© Reuters. Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 7, 2024. REUTERS/Brendan McDermid/File Photo
By Bansari Mayur Kamdar and Shashwat Chauhan
(Reuters) – The and the Nasdaq fell on Tuesday with most megacap and chip stocks weakening, while sentiment remained fragile ahead of the Federal Reserve’s March policy meeting.
Investor darling Nvidia (NASDAQ:) fell 3.0% after the company unveiled the Blackwell B200, an AI chip it says is up to 30 times faster than its previous chip. Some investors suggested the news was priced into the high-flying stock.
Fellow chipmakers such as AMD (NASDAQ:), Marvell (NASDAQ:) Technology and Intel (NASDAQ:) shed between 1.9% and 4.9%, while the Philadelphia Semiconductor index dipped 2.3%.
AI server maker Super Micro Computer (NASDAQ:) dropped nearly 11.5% after announcing that it will sell 2 million shares that could fetch about $2 billion.
At 9:52 a.m. ET, the was up 42.20 points, or 0.11%, at 38,832.63, the S&P 500 was down 11.67 points, or 0.23%, at 5,137.75, and the was down 114.69 points, or 0.71%, at 15,988.76.
Five of the 11 major S&P 500 sectors were trading were lower, with information technology down 0.8%.
Most megacap stocks fell in early trading, with Tesla (NASDAQ:) losing 3.2% and Meta Platforms (NASDAQ:) retreating 2.3%.
All three major stock indexes finished higher in the previous session, with the Nasdaq bouncing back from two successive small weekly losses as growth stocks such as Alphabet (NASDAQ:) and Tesla boosted the tech-heavy index.
Focus will remain on U.S. central bankers who are expected to hold rates steady at the end of their two-day meeting on Wednesday.
But, investors are concerned that their new economic projections may be a wild card, potentially signaling fewer interest rate cuts and a later start to the policy easing cycle.
“It’s all about the dot plot,” said Mike Reynolds, vice president of investment strategy at Glenmede.
“There’s almost no expectation that they’re taking rates off the highs but the Fed is going to be taking a hard look at inflation, which for the first two months of the year has been pretty sticky.”
Robust inflation data has pushed traders to pull back bets of the first rate cut coming in June to 55.2% from 71% at the start of last week, according to the CME FedWatch Tool.
Among other movers, crypto-exchange operator Coinbase (NASDAQ:) Global and miners Riot Platforms (NASDAQ:) and Marathon Digital (NASDAQ:) Holdings shed between 6.4% and 7.7%, tracking the sharp slide in bitcoin.
Spire (NYSE:) Global jumped 56.3% after the company announced a collaboration with Nvidia for AI-driven weather prediction.
Fusion Pharmaceuticals jumped 97.4% after AstraZeneca (NASDAQ:) said it will buy the Canadian drug developer for $2 billion in cash.
Advancing issues outnumbered decliners by a 1.28-to-1 ratio on the NYSE and declining issues outnumbered advancers for a 1.04-to-1 ratio on the Nasdaq.
The S&P index recorded 29 new 52-week highs and one new low, while the Nasdaq recorded 24 new highs and 57 new lows.
