.2% to 153.80 per dollar Cryptocurrencies
Bitcoin fell 1.2% to $104,343.01 Ether rose 0.4% to $3,555.63 Bonds
Germany’s 10-year yield declined one basis point to 2.66% Britain’s 10-year yield declined eight basis points to 4.38% Commodities
West Texas Intermediate crude rose 0.7% to $60.55 a barrel Spot gold rose 0.7% to $4,142.90 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Andre Janse van Vuuren and Geoffrey Morgan.
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